The UK-US trade agreement, effective from June 30, has significantly reduced tariffs on UK car exports to the US from 27.5% to 10%, which has helped boost exports and improve market access.

Following the deal, UK car exports to the US increased by 6.8%, and overall exports to key markets like Turkey and Japan also saw notable rises, although exports to the EU and China declined.

The US remains the largest single market for British-built cars, emphasizing the importance of this trade agreement for the UK automotive sector.

UK car manufacturing increased for the second month in a row in July, with production rising by 5.6% to 69,127 units, according to the Society of Motor Manufacturers and Traders.

Major UK automakers like Jaguar Land Rover faced challenges from tariffs, with JLR temporarily pausing US shipments in April before resuming them in May.

Tariffs imposed by the US previously caused a 55.4% decline in UK vehicle exports to the US in May, but the recent trade deal appears to have positively impacted export numbers.

Despite ongoing industry turbulence, including weak consumer confidence and volatile trade flows, the sector showed resilience with a 5.6% increase in UK car production in July, marking the second consecutive monthly rise.

Industry chief Mike Hawes highlighted challenges such as high investments in new technologies and subdued consumer sentiment, but welcomed the recent growth in car output as a positive sign.

Overall UK vehicle production declined by 10.8% to 72,006 units in July, with commercial vehicle output dropping sharply by 81.1%, mainly due to restructuring efforts.

In the first seven months of 2025, total vehicle production fell by 11.7% compared to the previous year, though forecasts suggest a 6.4% rebound in 2026.

Most UK car exports are destined for Europe, but luxury brands such as Bentley and Rolls-Royce, owned by German companies, primarily target the US market.

The trade agreement's effects are evident in the increased export figures, signaling a positive development for UK automotive exports to the US.