US import tariffs threaten 25,000 automotive jobs
US import tariffs imposed by President Donald Trump could cost up to 25,000 automotive jobs in the UK, according to new analysis carried out by the Institute for Public Policy Research (IPPR).
President Trump has now introduced 25% tariffs on all vehicles imported to the US, with further tariffs on automotive parts launched on 3 May.
The Society of Motor Manufacturers and Traders found that nearly 17% of UK car exports went to the US last year, representing a total of £7.6bn. This makes the US the second largest export market behind the European Union.
SMMT chief executive Mike Hawes said: “The announced imposition of a 10% tariff on all UK products exported to the US, whilst less than other major economies, is another deeply disappointing and potentially damaging measure. Our cars were already set to attract a punitive 25% tariff overnight and other automotive products are now set to be impacted immediately.
“While we hope a deal between the UK and US can still be negotiated, this is yet another challenge to a sector already facing multiple headwinds.
“These tariff costs cannot be absorbed by manufacturers, thus hitting US consumers who may face additional costs and a reduced choice of iconic British brands, whilst UK producers may have to review output in the face of constrained demand.
“Trade discussions must continue at pace, therefore, and we urge all parties to continue to negotiate and deliver solutions which support jobs, consumer demand and economic growth across both sides of the Atlantic.
US import tariffs
Meanwhile, the 25% tariffs could ‘completely destabilise the UK car manufacturing industry,’ said the IPPR, which further warned that Jaguar Land Rover and Mini could be most exposed.
IPPR research fellow Pranesh Narayanan 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.”
The IPPR is now urging the industry to focus on green vehicles to safeguard the industry. Just over a third (35%) of cars manufactured in the UK last year were electric or hybrid models, with 4,938 UK firms involved in the sector employing 263,000 people and recording an annual turnover of £102.1bn.
The IPPR wants the government to encourage consumers ‘buy British and buy green’ by introducing new incentives and reducing trade regulations.
Narayanan said: “As one door closes another one opens. There is huge untapped potential in manufacturing green planes, trains and automobiles and selling them at home and abroad. If the government use the upcoming industrial strategy to drive investment in these sectors, this could be the spark that leads to thousands of new consumers to start buying British and buying green.”
