UK Car Import Data: Will the US-UK Trade Deal Eliminate Car Import Tariffs?

The trade relations between the United States and the United Kingdom have always been of great significance. With the recent discussions surrounding the US-UK trade deal, there is a lot of speculation about how it will impact various sectors, including the automotive industry. One topic that has gained significant attention is the possibility of the US-UK trade deal eliminating car import tariffs. This move could have far-reaching implications for both countries and their automotive industries. But what does the UK car import data suggest about this potential development and impact on US import tariffs?

The US and the UK have agreed on tariffs concerning certain goods exchanged between the two nations. The blanket 10% tariffs imposed by President Donald Trump on imports from nations worldwide still affect most UK products entering the US. However, the agreement has led to a reduction or elimination of tariffs on certain UK exports, such as cars. Based on the data on US car exports to the UK, the US is the 15th biggest supplier & exporter of cars to the United Kingdom. The United Kingdom imported cars worth $1.22 billion from the USA in 2024, as per the US export data.   

According to the United Kingdom import data and the UK car import data, the UK car imports accounted for $56.73 billion in 2024, an increase of 1% from the previous year. The United Kingdom is the 3rd largest car importer in the world, as per the latest global trade data for 2024-25. In this article, we will analyze the UK car import data and explore the potential impact of the US-UK trade deal on car import tariffs.

UK-US Trade Deal: Car tariffs cut to 10%

• Trump had added a 25% import tax on cars and car components entering the US in addition to the existing 2.5% tax. As the US & UK cut car tariffs, this will benefit both economies.  
• The figure has been reduced to 10% for a maximum of 100,000 UK cars, aligning with the quantity of cars the UK exported last year.
• However, the vehicles exported beyond this quota will have a 27.5% import duty.
• Last year, cars accounted for the largest UK export to the US, valued at around £9 billion.
• While the UK currently charges a 10% tax on car imports from the US, it remains uncertain whether this will change.
• The US has made past demands for the tax to be reduced to 2.5%.
• Trump declared that exports of Rolls-Royce engines & aircraft parts from the UK to the US will be free from tariffs.

Current Scenario of Car Imports in the UK

Before delving into the potential impact of the US-UK trade deal on car import tariffs, it is essential to understand the current scenario of car imports in the UK. The UK is a significant market for car imports, with various brands and models being imported from different countries around the world. In recent years, the UK has imported a substantial number of cars from the European Union (EU) member states, as well as from non-EU countries such as Japan, South Korea, and the United States, as per the data on UK car imports by country.

According to the latest UK car import data on UK car imports by country, the EU remains the largest source of car imports into the UK, accounting for a significant percentage of the total imports. However, imports from non-EU countries have been increasing steadily, with the US being one of the key players in this market. The UK's car import data reflects a diverse range of vehicles being imported into the country, catering to the varied preferences of consumers.

United Kingdom Car Imports by Country: Top UK Car Import Partners

United Kingdom car imports by country showcase the top UK car import partners, highlighting the significant trade relationships in the automotive industry. The exported vehicles symbolize the strong economic ties between the United Kingdom and its partners, fostering mutual growth and collaboration. The top 10 UK trade partners for car imports, or the major UK car import sources, as per the United Kingdom shipment data and UK car import data for 2024, include:

1. Germany: $15.37 billion (27.1%)

Germany is the top car import partner for the United Kingdom, accounting for a significant portion of the country's car imports. German car manufacturers such as BMW, Volkswagen, and Mercedes-Benz are highly popular among UK consumers, contributing to Germany's strong position as a key car import partner for the UK, as per the data on Germany car exports to the United Kingdom.

2. China: $5.19 billion (9.2%)

China is another important car import partner for the United Kingdom, with a growing number of Chinese car brands gaining popularity among UK consumers. The rise of electric vehicles in the UK market has also led to an increase in car imports from China, further solidifying China's position as a top car import partner for the UK.

3. Spain: $5.14 billion (9.1%)

Spain is a significant car import partner for the United Kingdom, with several well-known Spanish car manufacturers such as SEAT and Renault contributing to the country's car imports. The proximity of Spain to the UK also makes it a convenient and cost-effective import partner for UK consumers.

4. Czech Republic: $4.09 billion (7.2%)

The Czech Republic is a key car import partner for the United Kingdom, with Czech car brands such as Škoda gaining popularity among UK consumers. The affordability and reliability of Czech cars make them a popular choice for UK car buyers, leading to a steady flow of car imports from the Czech Republic.

5. Slovakia: $3.71 billion (6.6%)

Slovakia is another important car import partner for the United Kingdom, with Slovakian car manufacturers such as Kia and Hyundai making significant contributions to the UK's car imports. The high quality and innovative design of Slovakian cars have helped to establish Slovakia as a top car import partner for the UK.

6. France: $3.10 billion (5.5%)

France is a well-established car import partner for the United Kingdom, with French car brands such as Peugeot and Renault enjoying a strong presence in the UK market, as per the data on France car exports to the UK. The reputation for style and performance associated with French cars has helped to maintain France's position as a key car import partner for the UK.

7. Japan: $2.99 billion (5.3%)

Japan is a major car import partner for the United Kingdom, with Japanese car manufacturers such as Toyota, Nissan, and Honda being highly popular among UK consumers. The advanced technology and reliability of Japanese cars have made them a top choice for UK car buyers, resulting in a significant volume of car imports from Japan.

8. South Korea: $2.39 billion (4.2%)

South Korea is a significant car import partner for the United Kingdom, with South Korean car brands such as Hyundai and Kia enjoying widespread popularity among UK consumers. The competitive pricing and innovative features of South Korean cars have helped to establish South Korea as a key car import partner for the UK.

9. Romania: $1.76 billion (3.1%)

Romania is an emerging car import partner for the United Kingdom, with Romanian car manufacturers such as Dacia gaining traction in the UK market, as per the car export data of Romania car exports to the United Kingdom. The affordability and practicality of Romanian cars have made them an attractive option for budget-conscious UK car buyers, leading to an increase in car imports from Romania.

10. Turkey: $1.64 billion (2.9%)

Turkey rounds out the top 10 car import partners for the United Kingdom, with Turkish car manufacturers such as Fiat and Renault contributing to the country's car imports. The diverse range of car models produced in Turkey has helped to establish Turkey as a key car import partner for the UK, catering to a wide range of consumer preferences.

Top 10 UK Car Importers: United Kingdom Car Importers Database

The UK Car Importers Database provides valuable insights into the leading car importers in the United Kingdom. This database offers a comprehensive list of the top car importers in the United Kingdom, allowing businesses to connect with reputable suppliers and make informed decisions. The list of top car importers in the UK, as per the UK car importers data for 2024-25, includes: 

United Kingdom Car Imports in the Last 10 Years: Yearly UK Car Import Data

The Potential Impact of the US-UK Trade Deal

The US-UK trade deal has been a topic of discussion for some time, with both countries expressing their desire to strengthen economic ties through a comprehensive trade agreement. One of the key issues on the negotiating table is the elimination of tariffs on various goods, including cars. If the US-UK trade deal includes the elimination of car import tariffs, it could significantly impact the automotive industry in both countries.

For the UK, the elimination of car import tariffs from the US could open up new opportunities for consumers and businesses alike. It could lead to an increase in the variety of cars available in the UK market, as well as potentially lower prices for consumers. The UK car import data could see a shift in the sources of imported cars, with more traded vehicles coming in from the US to meet the growing demand.

From the US perspective, the elimination of car import tariffs could boost exports to the UK and strengthen the US automotive industry. US car manufacturers could gain a competitive edge in the UK market, potentially increasing their market share and revenue.

UK Car Import Trends: Automotive Sector Overview

UK Car Import Data

US-UK Free Trade Deal: Tariffs & Impacts

Key Provisions

• Car Tariffs: Reduction from 27.5% to 10% on the first 100,000 UK-made vehicles exported to the US annually. Vehicles beyond this quota are subject to a 25% tariff.
• Steel and Aluminum: Elimination of US tariffs on British steel and aluminum.
• Ethanol Imports: The UK will eliminate its 19% tariff on US ethanol, allowing up to 1.4 billion liters annually.

Market Implications

• UK Automotive Sector: Reducing car tariffs is expected to bolster UK car exports to the US, potentially increasing market share and revenue for UK manufacturers.
• US Automotive Market: While consumers may benefit from a greater variety of vehicles and potentially lower prices, US automakers express concerns about increased competition from UK imports.

UK Car Imports from the US: Data Snapshot

Insights:

• UK buyers are increasingly purchasing US electric vehicles.
• Tesla’s Model Y and Model 3 comprise over 40% of all US auto shipments to the UK.

UK Car Exports to the US

Insights:

• The US is the single largest market for UK-built premium and luxury vehicles.
• The weakening pound vs. dollar in 2023–24 boosted the competitiveness of UK exports.

Tariffs: Before vs. After US-UK Trade Deal

Impact Scenarios:

• Elimination of tariffs could reduce average car cost by $1,200–$3,000 per vehicle.
• EV imports from the US may increase by 25–30% if battery-related tariffs are removed.

Strategic Implications

For UK Consumers:

• Lower prices on American vehicles (especially EVs).
• A wider range of choices in pickup trucks and SUVs.

For UK Importers & Retailers:

• Greater margins due to reduced customs costs, hence, the importers will import car from UK in greater quantity. 
• Incentive to expand dealership partnerships with US automakers.

For US Exporters:

• Opens up the mid-range and high-end vehicle market in the UK.
• Faster customs clearance if automotive standards are mutually recognized.

Forecast 2025–2027 (Post-Tariff Elimination)

Conclusion

In conclusion, the potential elimination of car import tariffs under the US-UK trade deal could have a significant impact on the automotive industry in both countries. More car dealers will now import car from UK. The UK car import data indicates a robust market for imported vehicles, with the US being a key player in this space. The removal of US import tariffs could lead to new opportunities and challenges for the automotive sector, requiring careful consideration and strategic planning.

We hope that you liked our insightful and data-driven blog report on the UK car import data and the impact of the US-UK trade deal in eliminating car tariffs. Visit TradeImeX to get a list of the top car importers in the UK. Contact us at info@tradeimex.in and get a customized database report on global trade data as per your business needs. Get the latest United Kingdom import-export data for the first quarter of 2025 with our exclusive database!