A UK online car marketplace has warned that the UK-US trade deal to reduce tariffs on British car exports offers only temporary relief, as the wider industry grapples with continued uncertainty over long-term access to the world’s largest automotive market.

Philipp Sayler von Amende, Chief Commercial Officer at Carwow, said the agreement to lower tariffs to 10% on up to 100,000 UK-made vehicles per year was “a significant relief” but stressed that the volume cap leaves exporters exposed.

“The previous 27.5% rate was unsustainable, particularly for premium UK brands that rely heavily on the US market,” he said. “While the new rate offers vital breathing room, it currently applies only to a 100,000-vehicle quota.”

Auto finance providers and leasing firms are expected to benefit in the near term from more predictable pricing on US-bound vehicles. Reduced tariffs are likely to support more competitive lending terms, particularly for high-value models. However, the limited duration and scope of the agreement mean lenders remain cautious about long-term planning.

The Society of Motor Manufacturers and Traders (SMMT) described the agreement as “great news” but emphasised the need for a broader deal to secure lasting benefits. “The application of these tariffs was a severe and immediate threat to UK automotive exporters,” said Chief Executive Mike Hawes. “The government has worked quickly and tirelessly with US counterparts, but this must be the first step towards broader and deeper cooperation.”

Jaguar Land Rover (JLR), which halted shipments to the US following the imposition of a 25% tariff in March, welcomed the move. “We thank both governments for reaching this deal swiftly,” said JLR CEO Adrian Mardell. “The car industry is vital to the UK’s economic prosperity, supporting 250,000 jobs across the country.”

The US agreement reduces tariffs on UK-built cars from 27.5% to 10% for up to 100,000 vehicles a year, roughly matching the 2023 export volume. British exports to the US last year were valued at £9bn, or more than a quarter of all car export value, according to the Office for National Statistics (ONS). The US is a key destination for luxury vehicles, including models produced by JLR, Aston Martin and Rolls-Royce.

Prime Minister Sir Keir Starmer said the deal “reduces massively” the tariff burden on UK manufacturers. “My government has put Britain at the front of the queue because we want to work constructively with allies for mutual benefit,” he said.

Donald Trump, who imposed the original 25% duties in March, hailed the agreement as “fair and reciprocal”, but indicated further negotiations would be needed to reach a “full and comprehensive” trade arrangement. His administration had cited national security and economic competitiveness as justification for the original tariffs on steel, aluminium and automotive imports.

Critics of the deal argue that the UK has conceded too much for a limited gain. Conservative leader Kemi Badenoch said Britain had been “shafted” in the talks, pointing out that most UK goods exports to the US will still face a 10% baseline tariff. “We cut our tariffs – America tripled theirs,” she said.

Aston Martin, which earns more than one-third of its revenue from the US market, also saw its share price rise after warning investors last week that it was limiting exports due to tariff pressures. (Rolls-Royce, whose jet engines have been exempted from new levies, according to US Commerce Secretary Howard Lutnick, is also a beneficiary in this regard).

(The trade agreement also includes quota-based relief on British steel and beef exports, removes tariffs on ethanol, and opens talks on digital trade barriers. But there were no changes to the UK’s digital services tax, which mainly targets US tech companies.)

Sayler von Amende warned that the deal could heighten trade pressure within Europe: “Manufacturers in France, Germany, and Italy remain exposed to a 25% tariff, and Brussels will now face calls to secure similar terms to protect European competitiveness.”

Despite the immediate gains, he cautioned that the broader UK car market remains under strain. “Economic uncertainty remains the bigger obstacle for UK dealers and consumers,” he said. “New car registrations fell by over 10% in April — the sixth decline in seven months — driven by rising costs, tax changes, and low consumer confidence.”