Sales of British-made cars to the United States rose in July, supported by the new UK-US tariff deal that eased the pressure on exporters.
Rebound after months of decline
According to data from the Society of Motor Manufacturers and Traders (SMMT), exports to the US grew 6.8% in July, following three consecutive months of declines.
The rebound came after Washington and London struck an agreement in May to reduce tariffs, which had been hiked by US President Donald Trump in April from 2.5% to 27.5%. Under the new deal, the duty was cut to 10% from the end of June.
The SMMT said July’s increase “illustrates the impact of this deal,” though it stressed that UK car production overall remains under significant strain.
Tariff cap limits benefits
The tariff reduction applies only to the first 100,000 vehicles shipped annually to the US, roughly the same volume exported in 2023. Any shipments beyond that threshold will still face the 27.5% duty.
Despite the tariff cap, the US accounted for 18.1% of UK car exports in July, compared with 45.6% destined for the European Union.
Colleen McHugh, chief investment officer at Wealthify, said the US is “an important market for British-built cars,” particularly for premium brands such as Jaguar Land Rover (JLR).
JLR temporarily halted shipments to the US in April when the higher tariff took effect, resuming exports only after the May agreement.
Broader industry outlook
Overall UK car manufacturing grew for a second consecutive month in July, driven by both domestic sales and overseas demand. However, total vehicle output for the year to date remains down 11.7%, reflecting weakness in both passenger cars and commercial vehicles.
Production last month fell to its lowest July level since 1953, underscoring the depth of the industry’s challenges.
Analysts point to rising UK labour costs, intensifying global competition, and the lingering effects of Brexit as key pressures on the sector.
Mike Hawes, SMMT chief executive, said:
“It remains a turbulent time for automotive manufacturing, with consumer confidence weak, trade flows volatile and massive investment in new technologies underway both here and abroad. Given this backdrop, another month of growing car output is good news.”
