2 days ago
The SMMT has warned that UK carmakers could be forced to ‘review output in the face of constrained demand’ after Donald Trump confirmed tariffs on vehicles being imported into the US.
Cars from all over the world will be subject to additional 25% charges when enterring the US, in measures confirmed as part of the president’s ‘Liberation Day’ reforms.
According to recent SMMT data, the US is the UK’s second largest export market after the European Union, with some 16.9% of car exports heading over the Atlantic to the states.
That figure represents a total of more than 101,000 units worth an eye-watering £7.6bn.
Now the trade body has issued a robust response to the new charges, with chief executive Mike Hawes describing them as ‘deeply disappointing and potentially damaging’.
A report by think tank the Institute for Public Policy Research published on Wednesday warned more than 25,000 UK car manufacturing jobs could be at risk because of US tariffs.
Researchers warned that employees at Jaguar Land Rover and Mini are ‘some of the most exposed’.
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.’
The new changes come into force with immediate effect, leaving the industry scrambling on how to best respond.
Philipp Sayler von Amende, chief commercial officer at Carwow said that some manufacturers may absorb the additional costs while others may set up production in the US – potentially at the expense of UK jobs.
He said: ‘As expected, President Trump has confirmed a 25% tariff on all cars being imported into the US, including from the UK, creating a significant new challenge for the UK automotive sector.
‘These tariffs add further complexity for car manufacturers and their supply chains as they grapple with how to keep British-made cars price-competitive in the US market.
‘In the short term, some manufacturers may absorb tariff costs to maintain competitive pricing until existing stock clears, while premium brands in high demand are more likely to pass them on to consumers – like Ferrari, which recently announced a 10% US price increase.
‘They might try to avoid paying them entirely – we’re already seeing many European manufacturers accelerate their plans to expand US production to bypass import tariffs, with Volvo, Audi, Mercedes-Benz and Hyundai moving in this direction before today’s decision.
‘The full impact to UK car dealers and car buyers remains uncertain. The tariffs could also drive a renewed focus on European production, marketing and sales efforts – increasing competition and potentially lowering prices in the region.
‘What’s clear is that these tariffs will have far-reaching consequences, from factory workers to retailers and car buyers across the EU.
‘Manufacturers need the confidence to invest, car dealers need access to stock, and consumers deserve choice at a range of prices. The Government must ensure that the UK remains a competitive and attractive market for automotive innovation and growth.’
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The post SMMT hits out at ‘deeply disappointing’ US tariffs which could cost UK jobs appeared first on Car Dealer Magazine.
