A groundbreaking trade deal between the US and UK is set to boost the British aerospace industry, with plane parts manufactured by Rolls-Royce reportedly exempted from US import tariffs.
Boost to £40bn UK Aerospace Industry as Rolls-Royce Engines and Aircraft Parts Reportedly Exempted from US Tariffs
The British aerospace industry is set to receive a significant boost following reports that plane parts manufactured by Rolls-Royce will be exempted from US import tariffs, part of the evolving trade agreement with Donald Trump‘s administration.
Rolls-Royce is a British luxury car brand that has been synonymous with excellence and innovation since its inception in 1904.
Founded by Charles Rolls and Henry Royce, the company has a rich history of producing high-performance vehicles.
With a focus on precision engineering and exceptional craftsmanship, Rolls-Royce has become a benchmark for luxury automobiles.
The brand is known for its iconic models such as the Phantom and Ghost, which have been favored by royalty and celebrities alike.
UK Aerospace Industry Sees Guarantee on Zero Tariffs
The UK businesses secretary, Jonathan Reynolds, has stated that the wider aerospace industry would have ‘a specific guarantee of zero tariffs’ in the agreement. This development is expected to provide certainty to a £40bn sector, which supports 450,000 jobs in the UK.
A trade deal between the US and UK announced last week includes exemptions for engines from Rolls-Royce and similar plane parts, allowing them to enter the US market without tariffs. However, details of the agreement are still being finalised.
Importance of Aerospace Trade Agreement
The aerospace industry is crucial to both the US and UK economies. Boeing imports Rolls-Royce engines for its commercial airliners, while repair and maintenance facilities in the US require a regular flow of parts. The agreement on trade between the two nations comes after relief was offered to the car and steel industries, amid fears of job losses.
Although some terms of the deal remain unclear, it is expected that tariffs on cars will decrease from 27.5% to 10% for at least 100,000 vehicles per year, while steel tariffs are set to be zero. The agreement has already prevented job losses at Jaguar Land Rover’s plant in the West Midlands.
Implications of Aerospace Trade Agreement
The aerospace trade agreement is likely to have a significant impact on both countries’ economies and industries. With the deal providing certainty for the UK aerospace industry, it is also expected to boost British Airways owner IAG as it buys planes worth $10bn (£7.5bn). The agreement comes after the US-UK deal offered relief to the car and steel industries, amid fears of hefty job losses.
The negotiations have been a step towards reducing tensions between the two nations, particularly in regards to trade policies. As part of the finalised deal, Peter Mandelson, Britain’s ambassador to the US, stated that the agreement on UK car exports to the US had immediately prevented job losses at Jaguar Land Rover’s plant in the West Midlands.
Background on Aerospace Trade Investigation
The US has recently launched an investigation into whether imported aircraft, jet engines, and parts pose a threat to national security. The examination of ‘the concentration of US imports’ on a small number of suppliers and ‘the impact of foreign government subsidies and predatory trade practices’ was expected to pave the way for higher tariffs.
However, the aerospace and aviation industry has been lobbying the White House to retain a 45-year-old treaty that allowed aircraft and parts to be traded duty-free across borders.
