Prepare for 'carmageddon': Trump's tarriffs are a perfect storm for the UK auto industry
27 March 2025, 13:11
It’s more bad news for UK auto as Trump announces 25% tariffs on all car imports to the US.
Listen to this article
Loading audio...
This will have a big impact on the UK and EU auto industry, which was already being squeezed by falling sales in China, stagnant demand in Europe, and slow EV take-up. It's nothing short of a perfect storm for the European and UK auto industry.
Cars are the UK's number one goods export to the US, at £8.3bn in the year to the end of Q3 in 2024, out of around £60bn in total UK exports to the US.
Firms like JLR, Rolls Royce, Bentley, and Aston Martin will be most affected. The US is the UK's largest auto export market after the EU.
There will be a particular impact on the West Midlands, which is the number one exporting region to the US (think JLR and Aston Martin, for example).
Much of the UK auto industry is already operating well below capacity, and the tariffs will be a further hit for a struggling industry. Production cuts and job losses are likely. The UK government has yet to unveil its industrial strategy - this is urgently needed to help shore up the industry.
Meanwhile, German brands like Mercedes, BMW, and Audi will look to make more cars in the US (all have assembly operations there), which Trump hopes for. They also have Mexican operations, which appear to be caught by the tariffs.
The tariffs also cover components, so it will also hit US producers. Even Tesla recognises this.
The big risk is that we end up in a tit-for-tat trade war which means that we are all worse off. The UK will look to do a quick trade deal with the US to avoid these tariffs hitting UK auto. How likely that could be is the big question.
________________
David Bailey is Professor of Business Economics at the Birmingham Business School and a Senior Fellow at the UK in a Changing Europe programme.
LBC Opinion provides a platform for diverse opinions on current affairs and matters of public interest.
The views expressed are those of the authors and do not necessarily reflect the official LBC position.
To contact us email views@lbc.co.uk
