Chancellor Rachel Reeves has signalled that the UK is prepared to slash tariffs on US-made vehicles in a strategic bid to revive trade talks with the Trump administration.
In remarks delivered during her visit to Washington, Reeves said she wants to reduce both tariff and non-tariff barriers between the UK and US, hinting at a willingness to lower the 10% duty on US-built cars to just 2.5%.
This comes as part of broader negotiations aimed at lifting the 25% US tariffs currently levied on UK car, steel, and aluminium exports.
“Our objective is to build a deeper trading relationship with the US,” Reeves told the BBC. “We are willing to reduce UK trade barriers where it supports national interests – including for the auto sector.”
The potential removal of these tariffs could create a more favourable operating environment, especially as companies like Ford, Stellantis, and BMW reassess their production footprints in response.
A document circulated earlier this week among US business groups proposed cutting UK tariffs on US vehicles to 2.5% as part of the talks.
Reeves has expressed openness to that arrangement, provided it leads to broader reciprocal benefits for UK industry.
While Reeves said the UK was not “rushing into a deal,” she remained optimistic that a framework could be agreed that supports jobs, investment, and future EV competitiveness.
The news comes as a recent JATO Dynamics study revealed that the UK was the main driver of European market growth in March with volumes up by 13%.