7:15 am, March 27, 2025
The government is engaged in ‘extensive’ discussions with the US about what tariffs will mean for the UK car industry, after the Society of Motor Manufacturers and Traders (SMMT) branded Trump’s decision to introduce tariffs as ‘disappointing’.
The White House announced the import tariff on Wednesday, claiming it will boost domestic manufacturing and protect US jobs. It’ll come into effect on April 2.
Announcing the move, Trump said: ‘The beauty of the 25 [%] is it’s one number. And that number is going to be used to reduce debt greatly in the United States.
‘Basically I view it as reducing taxes and also reducing debt, and within a fairly short period of time I think we’re going to have a balance sheet which will be outstanding.’
Chancellor Rachel Reeves said the UK and US economies are ‘closely intertwined’.
She told Times Radio: ‘The prime minister went to Washington just a couple of weeks ago and met the US president, and we are now having extensive talks with our counterparts in the US to protect trade between our countries, those conversations will continue.
‘Obviously, the announcements of tariffs is something that the US plan to bring in next week, but we are in discussions about what that means for the UK.
‘A million British people work for American firms. A million Americans work for British firms. Our two economies are so closely intertwined.
‘I believe – and we make this case to the United States – that free trade, fair trade, is good for both of our countries, but let’s see where we get to in the next few days.’
According to SMMT figures, around four out of five cars made in the UK are exported and some 16.9% of UK car exports were to the US last year.
JLR could be one of the UK vehicle manufacturers most affected by tariffs.
SMMT chief Mike Hawes warned the move risks hurting both UK and US manufacturers and consumers.
Hawes said it was ‘not surprising but, nevertheless, disappointing’ and urged both governments to strike a deal that avoids further damage.
‘If, as seems likely, additional tariffs are to apply to UK-made cars, it’s a blow to a long-standing and productive relationship,’ he said.
‘US consumers enjoy vehicles built in Britain by some iconic brands, while thousands of UK motorists buy cars made in America.
‘Rather than imposing new tariffs, we should be creating opportunities for both British and American manufacturers as part of a mutually beneficial relationship – benefiting consumers and creating jobs and growth on both sides of the Atlantic.’
He called on both sides to ‘come together immediately and strike a deal that works for all’.
The tariffs announced by the Trump administration also look to create issues for US car firms.
Many source their components from across the globe – meaning they could be faced with higher prices.
By Wednesday afternoon, shares in General Motors dropped about 3% while Stellantis fell nearly 4%.
Ford’s stock rose slightly, however.
Story updated: March 27, 10:58
