Tariff Relief Within Seven Days Under U.S.-U.K. Deal Once Federal Notice Published

Trade Update • June 17, 2025

nder a new trade arrangement announced by President Trump and U.K. Prime Minister Keir Starmer, the United States will significantly reduce Section 232 tariffs on British automobiles, auto parts, and certain aerospace products. These measures form part of the Executive Order “General Terms for the United States-United Kingdom Economic Prosperity Deal”, set to begin taking effect seven days after publication in the Federal Register.

Lower Tariffs for Cars and Parts

The deal introduces a new in-quota Section 232 tariff rate of 7.5% on British-built automobiles, which, when combined with the existing 2.5% most-favored-nation (MFN) duty, results in a total 10% tariff for up to 100,000 vehicles annually. This tariff-rate quota (TRQ) will take effect seven days after the executive order’s publication in the Federal Register. Vehicles imported above this threshold will continue to face the full 25% Section 232 tariff established under Proclamation 10908.

Automotive parts of U.K. origin will also benefit from tariff relief. The executive order caps the total tariff on qualifying U.K.-origin auto parts at 10%, provided the parts are used in vehicles that are themselves products of the U.K. This includes the MFN tariff and will eliminate the additional 25% Section 232 duty for eligible goods. However, this relief will only take effect once a second Federal Register notice is published modifying the Harmonized Tariff Schedule (HTS), which the Commerce Department must issue within seven days of the initial notice.

Key Dates:

• June 16, 2025: Executive order issued.

• +7 days (once Federal Register Notice is published): TRQ for British autos takes effect.

• +7 days (one second Federal Register Notice published): Tariff changes for U.K. auto parts and aerospace products take effect upon publication of a modifying HTS notice.

This targeted tariff relief reflects a broader shift toward strategic economic partnerships designed to reinforce national security while improving market access for U.S. industries.

Aerospace Products Exempt from Derivative Tariffs

In the aerospace sector, the agreement eliminates all reciprocal and derivative tariffs imposed under Section 232 on civil aircraft, engines, helicopters, and related parts from the United Kingdom. These tariffs were originally authorized by Executive Order 14257 and Proclamations 9704 and 9705 but will be suspended as soon as the HTS is updated by the Commerce Department’s required second Federal Register notice.

This move is intended to strengthen bilateral aerospace supply chains and expand tariff-free trade in products covered by the WTO Agreement on Trade in Civil Aircraft.

No Immediate Change to U.K. Steel and Aluminum Tariffs

While the executive order does not alter the existing Section 232 tariffs on U.K.-origin steel and aluminum (or their derivatives), it authorizes the Commerce Secretary to design a tariff-rate quota system in the future. This will depend on how the U.K. implements its obligations under the deal—particularly those related to supply chain security and ownership requirements in the steel and aluminum sectors. Any changes would require further evaluation and coordination with the Office of the United States Trade Representative (USTR).

Broader Deal Terms and Next Steps

The U.S.-U.K. Economic Prosperity Deal, announced May 8, 2025, represents a wide-ranging effort to expand bilateral trade and improve national security cooperation. In addition to automotive and aerospace measures, the agreement outlines goals to improve U.K. market access for American beef, ethanol, and other agricultural products, and to reduce non-tariff barriers that have impacted U.S. exporters.

The agreement also sets the stage for future preferential treatment of British pharmaceuticals, contingent upon the results of an ongoing Section 232 investigation and U.K. compliance with U.S. supply chain security standards.

The U.S. Department of Commerce, in consultation with the International Trade Commission and Customs and Border Protection, is responsible for implementing the HTS modifications and issuing guidance necessary to carry out the new tariff arrangements. Businesses are advised to monitor the upcoming Federal Register notices to understand when the new tariff provisions officially take effect.

How GHY Can Help

GHY specializes in helping businesses navigate and reduce the impacts of tariffs through strategic solutions tailored to their needs. Our experts can audit your supply chain to identify inefficiencies, uncover cost-saving opportunities, and ensure compliance with evolving trade regulations. We also employ tariff engineering techniques to optimize product classification and sourcing strategies, minimizing duty exposure and maximizing profitability.

By partnering with GHY, your business gains access to the tools and expertise needed to streamline operations and stay competitive in a challenging trade environment.

Contact Us Today! Booking a Meeting, email consult@ghy.com, or call +1 (800) 667-0771.