UK carmakers to meet ministers as US tariff deadline looms

UK carmakers are due to hold talks with ministers today to discuss their response to US President Donald Trump’s decision to impose 25% tariffs on car imports, the BBC reports.

The UK government is seeking exemptions from a broad range of US import levies set to take effect at midnight on 3 April.

However, some car manufacturers believe it is now too late to halt the measure and instead want to focus on securing government support to mitigate its impact.

The tariffs could have significant consequences for the UK economy. The Office for Budget Responsibility (OBR) has warned that, in a worst-case scenario, trade taxes could shrink economic growth by 1% and erase Rachel Reeves’s £9.9bn fiscal buffer against her debt rules.

Despite the looming deadline, government sources insist there is "still all to play for" in negotiations.

The UK’s stance contrasts with Germany’s, which has vowed not to back down and has urged Europe to "respond firmly" to the tariffs.

In its Spring Statement report on Wednesday, the OBR warned that escalating global trade disputes, including a hypothetical 20-percentage-point rise in tariffs between the US and other major economies, could shave 1% off UK economic growth.

Such a downturn, the OBR cautioned, would effectively eliminate the government’s projected fiscal headroom by 2029-30, reducing it "to almost zero."

Meanwhile, Ineos Automotive has reiterated its frustration over the European Union’s failure to engage meaningfully with the US on the impending  tariffs, warning of severe consequences for the industry.

Lynn Calder, CEO of Ineos Automotive, said: "This is what happens when politicians sit on their hands. As a growing EU-based automobile brand, we are vulnerable to tariffs, and we need our politicians to support our business, our jobs, and our economies. We need urgent and direct political intervention on tariffs."

Calling for immediate diplomatic efforts to prevent long-term damage to European manufacturing, she added: "We will give whatever support we can to our political leaders to keep the playing field even for small, competitive brands such as Grenadier. But we must see action from EU politicians: only they are in a position to address the issue. Fortunately, we have been planning for tariffs, but there is only so much we can do to protect US customers from price rises."

UK consumers are already signalling their discontent with the tariff according to this month’s Startline Used Car Tracker, with nearly six in ten people (59%) reported as being less likely to purchase a car manufactured in a country that imposes tariffs on UK-made vehicles.

A substantial 32% of respondents believe that this is an effective way to push back against trade restrictions, while 16% explicitly state that their motivation is to support UK manufacturers.

However, some 15% of respondents doubt that individual purchasing decisions would have any meaningful impact on tariff policies, while 14% believe that UK car sales will not be significantly affected by these trade disputes.

Paul Burgess, CEO at Startline Motor Finance, commenting on the findings, noted:“The country most likely to impose tariffs is the US, and the reality is that UK consumers already purchase very few US-made vehicles. Despite concerted efforts by major manufacturers over the years to penetrate the UK market, American cars simply do not align with the needs or preferences of most UK buyers. So, while the sentiment against tariffs is strong, the practical impact of a boycott may be limited.”