Rolls-Royce shares jump after UK-US trade deal announcement
Rolls-Royce shares jumped 4% to just under 800p today following the announcement of a new UK-US trade deal that brings benefits to the aerospace company.
This morning’s share price has climbed back to levels last seen before Trump sparked the trade wars.
US Commerce Secretary Howard Lutnick confirmed that Rolls-Royce engines and aircraft parts would be exempt from tariffs, while President Donald Trump added that tariffs on Rolls-Royce products would fall from 25% to 10%.
Dan Coatsworth, investment analyst at AJ Bell said: “Rolls-Royce was a big winner from the trade deal as it won’t be subject to tariffs on aircraft engines shipped to Boeing in the US. That looks to be the reward for an undisclosed airline agreeing to buy $10 billion worth of planes from Boeing, no doubt featuring Rolls-Royce engines. Rolls-Royce’s shares immediately jumped on the news as investors recognised the special treatment the company received.”
Trump and UK Prime Minister Rishi Sunak said the trade deal aims to strengthen economic ties between the two countries.
Trump highlighted plans for collaboration on steel, greater access to UK markets for US beef and ethanol, and faster customs processing for US goods.
The trade deal includes zero tariffs on steel and aluminium, reduced car export tariffs from 27.5% to 10% for the first 100,000 vehicles and preferential treatment for pharmaceuticals.
Lucy Granger, head of international trade at the East Midlands Chamber said: “After such a protracted time of uncertainty, businesses will welcome this step forward to ensure smooth trading with the US. While this agreement is welcome, we still face 10% tariffs on exports, and we’re in a weaker position than we were a year ago. We need more clarity on pharmaceuticals, agriculture, and other sectors. Political leaders must continue to negotiate and improve the deal.”
Final details of the deal are set to be finalised in the coming weeks.
