Experts have warned that the automotive industry could be hammered if President Donald Trump is to introduce tariffs impacting goods imported from the UK and European Union.
In the first two weeks of being in office, President Donald Trump has been busy introducing new legislation to crack down on unfair business practices with hefty tariffs.
He confirmed tariffs of 25 per cent additional tariff on imports from Canada and Mexico, and a 10 per cent tariff on imports from China.
Experts have warned that this could cause havoc for the global price of goods, especially with the automotive market given the constant flow of vehicles around the world.
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Donald Trump has threatened the UK and EU with tariffs which could impact the automotive sector
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Most recently, the 47th President told reporters on Sunday evening that the UK was "way out of line" and "we'll see how things work out" regarding tariffs.
He added: "It might happen with them (the UK), but it will definitely happen with the European Union, I can tell you that.
"We'll see ... but the European Union is really out of line. The UK is out of line, but I think that one can be worked out. But the European Union is an atrocity, what they've done."
In response to the threat from Trump, global markets have responded with uncertainty as some analysts reported that tariffs could result in the car industry dealing with an extra $43billion (£34.7billion) in costs.
Barclays reported that motor vehicles account for 31 per cent of the value of US imports from Mexico and 14 per cent of those from Canada, potentially having a hammer blow on the market.
Around 17 per cent of all cars manufacturers in the UK last year were exported to the United States
PAWith Trump now threatening tariffs against the UK and European Union, the established Western car market could be plunged into chaos, with consumers potentially bearing the brunt of the extra costs.
Dan Caesar, CEO of Electric Vehicles UK, told GB News: "Predicting what will happen to global automotive as a result of Trump's tariffs seems to indicate that the US, Japan, Korea and Germany stand to lose the most.
"The Chinese on the other hand are already 'locked out' of the US market and have little to lose.
"It's even possible that their overcapacity could cause China to look to more stable markets like the UK - Europe's biggest battery EV market - and this could in turn accelerate more affordable options here."
Volkswagen said it was assessing the impact of the tariffs on Mexico, Canada and China, saying it was relying on "constructive talks between trading partners".
Dan Caesar suggested US tariffs could prompt Chinese manufacturers to offer cheaper prices for their vehicles
REUTERSHowever, these plans could be thrown into chaos if President Trump were to launch additional charges on the EU and UK. Retaliatory tariffs could lead to even more uncertainty in the car market.
According to data from the Society of Motor Manufacturers and Traders, eight in 10 cars made in the UK are exported, with 16.9 per cent being sent to the United States, falling only behind the EU (54 per cent).
In total, almost 780,000 cars were built in the UK last year, although car exports were down a significant 15.5 per cent. More than 603,000 UK-made vehicles were shipped worldwide.
Speaking to GB News, Ginny Buckley, chief executive of Electrifying.com, said Trump's tariffs on European imports could have "far-reaching consequences beyond the US".
She added: "Brands like Mercedes-Benz, Volkswagen, and BMW - hugely popular with American buyers - will be looking to recoup their losses, which could ultimately mean higher prices for UK car buyers.
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Canada has responded sternly to tariffs imposed by US President Donald Trump
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"With European car stocks already taking a hit this morning, further price hikes may well be just around the corner."
A spokesperson for Downing Street described the trading relationship between the UK and the US as "fair and balanced" with a "really constructive" set of conversations between President Trump and Prime Minister Keir Starmer in the days following the billionaire's inauguration.
Speaking on the topic of tariffs on Chinese car brands, former Transport Secretary Mark Harper said the Government would continue to monitor the situation after the US, EU and Canada imposed tariffs in 2024.
It is unclear whether the UK is considering tariffs on the United States, a Department for Transport spokesperson told GB News: "We are always vigilant to international developments and are very clear that any decision over the implementation of tariffs has to be the right one for our domestic automotive industry."
