Labour has been urged to introduce new tariffs for Tesla's electric vehicles in the latest swipe towards Elon Musk’s car brand which has seen sales decline massively in recent months.
The taxes were suggested during Prime Minister Questions and came in direct response to the new 25 per cent steel import tariffs introduced by US President Donald Trump.
The motion was raised by the leader of the Liberal Democrats Ed Davey who warned that the impending tariffs on steel could have huge impacts on the British industrial sector.
In retaliation, Davey urged Prime Minister Keir Starmer to consider hiking taxes on Tesla’s exports from the US which have previously benefitted from UK free trade deals.
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Elon Musk's car brand could be hit with sanctions in response to US steel tariffs
PA
Speaking in the Commons, Davey said: "The Government needs to draw up plans for Tesla tariffs to hit Musk where it hurts, if Trump’s administration follows through with their threats to the UK steel industry.
"Sitting back and hoping Trump won’t hurt us just isn’t going to work. The only way we can tackle Trump and Musk is by negotiating from a position of strength and showing that the UK will not be bullied from across the pond."
Davey added that Trump "seems to have forgotten" that it was only 80 years ago that British soldiers fought alongside US and Canadian troops who are now the ones being punished.
"His tariffs against steel and aluminium will hit Canada the hardest and will also hit jobs and the cost of living in our country," he warned.
The added measures of tariffs on Tesla electric vehicles would not only send a clear message to Musk but also signal the end of the car brand's ranking in the UK as the number one EV seller since 2013.
Data from the Society of Motor Manufacturers and Traders found that Tesla saw sales drop almost eight per cent in January compared to the previous year as drivers seek out cheaper alternatives.
Registrations of new vehicles fell even further across Europe, with sales in France down a drastic 63 per cent, a drop of 42 per cent in the Netherlands and a similar 41 per cent fall in Germany.
The drop in sales could be caused by cheaper Chinese electric cars coming into the market, while some have blamed CEO Elon Musk's political affiliation with Donald Trump, his controversial statements on X or even his behaviour at the Presidential inauguration, with claims Musk performed a Nazi salute.
Davey asked the Prime Minister: "So in reminding President Trump who America’s true and longstanding friends and allies really are, will the Prime Minister also prepare a plan for tariffs in return, starting with tariffs on American electric cars?"
According to official reports exports to the US accounted for five per cent of UK steel volumes in 2023 with impending tariffs set to have drastic impacts on the sector.
Starmer explained that the UK and US have a “special relationship” which was formed through the World Wars.
He said: "British steel is an essential part of our heartlands, and we will not abandon our skilled workforce. And it needs a level-headed assessment of the implications, which is what we’re going through at the moment, but we will always put our national interest first, and steel workers first."
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Tesla sales have slumped across Europe with UK registrations dropping almost eight per cent
TESLAFollowing PMQs, the Prime Minister’s official spokesperson said: "The minister for industry, Sarah Jones, met with UK steel companies, unions and UK steel yesterday. The Government has been very clear that British steel is an essential part of our heartlands."
