The UK automotive industry is reeling after President Donald Trump slapped a massive 25 per cent tariff on the all foreign vehicles imported into the United States.
Speaking from the White House last night, President Donald Trump announced that the United States would impose new import taxes on cars and car parts coming into the US at a rate of 25 per cent.
The new vehicle tariffs will come into effect from April 2, although the measures for car parts will start in May. The President said it would create "tremendous growth" for the US car market.
Last year, the United States imported around eight million cars accounting for $240billion (£186billion) in trade. Around 17 per cent of cars exported from Britain went to the US in 2024.
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The US is the UK's second-largest trade partner for British cars, with the European Union having a 54 per cent share of exported British vehicles.
The move by Donald Trump has rocked the global automotive industry, with experts and analysts fearing that this could have a huge impact on worldwide trade.
Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), said while the announcement was not "surprising", it was still "disappointing".
He added: "The UK and US auto industries have a long-standing and productive relationship, with US consumers enjoying vehicles built in Britain by some iconic brands, while thousands of UK motorists buy cars made in America.
"Rather than imposing additional tariffs, we should explore ways in which opportunities for both British and American manufacturers can be created as part of a mutually beneficial relationship, benefiting consumers and creating jobs and growth across the Atlantic.
"The industry urges both sides to come together immediately and strike a deal that works for all."
Responding to the tariffs, Rachel Reeves stated that the UK wanted to avoid a trade war with the United States and would continue to monitor the situation before making any retaliatory decisions.
The Chancellor told Sky News: "We're not, at the moment, at a position where we want to do anything to escalate these trade wars.
"Trade wars are no good for anyone. It will end up with higher prices for consumers, pushing up inflation after we’ve worked so hard to get a grip of inflation, and at the same time will make it harder for British companies to export."
The European Automobile Manufacturers’ Association (ACEA) also expressed its "deep concern" about Trump's new tariffs, describing it as a "watershed moment" as the sector continues to move towards alternative fuel types.
European car companies export between 50 per cent and 60 per cent of the vehicles they make to the US, potentially creating havoc for legacy manufacturers.
Sigrid de Vries, ACEA Director General, said: "We urge President Trump to consider the negative impact of tariffs not only on global automakers but on US domestic manufacturing as well.
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"Tariffs will not just impact imports into the US, a penalty that American consumers are likely to pay, but measures on automotive parts will also hurt auto makers producing cars in the US for export markets."
Similarly, Prime Minister Shigeru Ishiba of Japan said "every option is on the table" in retaliation for Trump's new tariffs, adding that Japan was making the largest amount of investment into the US.
He highlighted that the Japanese government needs to consider what would be the best option for its people by considering the "most effective response".
Even Elon Musk said that Tesla would not go unscathed, despite his close links with the President. He described the tariff impact on his electric vehicle brand as "still significant".
He added: "This will affect the price of parts in Tesla cars that come from other countries. The cost impact is not trivial."
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Speaking from the White House last night, President Donald Trump announced that the United States would impose new import taxes on cars and car parts coming into the US at a rate of 25 per cent.
The new vehicle tariffs will come into effect from April 2, although the measures for car parts will start in May. The President said it would create "tremendous growth" for the US car market.
Last year, the United States imported around eight million cars accounting for $240billion (£186billion) in trade. Around 17 per cent of cars exported from Britain went to the US in 2024.
Do you have a story you'd like to share? Get in touch by emailing [email protected]
The US is the UK's second-largest trade partner for British cars, with the European Union having a 54 per cent share of exported British vehicles.
The move by Donald Trump has rocked the global automotive industry, with experts and analysts fearing that this could have a huge impact on worldwide trade.
Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), said while the announcement was not "surprising", it was still "disappointing".
He added: "The UK and US auto industries have a long-standing and productive relationship, with US consumers enjoying vehicles built in Britain by some iconic brands, while thousands of UK motorists buy cars made in America.
"Rather than imposing additional tariffs, we should explore ways in which opportunities for both British and American manufacturers can be created as part of a mutually beneficial relationship, benefiting consumers and creating jobs and growth across the Atlantic.
"The industry urges both sides to come together immediately and strike a deal that works for all."
Responding to the tariffs, Rachel Reeves stated that the UK wanted to avoid a trade war with the United States and would continue to monitor the situation before making any retaliatory decisions.
The Chancellor told Sky News: "We're not, at the moment, at a position where we want to do anything to escalate these trade wars.
"Trade wars are no good for anyone. It will end up with higher prices for consumers, pushing up inflation after we’ve worked so hard to get a grip of inflation, and at the same time will make it harder for British companies to export."
The European Automobile Manufacturers’ Association (ACEA) also expressed its "deep concern" about Trump's new tariffs, describing it as a "watershed moment" as the sector continues to move towards alternative fuel types.
European car companies export between 50 per cent and 60 per cent of the vehicles they make to the US, potentially creating havoc for legacy manufacturers.
Sigrid de Vries, ACEA Director General, said: "We urge President Trump to consider the negative impact of tariffs not only on global automakers but on US domestic manufacturing as well.
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"Tariffs will not just impact imports into the US, a penalty that American consumers are likely to pay, but measures on automotive parts will also hurt auto makers producing cars in the US for export markets."
Similarly, Prime Minister Shigeru Ishiba of Japan said "every option is on the table" in retaliation for Trump's new tariffs, adding that Japan was making the largest amount of investment into the US.
He highlighted that the Japanese government needs to consider what would be the best option for its people by considering the "most effective response".
Even Elon Musk said that Tesla would not go unscathed, despite his close links with the President. He described the tariff impact on his electric vehicle brand as "still significant".
He added: "This will affect the price of parts in Tesla cars that come from other countries. The cost impact is not trivial."
Find Out More...