Carmakers were rocked earlier this year when the US president announced a swathe of new tariffs, including 25% charges on all cars imported into the US.
Last week, Aston Martin said it had begun ‘limiting imports’ to the US in response to the tariffs, while JLR has only recently resumed exports, following a temporary pause.
Now however, it seems that a compromise deal is likely to have been reached which will see the measures watered down considerably.
The BBC reports that the package could see the introduction of lower tariffs on US cars into the UK, from 10% to just 2.5%.
In exchange, the broadcaster says that the UK ‘could win some sort of tariff-free or lower tariff quota exemption’.
It is hoped that similar terms will also be struck to reduce tariffs on British steel and aluminium.
Another option could be for a quota system to be introduced, which would see tariffs cut or axed altogether for a certain number of cars, with additional charges on vehicles above that figure.
The full details are expected to be made public this afternoon (May 8) at 3pm, when Trump will lead a press conference from Washington.
The president has promised a ‘very big and exciting day’ for US-UK relations having earlier hinted at a trade deal with a ‘big and highly respected country’.
Prime minister Sir Keir Starmer, who had been due to spend the day focusing on events to mark the 80th anniversary of VE Day, said he would ‘act in our national interest’ to ‘deliver security and renewal for our country’.
In a post on his Truth Social platform, Trump said: ‘The agreement with the United Kingdom is a full and comprehensive one that will cement the relationship between the United States and the United Kingdom for many years to come.
‘Because of our long time history and allegiance together, it is a great honour to have the United Kingdom as our FIRST announcement. Many other deals, which are in serious stages of negotiation, to follow!’
As mentioned by Trump himself, the deal with the UK will be the first agreement announced since he introduced the tariffs on April 2.