Trump to soften car tariffs, but it won’t help UK industry

US President Donald Trump is reportedly set to announce a softening of the nation’s widespread tariffs on automotive industry imports to the US, but the changes are unlikely to help brands manufacturing cars in the UK, leading to more uncertainty regarding the future of Britain’s biggest export.

Last month, Trump announced sweeping tariffs of 25 per cent on all foreign automotive imports — including cars and car parts. The unprecedented move sent shockwaves through the industry, with the likes of Jaguar Land Rover (JLR) pausing deliveries to the States and the stock prices of several manufacturers plummeting.

Now, the White House says it plans to ease tariff rules on imports of car parts – primarily due to the fact that almost all major US manufacturers, including Ford, General Motors and Tesla, use parts originating from China. The 25 per cent tariff on the parts themselves will remain, but carmakers will now be reimbursed a defined amount depending on the value of the car the part is being used on.

Carmakers already paying tariffs on imported cars will also be able to dodge other hefty tariffs, such as those paid on imports of steel and aluminium. However, it’s understood that the US won’t reduce tariffs on imports of completed cars – the main problem for firms manufacturing cars here in the UK and importing to the US, especially the likes of JLR, Rolls-Royce, McLaren, MINI and Bentley.

Trump is yet to stand on a podium himself and announce these policies – he’s expected to do so at a rally in Michigan, the home of the US auto industry, marking his first 100 days in office.

The US’ commerce secretary, however, did refer to the plan telling journalists that: “This deal will be a major victory for the president’s trade policy by rewarding companies who are already manufacturing domestically, while providing a runway to manufacturers who have expressed their commitment in investing in America and expanding domestic manufacturing.”

Auto Express has approached the UK’s Society of Motor Manufacturers and Traders for comment, but is yet to receive a response.

In the meantime, the UK government is continuing its efforts to secure an exclusive trade deal with the US in order to relieve the stress that tariffs are already placing on the nation’s car industry. Chancellor Rachel Reeves has already suggested that the UK could lower tariffs on imports of US cars to entice Trump into a deal, saying that she hopes for “tariff and non-tariff barriers [to be] reduced between the UK and the US”.

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