UK Car Sales to US Rebound After Tariff Deal

Sales of British-made cars to the United States rose by 6.8% in July, following a new UK-US tariff agreement that eased trade tensions and revived exports.

The increase marks a reversal after three consecutive months of declining sales, according to the Society of Motor Manufacturers and Traders (SMMT).

From Trade Tensions to Recovery

In April, US President Donald Trump dramatically raised import taxes on UK-built cars from 2.5% to 27.5%, shaking the UK automotive industry.

However, in May, the UK and US reached a deal to cut tariffs to 10%, effective from the end of June. The new rate applies to the first 100,000 cars exported annually—roughly the same volume the UK shipped to the US last year. Any cars beyond that quota will still face the 27.5% rate.

The SMMT said the July figures “illustrate the impact of this deal”, while warning that the UK car manufacturing sector continues to face broader challenges.

“The US remains the largest single national market for British-built cars, underscoring the importance of the UK-US trade deal,” said the SMMT.

Key Market for Premium Brands

The US accounted for 18.1% of all UK car exports in July, while the European Union remained the biggest destination, making up 45.6% of exports.

Colleen McHugh, chief investment officer at Wealthify, highlighted the US as a “key market for premium brands” like Jaguar Land Rover (JLR).

JLR paused US shipments in April after the sudden tariff hike but resumed deliveries in May following the tariff agreement.

Industry Still Under Pressure

Despite July’s positive numbers, the wider UK automotive sector is still struggling. While car manufacturing rose for the second month in a row, total vehicle production in 2025 remains down by 11.7% year-to-date.

Last month, UK car production hit its lowest level since 1953.

The downturn is being blamed on:

• Rising labour costs
• Global competition
• Brexit-related trade friction

“It remains a turbulent time for automotive manufacturing, with consumer confidence weak, trade flows volatile, and massive investment in new technologies underway,” said Mike Hawes, SMMT chief executive.

“Given this backdrop, another month of growing car output is good news.”