US president Donald Trump’s decision to impose a 25% import tariff on cars could inflict a serious blow to the UK automotive industry.
The US is the second largest export market after the EU for British-built vehicles, meaning the tariffs which will come into effect on 2 April could impact the UK sector.
UK prime minister Keir Starmer on Wednesday said the UK would continue to seek closer trade ties with the US, including measures to ease tariffs, but stressed that all options remained on the table if talks failed.
Read more about the impact the Trump tariffs could have on the UK car industry below. Click the headlines to skip ahead
> Starmer seeks deal with US to avoid trade war after Trump’s car tariff blow
> Which UK carmakers will be hit hardest by Trump’s latest import tariffs
> UK has to take ‘different approach’ in talks on US tariffs – minister
> UK car output dips as Trump auto tariffs loom
> Car makers trail US high-grade market with levies set to hit
Trump’s decision to slap a 25% import tax on cars is “very concerning” but the UK will not be “jumping into a trade war” with America, Starmer has said.
The tariff on vehicles imported to the US will come into effect on 2 April in a blow to the UK automotive industry.
The prime minister said the UK would continue “intense discussions” with the US on closer trade ties, including measures to ease tariffs, but stressed that all options remained on the table if talks failed.
The UK’s automotive sector describes itself as “the engine room of Britain’s international trade”, boasting that it generates “£1 in every £8 the UK earns from exporting goods”.
But the UK’s carmakers — including Tata Motors (TATAMOTORS.NS)-owned Jaguar Land Rover, the BMW (BMW.DE)-owned Rolls-Royce and Mini, and Aston Martin (AML.L) — are weighing up the potential impact of Trump’s planned 25% tariffs on cars imported into the US. The new levies on cars and light trucks are due to take effect on 3 April.
Of the nearly 780,000 cars produced in Britain in 2024, eight in 10 were destined for overseas, according to figures from the Society of Motor Manufacturers and Traders (SMMT). Of the vehicles produced for international markets, almost 80% — representing 467,937 units — were exported to the top three markets: the EU, the US and China.
The UK has to take a “different approach” to other countries when it comes to negotiating tariffs with the US, a Treasury minister has suggested.
Darren Jones said “there is no easy answer” and there are “complicated issues” to be discussed.
A 25% tax on cars imported into the US will come into effect on 2 April, Donald Trump has announced, in a blow to the UK automotive industry.
Production of cars and commercial vehicles saw an alarming 11.6% decline in February, according to new data from the Society of Motor Manufacturers and Traders (SMMT).
Just 82,178 vehicles were produced — a drop of 10,787 from February 2024 — in the 12th consecutive month of falling auto manufacturing output.
There was a particular decline in manufacturing for the home market, with a 22.3% plunge in vehicles manufactured to be sold in the UK market — down to 18,401.
Automakers’ bonds weakened in US debt markets on Thursday after Trump slapped 25% tariffs on car imports and warned of a broader trade war ahead.
Risk premiums, or the extra yield over Treasuries that investors demand, rose on recently issued notes from US units of Volkswagen AG (VOW3.DE) and BMW AG (BMW.DE). For example 5.35% Volkswagen notes due 2030, sold just last week, widened by 0.24 percentage points to 1.35 percentage points. The broader market is on track to weaken by less than a basis point.
Concerns about tariffs are weighing on new bond sales as well. In the junk bond market, French auto supplier Forvia SE (FRVIA.PA) is boosting the yield on its first US dollar offering to draw in sellers.
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