Donald Trump’s return to the White House and his promised tariffs on imports pose a significant threat to the UK’s car industry, which exports about 10% of its vehicles to the United States. The new US president has also signalled the removal of subsidies for electric vehicle (EV) production and a rollback of emissions regulations, which could reshape global car markets.
UK luxury carmakers such as Jaguar Land Rover, Rolls-Royce and Bentley may be better placed to withstand tariffs. Analysts note that these brands produce high-end vehicles often costing over £100,000, allowing them to pass on tariff costs to wealthy customers without significantly denting sales.
Some in the UK industry hope Brexit could provide a silver lining if the US limits tariffs to the European Union rather than Britain. However, the majority of UK car exports still go to the EU, so any trade disruption would be unwelcome.
Trump’s EV policies, including scrapping purchase subsidies and relaxing fuel economy standards, are likely to slow US electric vehicle adoption. This could hurt American automakers like General Motors and Ford, which have already invested heavily in EV technology, while Tesla may gain from reduced competition and its all-electric lineup.
European carmakers such as Volkswagen and Stellantis are most exposed to US tariffs due to their reliance on imports from Europe and Mexico. Volkswagen has warned that tariffs would have a ‘harmful economic impact’ on consumers and the global industry.
