Donald Trump has announced 25 percent rates on all motor vehicles imports to the United States, in a move that will cause the British economy.
At a press conference in the Oval Office, the US president announced that cars and light trucks imported into the US would be subject to the levy in the latest escalation of the Trump administration’s far-reaching trade war.
“What we’re going to do is a 25% tariff for all cars that are not manufactured in the United States,” Trump said.
The announcement arouses the fear of greater economic pain in the UK, whose largest vehicle export market is the US, with £ 6.4bn in motor vehicles to the United States in 2023, according to the office of national statistics.
This comes after the Office of Budget responsibility halved the UK’s economic growth prediction of 2 percent during a day in which Chancellor Rachel Reeves announced to cut benefits to promote budget and increase defense spending.
Andrew Griffith, the secretary of the shadow trading, calls the announcement ‘regarding’, and adds that British work ‘is now a real risk’.
He told The Telegraph: ‘I’m afraid that labor has dropped the ball here. This government has never laid out a plan, has taken too long to come with Trump around the table, and from now on they have nothing to show for it. ‘
The OBR earlier warned that the rates threatened by Trump could eliminate the mistakes of Ms Reeves in her budget if implemented.
Talks between the UK and the US about the avoidance of tariffs remain constant, while trade secretary Jonathan Reynolds visited Washington last week to discuss an ‘economic agreement’.
But Mr. Reynolds was unable to obtain an exemption for the UK at steel rates that Mr. Trump did not impose earlier in March.
Sir Keir Starmer also spoke directly to the US president about the progress of an economic agreement between the UK and the US.
Media reports have suggested that Britain could lower the tax on digital services – a large technical business levy – to ward off US rates, although it appears that Ms Reeves exclude it on Wednesday.
In its economic forecast published on Wednesday, the OBR said that the ‘serious’ scenario, in which the UK and other countries refuted to the imposition of rates, would be 0.6 percent lower than this year and 1 percent lower.
This scenario would also have the chancellor’s £ 9.9 billion in head space against her fiscal rules “almost” eliminated “, which might force her to implement further cuts or tax increase.
After the announcement, the European Commission said it would judge the tariffs, while Ursula von der Leyen called them “badly to businesses, worse for consumers equally in the US and the European Union”.
Machinery and transport equipment made up almost half of the UK’s goods exports to the US in 2023.
This included £ 6.4 billion in car exports, which made up 18.4 percent of all UK car exports, making the US the largest export partner for cars in the UK.
The cut -off for importing auto parts is intended to be a lifeline for the US automotive industry.
“What we’re going to do is a 25 percent rates on all cars that are not taken in the United States,” Trump said while announcing the measures in the Oval Office. “It will still encourage growth.
“I think our car business will thrive as if it has never flourished before.”
In the coming days, the US is expected to introduce further measures directed at the import of computer chips, pharmaceutical medicine, copper and wood, plans that the president repeated during his event on Wednesday afternoon.
Mike Hawes, CEO of Car Manufacturers and Traders (SMMT), said the announcement ‘is not surprising, but nevertheless disappointing’.
He added: ‘The British and US automotive industries have a long -standing and productive relationship, with US consumers enjoying vehicles built in Britain by some iconic brands, while thousands of British motorists buy cars manufactured in America.
“Rather than imposing additional rates, we need to explore ways in which opportunities for both British and American manufacturers can be created as part of a mutually beneficial relationship, which benefits consumers and create work and growth in the Atlantic. The industry insists that both sides come together to get together immediately and bring about an agreement that works for everyone.”
