Donald Trump’s proposed 25% tariffs on car imports to the US could significantly impact the UK automotive sector, putting more than 25,000 jobs at risk. According to the Institute for Public Policy Research (IPPR), the tariffs, which are expected to be confirmed soon, could destabilise the UK’s car manufacturing industry, especially threatening workers at key manufacturers such as Jaguar Land Rover and Mini.
The planned tariffs have raised alarms within the UK automotive industry, which depends heavily on exports to the US, the second-largest market for British-made cars. As the UK car sector braces for potential economic turbulence, experts argue that the country may need to focus on green transport manufacturing to mitigate the impact.
The Threat to UK Automotive Jobs
The US has long been a significant market for UK-built cars, with 16.9% of UK car exports directed to the US last year, accounting for over £7.6 billion in sales. However, the proposed 25% tariff would make British cars more expensive and less competitive in the American market, potentially reducing exports and leading to job cuts.
Research from the IPPR warns that manufacturers like Jaguar Land Rover and the Cowley Mini factory are among the most vulnerable, as they rely on the US for a substantial portion of their production. According to IPPR research fellow Pranesh Narayanan, such tariffs could “completely destabilise the UK car manufacturing industry,” endangering tens of thousands of jobs.
The potential fallout is serious. As well as risking significant job losses, the tariffs could undermine the government’s economic growth plans. The UK’s automotive sector, which already faces challenges due to global shifts in consumer preferences, could struggle to recover if these tariffs come into effect.
A Shift Towards Green Transport Manufacturing
Amid this uncertainty, the IPPR suggests the UK can still leverage its strong position in green transport manufacturing. With global sales of electric vehicles (EVs) increasing sharply—740% between 2018 and 2022—the UK is well-positioned to capitalise on this transition.
In 2024, over 35% of vehicles made in the UK were electric or hybrid, and these numbers are likely to grow as the world moves toward a net-zero future. The IPPR recommends that the UK government refocus its efforts on developing a competitive edge in zero-emission transport products, both for domestic use and export.
The think tank highlights the existing capacity within the UK’s automotive sector to pivot toward greener technologies, providing a potential buffer against the economic fallout from the tariffs.
By supporting the green transition through policy incentives, such as grants for low-income electric car buyers and incentives for UK-made electric vehicles, the government could mitigate job losses and position the UK as a leader in green transport manufacturing.
