Minister meets with automotive leaders to discuss US car tariff

Industry minister Sarah Jones has met with automotive industry leaders to discuss the impact of US President Donald Trump’s decision to slap a 25% import tax on cars.

A Government spokesperson said at a roundtable meeting on Friday she listened to their views on trade with the US and reiterated that the Government is seeking a solution.

Attendees expressed their support for the Government’s approach and engagement with the US administration, the spokesperson added.

The tariff on vehicles imported to the US will come into effect on April 2 in a blow to the UK automotive industry.

The US is the second largest export market after the European Union for cars built in the UK.

Some 16.9% of UK car exports were to the US last year, representing a total of more than 101,000 units worth £7.6 billion.

Sir Keir Starmer said on Thursday that the tariff announcement is “very concerning” but the UK will not be “jumping into a trade war” with America.

A Treasury minister suggested the UK has to take a “different approach” to other countries when it comes to negotiating tariffs with the US.

Chief Secretary to the Treasury Darren Jones told BBC’s Question Time: “These are complicated issues, but we think we’re providing the right type of leadership in negotiating with the Americans.”

The import tax on cars is on top of a series of reciprocal tariffs set to come into effect on April 2, which could include a general 20% levy on UK products in response to the rate of VAT.

Sir Keir’s reluctance to hit back with the threat of reciprocal tariffs is driven by fears of the economic harm a trade war would cause.

In its assessment of the UK economy, the budget watchdog warned a full-blown tariff war with the US could wipe 1% off gross domestic product next year and derail Chancellor Rachel Reeves’ hopes of balancing the books, forcing her to implement more cuts or tax hikes.

That “worst-case scenario” would come about if Mr Trump imposed 20% tariffs on British goods and the UK reciprocated in kind.

A Government spokesperson said: “We’re disappointed by the US decision to impose global tariffs on the auto industry and know this will be extremely concerning for businesses and consumers.

“But the US is an indispensable ally and one of our closest trading partners, with £1.2 trillion invested in each other’s economies.

“Our approach to the US is pragmatic, we keep all options on the table, and we continue to have productive discussions on securing a wider economic deal.”