Trump Tariff Adds £2bn Duty To UK Car Exports
US President Donald Trump has slapped a huge 25% tariff on imports of cars, which may have just penalised the UK automobile industry by £2 billion.
The 25% tariff on cars from all countries worldwide will come into effect as early as next week – April 2nd. The 25% levy will also apply to car parts, but that will not come into force until May.
Trump believes the measures will provide “tremendous growth” for the US car industry, although many analysts do not share his optimism and believe it could ultimately hinder US car production.
The UK is currently placed sixth in the countries that buy cars from US by revenue, sitting behind Mexico, Japan, South Korea, Canada and Germany.
Over 18% of the UK’s car exports currently go to the US, which makes them the largest importer of UK cars. Therefore, the tariffs will be of major concern to the UK car industry, and of course the UK government who have not confirmed whether or not they will be applying retaliatory tariffs.
Cars are also the highest revenue product that the UK exports to the US, accounting for £8.2 billion of trade last year. If we theoretically apply the 25% tariff to the current volume of exports from the UK to the US, then around £2 billion of duty has effectively been added to the cost overnight.
