Trump backpedals on car tariffs, but it’s still not enough for UK industry

US President Donald Trump has announced a softening of the nation’s controversial tariffs on automotive industry imports to the US, but the changes are unlikely to help brands manufacturing cars in the UK, leading to more uncertainty regarding the future of Britain’s biggest export.

Last month, Trump announced sweeping tariffs of 25 per cent on all foreign automotive imports — including cars and car parts. The unprecedented move sent shockwaves through the industry, with the likes of Jaguar Land Rover (JLR) pausing deliveries to the States and the stock prices of several manufacturers plummeting.

Now, the White House says it will ease tariff rules on imports of car parts – primarily due to the fact that almost all major US manufacturers, including Ford, General Motors and Tesla, use parts originating from China. The 25 per cent tariff on the parts themselves will remain, but car makers will now be reimbursed a defined amount depending on the value of the car the part is being used on and how many are sold.

Car makers already paying tariffs on imported cars will also be able to dodge other hefty tariffs, such as those paid on imports of steel and aluminium. 

Announcing the policies in Michigan as part of a celebration of the first 100 days of his second presidency, Trump hailed recent months and weeks as the “most successful first 100 days of any administration in the history of our country” — despite the Republican’s approval rating being at an all-time low.

As you may have noticed, while these changes should help US manufacturers, those importing vehicles into the US are still subject to the blanket 25 per cent tariff on foreign cars. This is the main issue affecting UK brands such as Bentley, JLR, McLaren, MINI and Rolls-Royce, with Aston Martin also announcing that it’s now limiting shipments to the US, relying mainly on its pre-existing stock.

US commerce secretary Howard Lutnick celebrated the changes, saying: “This deal will be a major victory for the president’s trade policy by rewarding companies who are already manufacturing domestically, while providing a runway to manufacturers who have expressed their commitment in investing in America and expanding domestic manufacturing.”

Auto Express has approached the UK’s Society of Motor Manufacturers and Traders for comment, but is yet to receive a response.

In the meantime, the UK government is continuing its efforts to secure an exclusive trade deal with the US in order to relieve the stress that tariffs are already placing on the nation’s car industry. Chancellor Rachel Reeves has already suggested that the UK could lower tariffs on imports of US cars to entice Trump into a deal, saying that she hopes for “tariff and non-tariff barriers [to be] reduced between the UK and the US”.

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