Rolls Royce Stock- Rolls-Royce and Aston Martin Surge as UK-US Trade Deal Eases Tariffs

Rolls Royce Stock- Strategic Agreement Boosts British Exporters

Rolls Royce Stock– Shares of British icons Rolls-Royce and Aston Martin rallied sharply on Thursday after a new trade agreement between the UK and US lowered key tariffs, opening broader access to American markets for British-made goods.

Rolls-Royce, a major supplier of jet engines, was among the top gainers on the FTSE 100 index. Following an announcement from US Commerce Secretary Howard Lutnick, it was confirmed that Rolls-Royce’s aerospace components would be exempt from US tariffs. As a result, the company’s shares climbed 4.5% to close at 783.46p—above their levels prior to the tariff hike imposed by former President Donald Trump on April 2.

Lutnick stated, “We’ve agreed to let Rolls-Royce engines and those kind of plane parts come over tariff free,” marking a significant win for the UK’s aerospace sector.

Aston Martin Roars Ahead on U.S. Market Access

Luxury automaker Aston Martin saw its stock surge by 14% following the trade news. The company, which generates more than a third of its revenue from the US, had previously warned of scaled-back American exports due to the tariff war. Thursday’s gains reflect renewed investor confidence and relief from potential revenue constraints.

UK Engineering Sector Sees Broad Gains

Other British engineering firms also saw positive momentum. Melrose, IMI, and Weir posted strong gains on hopes that the trade breakthrough would strengthen transatlantic business opportunities. Additionally, officials briefed that the two countries are now planning a deeper aerospace technology partnership, promising further growth opportunities.

Key Terms of the Deal Explained

The new agreement, reached during a call between US President Trump and UK Prime Minister Keir Starmer, will impose a reduced 10% tariff on the first 100,000 British cars exported to the US each year. This is a significant drop from the previous 27.5% rate.

While this is a boon for several luxury brands, including Rolls-Royce Motors (owned by BMW), Jaguar Land Rover, and Bentley, there are some limitations. Automotive analyst Rella Suskin of Morningstar explained: “The limitation of 100,000 cars annually to the US at a 10% tariff means that Jaguar is unable to take any market share from a ‘preferential’ tariff relative to European automakers. Jaguar Land Rover sold just over 106,000 vehicles in the US in 2024.”

Suskin concluded the deal would “maintain their status quo,” noting that manufacturers like BMW—which already produces in the US—stand to gain more.

Industry Reactions Mixed

Mike Hawes, CEO of the Society of Motor Manufacturers and Traders (SMMT), welcomed the agreement: “The application of these tariffs was a severe and immediate threat to UK 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.”

However, broader market reaction remained subdued. The FTSE 100 closed 0.3% lower, while the FTSE 250, made up of more domestically focused firms, ended the day 0.6% higher.

Broader Implications and Global Context

The trade agreement follows China’s decision to exempt US-made aircraft engines from tariffs, signaling a global trend of easing trade restrictions in the aerospace industry. China’s Comac C919, for example, depends heavily on turbines from General Electric, a parallel seen in the UK’s reliance on Rolls-Royce.

In summary, while the trade deal doesn’t resolve all concerns, it brings meaningful relief to key UK industries. With tariff pressure reduced, British exporters like Rolls-Royce and Aston Martin are well-positioned to benefit from enhanced transatlantic trade channels.

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