Reeves Hints at Tariff Cuts on US Cars in Potential UK-US Trade Deal, Posing Threat to Domestic Industry

Chancellor Rachel Reeves has signalled that the UK may be willing to reduce tariffs on American car imports as part of a broader trade deal with the United States. However, she firmly rejected any suggestions that Britain would relax its food or vehicle safety standards in exchange.

Speaking at a conference in Washington, Reeves stated that she was keen to reduce both tariff and non-tariff barriers between the two countries, describing the current trading arrangements as restrictive for both sides.

“I would like to see those tariffs and non-tariff barriers reduced,” she said, while stopping short of confirming any firm figures or timelines. When pressed, Reeves reiterated that any agreement would prioritise the national interest and would not be rushed.

The move comes amid growing concern from British manufacturers, particularly in the automotive sector, over the economic damage caused by tariffs imposed by the US administration under President Donald Trump. Currently, the UK imposes a 10% tariff on US cars, while American tariffs on UK car exports were hiked to 25% under Trump’s trade policy.

Industry leaders, including Mike Hawes, Chief Executive of the Society of Motor Manufacturers and Traders, have warned that the US tariffs are having a “severe and immediate” impact on Britain’s high-end carmakers such as Aston Martin, Bentley, and Jaguar Land Rover.

Reeves suggested a potential cut in UK tariffs to 2.5% on US car imports could be feasible—provided it is reciprocated by the US slashing its own import levies. However, she ruled out making concessions in areas such as food safety or digital regulations, insisting: “Decisions on standards are for the UK government to make, and we will continue to do that.”

Prime Minister Sir Keir Starmer also weighed in this week, vowing that the UK would uphold “the highest animal welfare standards” and that chlorine-washed chicken and hormone-treated beef would remain banned.

Trade analysts say the proposal to reduce car tariffs could be achieved within World Trade Organization rules, particularly if the UK and US negotiate a free trade agreement. Despite only $1.4bn worth of US cars being exported to the UK annually, any reduction in tariffs would be seen as a symbolic and strategic win.

Reeves confirmed that while the government is under “no illusion” about the complexity of such negotiations, she is optimistic that an agreement can be struck—without compromising the UK’s regulatory standards.

The talks come at a critical moment as UK exporters continue to push for relief from Trump-era trade barriers, which have disrupted long-standing supply chains and dented confidence in international markets.