UK Car Industry Faces Uncertainty Over New US Tariffs

The UK car industry is bracing for potential ramifications as President Trump’s administration prepares to impose a 25 percent tariff on car imports. The new levies, set to take effect on April 3, will initially target fully assembled vehicles and will later encompass car parts such as engines, transmissions and electrical systems.

At a Rolls-Royce dealership in New York, sales representatives are noting significant concerns among customers who have placed orders for bespoke vehicles. Clients express anxiety that their purchases could be subject to the steep tariffs despite having ordered them prior to the announcement. The uncertainty surrounding the added costs may deter prospective buyers from committing to new purchases.

The US represents the second-largest export market for UK produced cars, accounting for nearly 17 percent of Britain’s automotive exports in 2024. The value of these exports reached £7.6 billion, highlighting the importance of this market to the UK automotive sector.

Companies such as Jaguar Land Rover, which exports a large number of its vehicles to the US, are particularly vulnerable to the new tariffs. The automotive business has already observed an uptick in shipments to the US following Trump’s election, with a notable increase in cars shipped in November last year.

Concerns extend beyond sales figures, as industry leaders warn that these tariffs could lead to a significant reduction in imports, potentially dropping by as much as 75 percent according to a 2024 study by the US International Trade Commission. This situation poses a serious risk to the UK’s car manufacturers, who are traditionally positioned at the higher end of the market and may struggle to pass on costs to consumers effectively.

As the industry navigates these challenges, voices from within are calling for urgent political intervention to mitigate potential damage from the tariffs. With the UK car industry heavily reliant on exports to the US, ensuring a stable trading relationship is more critical than ever for maintaining market share and supporting jobs in the sector.