Tata Motors shares extend upside for 3rd day, rises 3% as UK strikes trade deal with US- Grow Mudra

Tata Motors shares extend upside for 3rd day, rises 3% as UK strikes trade deal with US

09 May , 2025 By : Debdeep Gupta

Shares of Tata Motors continued their upward momentum for the third consecutive day, rising 3 percent to Rs 701 per share on May 9, after the US and the United Kingdom announced a trade deal aimed at creating an aluminium and steel trading zone and strengthening the pharma supply chain.

This agreement marks the first trade deal made by the US since the imposition of sweeping tariffs under former President Donald Trump. It is also expected to reduce paperwork for British businesses looking to export goods to the US. However, the announcement lacked detailed commitments, and the final terms of the deal are still being worked out.

Based on the broad outline of the agreement, the existing 10 percent blanket tariffs on all UK imports will remain in place. For automobile imports, the deal allows up to 1 lakh vehicles to be imported with a 10 percent tariff. Any imports beyond that quota will continue to attract a 25 percent tariff, which is the current rate applied to all automobile imports.

British Prime Minister Keir Starmer chose the Jaguar Land Rover (JLR) plant in northern England, owned by Tata Motors, to unveil the trade deal with the US. Following a call with President Donald Trump, Starmer addressed JLR workers in Solihull, calling the development a "big win" for the automotive industry, as car export tariffs would be reduced from 27.5 percent to 10 percent.

This reduced tariff rate will apply to a quota of 100,000 UK-made cars, which is close to the total number of vehicles Britain exported to the US last year. “We are the first country to secure such a deal with the United States, and in a world facing global instability, that’s extremely significant,” Starmer stated.

Apart from benefits to carmakers, the deal also includes the removal of the 25 percent tariffs on UK steel exports, bringing them down to zero. UK farmers will gain from reciprocal market access that provides a tariff-free quota of 13,000 metric tonnes of beef. In addition, ethanol, used in beer production, will also see tariffs reduced to zero for UK exports.