UK car sales to US rise following tariff deal

Sales of British-made cars to the US rose in July following the introduction of the UK-US tariff deal.

The 6.8% rise follows three months in a row of falling sales, according to data from the Society of Motor Manufacturers and Traders (SMMT).

In April, US President Donald Trump hiked import taxes on UK cars from 2.5% to 27.5%, which sent shockwaves through the industry, but in May both sides agreed this would be lowered to 10% from the end of June.

The SMMT said July’s figures “illustrate the impact of this deal”, though it added that UK car manufacturing was generally struggling.

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

The tariff cut from 27.5% to 10% only applies to the first 100,000 cars sent across the Atlantic, which is about the number of cars the UK exported to the US last year.

Any additional car imports above that number will be taxed at 27.5%, according to the agreement.

The US represented 18.1% of all UK car exports for July, while the European Union is a much bigger market for car makers, totalling 45.6% of exports.

Colleen McHugh, chief investment officer at investment firm Wealthify, said the US was “an important market for British-built cars”.

“In particular, it is a key market for premium brands like Jaguar Land Rover (JLR).”

JLR paused shipments to the US in April after the initial higher tariffs were announced, before resuming them a month later.

Overall, UK car manufacturing rose rose for the second consecutive month in July, due to rises in both domestic sales and exports.

However, overall vehicle output for the year to date is down 11.7%, a figure which includes both cars and commercial vehicles. Last month, car making in the UK fell to its lowest level since 1953.

Experts say the slump has been caused by a combination of higher UK labour costs, increased competition from overseas, and Brexit.

Commenting on July’s numbers, 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.”