US tariffs: UK ‘reserves right to respond’ after carmakers meeting

Friday 28 March 2025 5:04 pm
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Friday 28 March 2025 5:05 pm

The UK reserves the correct to reply to American tariffs, Sir Keir Starmer has mentioned, after US President Donald Trump’s determination to slap a 25 per cent import tax on vehicles.

The Prime Minister mentioned his authorities was concerned in ongoing discussions with the White Home aimed toward “mitigating the impression” of any levies however that in the end “our nationwide curiosity has to come back first”.

The US is the second largest export market after the European Union (EU) for vehicles constructed within the UK.

Requested whether or not the UK reserves the correct to reply to tariffs throughout a go to to Yorkshire, he mentioned: “Sure, after all. Clearly, any tariffs are regarding and we’re working onerous with the industries and sectors more likely to be impacted.

“None of them wish to see a commerce warfare, which is why we’re engaged in discussions with the US about mitigating the impression of tariffs.

“Now, that’s what we’re working onerous on, however in reply to your query, sure – in the long run, our nationwide curiosity has to come back first, which suggests all choices are on the desk.”

Carmakers assembly

Some 16.9 per cent of UK automotive exports have been to the US final yr, representing a complete of greater than 101,000 models value £7.6bn.

Business minister Sarah Jones held a digital assembly with automotive business leaders to debate tariffs on Friday.

A authorities spokesperson mentioned the minister listened to the attendees’ views on commerce with the US, they usually expressed their help for the federal government’s strategy.

They added that the US is an “indispensable ally and one in all our closest buying and selling companions, with £1.2 trillion invested in one another’s economies”.

The import tax on vehicles is on high of a collection of reciprocal tariffs set to come back into impact on April 2, which might embrace a normal 20 per cent levy on UK merchandise in response to the VAT price.

Sir Keir’s reluctance to hit again with the specter of reciprocal tariffs is pushed by fears of the financial hurt a commerce warfare would trigger.

‘Harmful commerce warfare’

The price range watchdog warned a full-blown tariff warfare with the US might wipe one per cent off gross home product subsequent yr and derail Chancellor Rachel Reeves’ hopes of balancing the books, forcing her to implement extra cuts or tax hikes.

That “worst-case state of affairs” would come about if Trump imposed 20 per cent tariffs on British items and the UK reciprocated in variety.

It comes as shares in UK luxurious carmaker Aston Martin dropped by six per cent when inventory markets opened on Thursday morning. Jaguar Land Rover might be one of many UK car producers most affected by tariffs, with some 22 per cent of gross sales final yr to the US.

Mike Hawes, chief govt of business physique the Society of Motor Producers and Merchants (SMMT), mentioned the announcement of tariffs was “not shocking however, nonetheless, disappointing” and he urged each governments to strike a deal that avoids additional injury.

Lib Dem Treasury spokeswoman Daisy Cooper referred to as for the UK to be able to hit again, arguing: “Our automotive business is being left on the mercy of Trump and his harmful commerce warfare.”