Aston Martin and Rolls-Royce Shares Jump After US Tariff Relief
Synopsis
British manufacturers breathed a sigh of relief this week as the US-UK trade deal brought some welcome cuts to tariffs on key British exports, sparking a strong rise in the Aston Martin share price…
British manufacturers breathed a sigh of relief this week as the US-UK trade deal brought some welcome cuts to tariffs on key British exports, sparking a strong rise in the Aston Martin share price and Rolls-Royce shares. The deal has injected new energy into Britain’s automotive, aerospace, and steel sectors, each of which stands to benefit from easier access to the US market.
Tariff Cuts Spark Rally in Aston Martin Share Price and Rolls-Royce Shares
Both Aston Martin and Rolls-Royce saw their shares rise after the announcement. The US agreed to reduce tariffs on cars, jet engines, and steel, though a 10% base rate still applies to some products. These changes mark a notable shift from the much higher tariffs seen in recent years and reflect a new optimism among British manufacturers.
The sportscar specialist Aston Martin Lagonda and jet engine legend Rolls-Royce Holdings were among the first to feel the benefits. Rolls-Royce shares pushed up by 3.7%, hitting £7.94 during the day, while Aston Martin’s share price also rallied as investors responded positively to improved export prospects.
Automotive Industry Applauds Deal but Wants More Progress
The automotive industry, particularly luxury carmakers, welcomed the tariff relief, which sharply lowers levies on British-made cars entering the US market. The US has now set a quota of 100,000 UK-made cars a year, with a 10% tariff. The rate significantly dropped from the 27.5% imposed under Trump, though it remains higher than the previous 2.5%.
Mike Hawes, Chief Executive of the Society of Motor Manufacturers and Traders (SMMT), described the decision as “great news for the industry and consumers”. He warned that prolonged high tariffs would have led to job cuts at several luxury manufacturers who rely on American buyers. Hawes emphasised that while this trade deal helps stabilise the sector, further negotiations are needed to reduce barriers and fully restore pre-2017 conditions.
Keir Starmer, speaking from the headquarters of JLR (Jaguar Land Rover) – the UK’s largest auto employer and a major US exporter – held discussions directly with Donald Trump. The move signals an effort to secure more stable long-term access for British carmakers.
Rolls-Royce Shares Rise as Jet Engines Avoid Tariffs
Another big winner from the deal was Rolls-Royce. The iconic British jet engine manufacturer supplies its products for Boeing 787 passenger jets, a popular model used around the world. Donald Trump confirmed that Rolls-Royce engines would now be exempt from US tariffs, giving Rolls-Royce shares a noticeable boost.
Boeing’s own shares jumped by 4% following news that a UK company plans to purchase Boeing aircraft worth $10bn (£7.5bn). The exemption for Rolls-Royce engines reflects their importance not only to the UK, but also to global aviation supply chains.
However, questions remain for the rest of Britain’s aerospace industry. While some companies wait for clarity on whether tariffs on other aerospace parts will persist, there is cautious optimism that rates may return to the 0% seen before April. The White House also hinted that US firms would soon enjoy preferential access to British-made aerospace components.
Relief for the UK Steel Sector, but Some Concerns Remain
The deal also removes a 25% tariff on British steel exports, a move hailed as a “major relief to the UK steel sector” by Gareth Stace, managing director of UK Steel. The industry now hopes for trade to pick up after a difficult period.
Not everything is resolved, though. Some steel-derived products could still face tariffs, and there are hints that future deals may restrict the use of Chinese material. One senior steel executive described the deal as “clearly very positive overall”, but warned that the UK must now keep pushing to protect the sector from further complications.
Not All Sectors Benefit Equally
While carmakers, jet engine manufacturers, and steel firms got good news, others were left frustrated. Tariffs on UK whisky remain at 10%, despite whisky making up about 2% of all UK goods exported to the US. The Scotch Whisky Association voiced hopes for a swift return to a “zero-for-zero tariff agreement” with US partners, but the new deal hasn’t delivered this yet.
Britain’s beer sector also found itself confused after the government claimed reduced tariffs on US ethanol would lower beer prices. However, the British Beer and Pubs Association clarified that brewers don’t actually use ethanol in beer making and urged ministers to address the situation.
Industry Urges UK to Build on Tariff Success
Stephen Phipson, CEO of Make UK (the manufacturers’ group), praised the step forward presented by the deal, but stressed that Britain still needs a comprehensive industrial strategy to ensure ongoing success. He added that business leaders have called for more consistency in trade policy, especially since the recent election of the Labour government.
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