The UK government has launched urgent talks with the United States after President Donald Trump announced a 25% car tariff on all vehicles and auto parts imported into the US, a move that could severely impact UK car exports and disrupt global supply chains. The Trump car tariff will take effect on 2 April and apply to both fully assembled cars and imported components.
UK Warns of Inflation and Economic Impact
Chancellor Rachel Reeves warned that the new tariff could drive inflation and stunt economic growth in the UK. “Trade wars are no good for anyone,” she told Sky News. “We are working hard to secure a better trading relationship with the United States. The coming days are critical.”
The Office for Budget Responsibility echoed the concerns. Chair Richard Hughes said the tariff could hit government spending and raise prices across the automotive market.
Trump Justifies Tariff as Boost for US Industry
Speaking from the Oval Office, Trump described the new tariff as “very exciting,” claiming it would fuel job creation and investment in the American automotive sector. “What we’re going to be doing is a 25% tariff for all cars that are not made in the United States,” he said.
The US imported around eight million cars last year, with Mexico, Canada, Germany, Japan, and South Korea among the biggest exporters to the American market. Mexico is expected to be hit hardest, as many carmakers, including BMW, Nissan, Volkswagen, and Toyota, rely on its manufacturing base.
British Brands Like JLR and Mini Set to Suffer
The tariff will deal a major blow to UK-based manufacturers such as Jaguar Land Rover (JLR), whose largest market is the United States. JLR has recently seen strong demand for its Range Rover and Defender models. Mini, which produces its vehicles in the UK and China, will also be affected.
Cupra and Lotus, both aiming to expand into the US market but lacking local manufacturing facilities, could face similar challenges. Even carmakers with partial US operations, like BMW and Mercedes-Benz, will feel the impact—particularly for models imported from Mexico, such as BMW’s 3 Series.
US-Based Carmakers Also at Risk
The new rules will also affect US automakers that rely on parts or vehicles produced abroad. General Motors, for instance, imports from Canada, China, and Mexico—countries now subject to the 25% tariff. These added costs could ripple through the domestic supply chain and consumer pricing.
Industry Reacts with Disappointment
The Society of Motor Manufacturers and Traders (SMMT) called the announcement “disappointing.” CEO Mike Hawes urged leaders on both sides to reach a deal quickly: “The UK and US auto industries have a long-standing and productive relationship. We should be creating opportunities, not barriers.”
European Commission President Ursula von der Leyen also criticized the move. “Tariffs are taxes—bad for businesses and worse for consumers,” she said, adding that the EU would review the announcement and respond in a way that safeguards its economic interests.
Wave of Protectionist Policies
This new Trump car tariff is part of a broader strategy by the US president to protect domestic manufacturing. Trump has introduced a series of tariffs since taking office for a second term, aiming to push global brands to shift production stateside. He stressed that no tariffs will apply to vehicles built within the US.
