Donald Trump’s 25 per cent tariffs on US car imports from Wednesday could put 25,000 UK jobs in the automotive manufacturing sector at risk, a think tank has warned.
The Institute for Public Policy Research (IPPR) said the US President’s levies on UK-made cars entering the United States – which could make Range Rovers almost $30,000 pricier when sold in the country – would put ‘extreme pressure’ on Britain’s car makers and ‘threaten jobs and economic growth’.
With exports to America predicted to fall with Trump’s ‘reciprocal’ tariffs on ‘friends and foes’, the IPPR says employees at Jaguar Land Rover and the Cowley Mini factory will be among the most exposed.
Eight in ten motors produced in Britain are exported. And three quarters of the 603,565 cars built for overseas markets in 2024 were made for just three regions – one of these being the US.
While the EU accounted for 54 per cent of exports and China 6.6 per cent, some 16.9 per cent were destined for US ports.
It means some 102,000 cars – estimated to be worth £9billion – that came off British assembly lines ended up in the US last year. That accounts for one in eight (13 per cent) of all passenger cars made here in 2024.
Pranesh Narayanan, research fellow at IPPR, said: ‘Trump’s tariffs have huge potential to completely destabilise the UK car manufacturing industry, affecting tens of thousands of jobs and putting the government’s growth plans at jeopardy.’
Donald Trump’s 25% tariffs on US car imports from Wednesday could put 25,000 UK jobs in the automotive manufacturing sector at risk, a think tank has warned today
The US President is today expected to make good on his promise to slap 25 per cent tariffs on all foreign-made motors arriving in the US in a bid to spur domestic business and protect jobs.
Keir Starmer admitted on Tuesday that the UK won’t be spared, saying pleas for an exemption had failed.
The PM acknowledged the ‘likelihood’ that Britain will face hugely damaging levies on exports to the US on the president’s so-called ‘Liberation Day’.
Chancellor Rachel Reeves has also told Cabinet that there will be a major economic hit – not least on car makers.
Experts have estimated that the price of British cars sold in America will rise by thousands of dollars on Trump’s action – and could threaten demand for UK-made motor vehicles on the other side of the Atlantic, increasing the risk to British jobs.
Some 16.9% of the 603,595 cars produced for export last year – accounting for 102k units – were shipped to the US
According to the Society of Motor Manufacturers and Traders, the automotive manufacturing industry employs some 198,000 people directly and 813,000 in total across the wider sector.
Reacting to last week’s news of Trump’s proposed 25 per cent car tariffs, SMMT chief exec Mike Hawes said it was ‘not surprising but, nevertheless, disappointing’.
His comment came within moments of the trade body confirming that UK motor production had slumped for a 12th month in a row in February as the total output of cars and vans had dropped by 11.6 per cent to 82,178 units in the month.
Professor of Business Economics at the Birmingham Business School, David Bailey, described the situation to Auto Express as a ‘perfect storm’ for British car making.
He said it will have a ‘big impact’ on manufacturers in the UK and Europe who are ‘already being squeezed by falling sales in China, stagnant demand, and slow EV take up’.
US president Donald Trump has christened April 2 ‘Liberation Day’, vowing to impose tariffs on imports from around the world – including 25% levies on cars
JLR (formerly Jaguar Land Rover) delivered almost 100,000 cars to the US last year from various manufacturing destinations
Every JLR car sold in the US was imported and the majority come from UK factories (like the Halewood plant in Liverpool pictured) – though some from its other production locations including Nitra, Slovakia
North America is Rolls-Royce Motor Cars’ largest sales region of all
US deliveries accounted for around a third of the 5,712 luxury models Rolls-Royce produced at its Goodwood facility last year
Which UK car makers will likely take the biggest hit from Trump’s tariffs?
A number of UK car makers are likely to feel the brunt of Trump’s 25 tariffs.
JLR (formerly Jaguar Land Rover) delivered almost 100,000 cars to the US last year – all of them imported and the majority from UK factories – though some from other locations including the Nitra plant in Slovakia.
David Bailey says the tariffs could add as much as $27,000 to the price of a new Range Rover in the United States – almost certainly having a negative impact on sales.
‘We are waiting for further information on President Trump’s announcement of 25 per cent tariffs on all auto imports into the USA and we will make a further statement, as appropriate, in due course,’ a JLR spokesperson told This is Money last week.
North America is Rolls-Royce Motor Cars’ largest sales region, accounting for around a third of the 5,712 luxury models it produced at its Goodwood facility last year.
The US is also the biggest market for British prestige motor brands Aston Martin and Bentley.
McLaren – which exclusively makes supercars in Britain at its production centre in Woking – delivers more cars to North America than anywhere else globally, with almost half of its outputs shipped to the US.
BMW’s Plant Oxford, where Minis are produced for global markets including America, will also likely take a hit from the additional tariffs.
SMMT’s Mike Hawes said last week: ‘If, as seems likely, additional tariffs are to apply to UK-made cars, it’s a blow to a long-standing and productive relationship.
‘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.’
The US is also the biggest market for British sports car maker, Aston Martin
Bentley, which produces cars at its Crewe factory, sells most of its cars in the Americas too
McLaren – which exclusively makes supercars in Britain at its production centre in Woking – delivers more cars to North America than anywhere else globally
Mini’s Cowley factory in Oxford, which produces cars for the US market, will also likely take a hit from the additional tariffs
Tariffs another ‘low blow’ to the car making sector
Tom Jervis, consumer reporter at Auto Express, said the UK government’s failure to ‘carve out a deal’ would mark yet another ‘low blow’ to the nation’s struggling car industry.
‘Last year, roughly £9billion worth of cars were imported to the States from the UK, which accounts for around 15 per cent of all of our exports to the USA,’ he said.
‘However, tariffs go beyond just the automotive industry as studies have estimated blanket tariffs could see global UK exports fall by as much as 2.6 per cent – that may seem like a small figure, but we’re talking about losses of tens of billions of pounds.
‘Ultimately, however, it’s the blue-collar worker and consumer that will be affected the most; despite being our biggest export, the UK automotive manufacturing sector is already struggling due to fallout from the tough Zero Emission Vehicle mandate and increased competition from abroad – particularly from China.’
He added: ‘These tariffs from Trump could, in a very worse-case scenario, see UK factories close in favour of new facilities being opened up in the US, or perhaps more likely, instigate hundreds or even thousands of job losses as firms scramble to cut manufacturing costs further.
‘Either way, this will also impact the UK economy, meaning that everyone will be worse off as a result.’
UK’s struggling car makers: The trade body confirmed last week that production had slumped for a 12th month in a row in February as the total output of cars and vans dropped 11.6%
Reacting to last week’s news of Trump’s 25% tariffs on imported cars, SMMT chief exec Mike Hawes (pictured) said it was ‘not surprising but, nevertheless, disappointing’
Head of editorial at Carwow, Iain Reid, also warned that consumers ‘rarely win’ in trade wars of this magnitude, hinting at potential increases to new car prices in Britain if the UK Government imposes similar levies of vehicles moving in the opposite direction.
‘There will be losers at some point, either from the cost of tariffs being passed on to buyers, or from exporter cutting costs in the country where the cars are made.
‘UK workers at Aston Martin, Bentley, Land Rover, and McLaren will be watching closely, as the US is a key market for those brands.
‘Meanwhile, Tesla buyers here could see prices jump up if the UK hits back.
‘But, it’s not just American brands who’ll be impacted – BMW and Mercedes have big manufacturing plants in the US, meaning models like the X3 and GLE could get 25 per cent pricier if we apply import tariffs from US-built cars.
‘With UK living costs already high, a strong car industry matters to the wider economy. Let’s hope this is just political posturing before a sensible deal is struck.’
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