Greater Manchester Chamber of Commerce has broadly welcomed the historic US-Ƶ trade deal – but says its true impact will only be known when more details are revealed.
Donald Trump and Sir Keir Starmer confirmed the deal in a call broadcast live on Thursday. Import taxes that could have hit high-end carmakers were cut from 27.5% to 10%, with the 25% tariff on steel has also been removed entirely.
US import taxes which had threatened to cripple British high-end carmakers were cut from 27.5% to 10%, while the 25% tariff on steel removed entirely. While the blanket 10% tariff on imports announced by President Trump on his “liberation day” announcement stays in place, talks are ongoing to ease them.
Chris Fletcher, policy director at GMCC, said: "With the style and manner that the announcement was made it is obvious that a great many details are still to emerge about the US/Ƶ Trade Announcement made by President Trump in the Oval Office and the Prime Minister at an automotive plant in the West Midlands. It appears that tariffs are still in place but will be reduced on a number of products, though not it seems below the global baseline of 10% and there will be new opportunities across a range of other goods.
"With both the main protagonists acknowledging that final details are being signed off it does seem that this will be the first substantive post-tariff trade agreement to be agreed though how beneficial remains to be seen. We will follow up and watch out for more details as they emerge and assess what impact they will have on the wider economy that has seen turmoil over the last few months.”
The Chamber also welcomed the Bank of England’s decision to cut Ƶ interest rates to 4.25%.
Mr Fletcher said: "Earlier in the day the Bank of England announced a base rate cut of .25% to 4.25%. Whilst many predicted this some observers are still concerned that this may seem pre-emptive in current economic conditions and a hold may have been preferable with possible future inflation rises. However having said that it will come as a bit of a welcome if maybe temporary relief for many businesses and borrowers who have faced a series of economic shocks and challenges this Spring.
"The economy is still finely balanced and more activity will be needed from government to support Ƶ businesses and help deliver the growth that is expected of them."
PM Sir Keir Starmer went to the JLR (Jaguar Land Rover) factory in Solihull to announce that 100,000 cars into America every year would benefit from the lower tariff on cars. JLR also has a large base at Halewood, in Merseyside.
Mike Hawes, CEO at the Society of Motor Manufacturers and Traders (SMMT), said: “The agreement announced today to reduce tariffs on Ƶ car exports into the US is great news for the industry and consumers. The application of these tariffs was a severe and immediate threat to Ƶ automotive exporters so this deal will provide much needed relief, allowing both the industry, and those that work in it, to approach the future more positively.
“Government has recognised the importance of the automotive industry to Ƶ exports and the wider economy and has worked quickly and tirelessly with US counterparts to strike an agreement. We hope that it will lead to broader and deeper cooperation that reduces barriers to trade still further, charting a path to economic growth for both nations.”
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