Rishi Sunak MP opens Browns of Richmond . Photograph: Stuart Boulton.
President Trump’s move to impose a 25% tariff on all imported cars and car parts marks a serious escalation in the global trade war – and it’s already rattling markets, with over €13bn wiped off the value of European carmakers within hours of the announcement.
But the consequences won’t stop at the stock exchange. The fallout will hit global supply chains, threaten investment, and cast a long shadow over the UK’s vital automotive sector – ICE and EV alike.
Let’s be clear: this isn’t targeted at China or a niche sector. It’s a broadside against the entire global auto industry. Imports from key US ‘allies’ like Germany, Japan, Canada, and the UK are all in the firing line. Even brands that manufacture in the US, including American giants like GM and Ford, rely heavily on international supply chains, especially for parts. These tariffs will add cost and complexity at every level.
For the UK, the stakes are high. The US is the single largest export market for British-made cars, accounting for £6.4bn in 2023 – nearly a fifth of total UK car exports. Manufacturers like Jaguar Land Rover, Aston Martin, and Rolls-Royce are directly exposed, and Aston Martin’s share price alone fell nearly 9% following the announcement.
Despite this, the UK government has opted not to retaliate, at least for now, choosing to preserve momentum in ongoing trade talks with the US. Chancellor Rachel Reeves has rightly condemned the move as damaging protectionism, but without a clear route to exemption or mitigation, UK-based manufacturers are left in a precarious position.
Trump’s rationale is predictably nationalistic – “liberation day” and talk of bringing back jobs – but this isn’t 1970s Detroit. Today’s car industry is global by design. Vehicles aren’t just assembled in one country; they’re born from parts and expertise spanning continents. That’s true whether you’re talking about electric drivetrains or traditional combustion engines. Tariffs like these disrupt that finely tuned ecosystem, adding friction, reducing efficiency, and ultimately raising prices for consumers.
Even Elon Musk, one of Trump’s corporate allies, admitted the tariffs would be “significant” for Tesla. And while Trump points to planned investment like Hyundai’s $5.8bn steel plant in Louisiana as proof that tariffs drive jobs, those gains won’t be immediate and may not offset the broader damage.
For the UK, the long-term concern is twofold. First, there’s the immediate risk of reduced export competitiveness.
A 25% price hike will make UK-made cars far less attractive in the American market, particularly as inflation continues to squeeze US consumers.
Second, there’s the potential chilling effect on investment. If the US becomes unpredictable and protectionist, international firms may think twice about anchoring supply chains or new projects in the UK if it puts them at a disadvantage.
This is especially critical for the EV transition. As we move toward electrification, industry players are rethinking where to invest in gigafactories, R&D hubs, and component manufacturing. Uncertainty, whether in the form of tariffs or erratic trade policy, risks derailing that momentum.
The automotive industry thrives on scale, predictability, and open trade. Trump’s tariffs undermine all three. If the UK and US are serious about a modern industrial partnership, they must find common ground. As Mike Hawes of the SMMT rightly put it: “We should explore ways in which opportunities for both British and American manufacturers can be created.”
Right now, Trump’s move looks less like an economic strategy and more like a political gamble – with thousands of jobs, billions in trade, and the future of transatlantic manufacturing caught in the crossfire.
Fraser Brown is founder and managing director of MotorVise
