No Government deal to avoid US tariffs on UK automotive

The Government now expects UK automotive to be hit by tariffs on imports to the US on Wednesday, after failing to secure a deal.

New import taxes of 25% on cars and car parts entering the US were announced by President Donald Trump last week.  

The tariffs will come into effect from Wednesday (April 2), with charges on businesses importing vehicles starting the next day. Charges on parts are expected to start in May.

President Trump and Prime Minister Sir Kier Starmer spoke on the phone on Sunday (March 30), with Downing Street describing the call as “productive”.

The UK Government had been trying to win a last-minute exemption ahead of Trump's 25% levy.

Secretary of state for business and trade, Jonathan Reynolds, said: “The UK’s National Interest is in reaching an agreement. 

“We have things available to us that are not available to other countries, and that’s because the existing US-UK trading relationship is a fair and balanced one. 

“The US does not have a significant deficit in trade and manufactured goods, which is so much part of their thinking. It doesn’t have that in relation to the UK, so there are things available to us. 

He told the Today programme on BBC Radio 4 that the Government’s approach of not threatening reciprocal tariffs was not about “sucking up” to anyone. 

“It’s not about, not responding,” he added. “It’s about pursuing our national interest. That is what the Government is doing, whilst there is the chance of delivering that. I think that is the right approach.”

The PM has previously said he does not want to get into a trade war with the US, but the UK “reserves the right” to introduce reciprocal tariffs on the US if a deal to exempt the UK cannot be reached.

“If they take action tomorrow (Wednesday, April 2), that is not a reason to walk away from the potential to secure an agreement, this is a time for calm heads,” continued Reynolds. 

“This is the time for pursuing our own national interest, to do what British companies, British businesses need us to do, which is to engage and find a way through this. 

“Of course, I would want any announcement tomorrow to exempt the UK that stands to reason and is fairly obvious, but I do believe the work we have done has put the UK in a position to secure that national interest.”

Some eight million cars were imported to the US last year, equating to $240 billion (£185bn) in trade and approximately half of overall sales.

Mexico is the largest supplier of cars to the US, followed by South Korea, Japan, Canada and Germany. 

For the UK, the US is the second largest car export market after the EU.