LONDON 

British car and aerospace manufacturers are set to benefit from major tariff cuts as a landmark UK-US trade deal took effect Monday, in a move expected to save businesses hundreds of millions of pounds annually and to safeguard thousands of jobs.

Under the new terms, tariffs on British car exports to the US have been cut from 27.5% to 10%, while the aerospace sector will see the removal of 10% tariffs on goods such as engines and aircraft parts.

The government hailed the agreement as a crucial step in safeguarding key industries and preserving global competitiveness.

"Our historic trade deal with the United States delivers for British businesses and protects UK jobs. From today, our world-class automotive and aerospace industries will see tariffs slashed, safeguarding key industries that are vital to our economy," Prime Minister Keir Starmer said in a statement.

"We will always act in the national interest—backing British businesses and workers, delivering on our Plan for Change," he added.

The automotive industry, one of the UK’s leading exporters, is expected to gain significantly from the tariff reductions, which will help manufacturers remain competitive in the American market.

Aerospace companies, including industry giant Rolls-Royce, are set to benefit from enhanced access to US buyers.

Business and Trade Secretary Jonathan Reynolds also commented: "British car manufacturers can now export to the US at a significantly reduced 10% tariff rate—down from 27.5%—and aerospace goods will see 10% tariffs removed, saving sectors hundreds of millions each year and safeguarding thousands of jobs."

Concerns persist for the UK’s steel and aluminum industries, which remain subject to a 25% US tariff.

Without a finalized agreement by the July 9 deadline, these tariffs could double to 50%, posing a substantial threat to these sectors.