UK-US Trade Deal: A Relief, but not a Revolution

Lale Akoner, global market analyst at eToro says: “Yesterday’s UK-US trade deal may not dismantle Trump’s 10% baseline tariff, but it delivers strategic wins for key UK exporters, especially in autos, aerospace, and steel. Jaguar Land Rover, Bentley, and McLaren are breathing easier: UK car exports to the US will now face just a 10% levy (down from a potential 27.5%) on the first 100,000 vehicles, effectively covering 99% of current trade volumes. Jaguar Land Rover hailed the deal as “significant progress,” with implications for long-term investment. Expect stability in JLR’s US-facing sales and bullish sentiment for auto-adjacent suppliers.

“Rolls-Royce gained tariff-free access for its jet engines, sending shares up 3.6%. That should bolster future transatlantic orders and reduce input cost uncertainty. Meanwhile, Boeing rose 2.8% on reports of a $10bn deal with IAG (British Airways’ parent), a diplomatic win leveraged through UK aerospace cooperation. Steel producers like Tata Steel UK also benefit: £370mn of annual steel exports to the US are now on firmer footing.

“Yet not all are celebrating. UK food and drink exporters still face 10% tariffs, and domestic farmers fear a flood of subsidized US ethanol and beef. The macroeconomic uplift will be modest, but sector-specific clarity matters- particularly in capital-intensive industries.

“Critically, this agreement sets a precedent. Trump rewarded a cooperative partner, suggesting future sectoral deals – potentially, with Europe, Japan, and Korea – may hinge on similar concessions. Investors should watch for opportunities in export-sensitive UK equities and US multinationals benefitting from reciprocal access. This is tariff diplomacy by quota and the model may stick.”