UK auto sector faces mixed signals as Trump softens US tariffs on car parts

Alejandro Gonzalez

Wed, Apr 30, 2025, 4:05 AM 3 min read

UK carmakers and dealers are weighing the implications of a partial reprieve from US tariffs aft President Donald Trump signed 2 enforcement orders easing the contiguous load of his 25% duties connected imported car components, the concern property reported.

The alteration allows carmakers with US accumulation facilities to trim import taxation liabilities connected foreign-made parts, utilizing a calculation based connected conveyance income volumes and pricing.

Under the revised rules, manufacturers tin offset tariffs connected imported components equivalent to 3.75% of a vehicle’s Manufacturer’s Suggested Retail Price (MSRP) until April 2026, falling to 2.5% of full US accumulation done April 2027. The 25% tariff connected afloat assembled vehicles imported into the US remains successful place. The regularisation is intended to supply alleviation to businesses for 2 years arsenic they rework their proviso chains, the White House said.

Philipp Sayler von Amende, main commercialized serviceman astatine Carwow, described the argumentation displacement arsenic a “last-minute reprieve” for US-based manufacturers but warned that the broader outgo load connected UK car exports remains. “The bigger contented remains: a 25% tariff inactive applies to cars built overseas, which continues to make unit for UK manufacturers trying to support British-built vehicles price-competitive for US consumers,” helium said.

The Trump medication has positioned the determination arsenic a reward for companies investing successful US manufacturing. European brands, including Volvo, Audi, Mercedes-Benz and Hyundai – respective of which person precocious shifted much accumulation to the US – basal to benefit.

However, UK firms, with less existing US assembly operations, stay much exposed to higher import duties.

Sayler von Amende told reporters that the tariff accommodation was improbable to bring contiguous clarity for UK dealers oregon customers. “The knock-on effects aren’t yet afloat clear,” helium said. “But the past 3 weeks person highlighted conscionable however globally interconnected the car manufacture is… erstwhile fiscal marketplace realities wound and aggravated proviso concatenation unit and fierce firm lobbying converge, they tin outweigh the headlines of governmental theatre.”

The tariff strategy, initially unveiled to propulsion carmakers to reshore accumulation to the US, had drawn dense disapproval from crossed the North American automotive sector. Industry leaders had lobbied intensively for a rollback, informing of superior disruption to an integrated accumulation web that spans the US, Canada and Mexico.

Trump, speaking up of a sojourn to Michigan, acknowledged the partial concession was aimed astatine avoiding near-term proviso disruption. “If they can’t get parts, we didn’t privation to penalise them,” helium said. “We conscionable wanted to assistance them.”