Tariffs of 25% on all foreign-made new cars imported into the US, including from the UK, went live overnight on 2 April after an announcement by US president Donald Trump.
An identical levy on car parts will begin in the coming months.
The news has come as a blow to UK car makers after “intense negotiations” between government officials from both nations failed to overturn or even lower the levy before the deadline.
Trade body the Society of Motor Manufacturers and Traders (SMMT) called the decision "another challenge" for a sector facing headwinds, adding that the cost "cannot be absorbed by manufacturers" so US buyers will be left to pick up the bill.
In addition, president Trump announced a 10% levy for all UK-made goods (the "minimum baseline"), which the SMMT called a "disappointing and potentially damaging measure" because it will impact other automotive products, it says.
Confirming the tariffs during a presentation at the Oval Office on 1 April, on what he has dubbed "Liberation Day", Trump said the decision was made because of the imbalance of US-made car sales in other markets, which has "decimated" US industries. "Ford sells very little" outside of the US, he claimed.
He noted that the new levy will allow for a better market for US-made cars and pointed to South Korea, where 80% of domestic-made cars are sold, and to Japan, where more than 90% of Japanese-made cars are sold.
Trump previously claimed that while the tariffs are bad news for companies that export foreign-built vehicles to the US, the move would lead to "tremendous growth" for the US automotive industry, adding that it would create more investment for US-based car makers and therefore more jobs.
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A 25% tariff on imports of cars from the UK would be pretty devastating for the UK motor industry, especially for JLR and Mini. I can well appreciate that tariffs between countries should be equalised, especially if there is an imbalance in trade but Trump is being unnecessarily aggressive raising them from 2.5% to 25%. As I understand it we currently apply 3.5% import duties on cars from the US and 10% on trucks so an increase to 25% is unwarrented. Yes, we do export more cars than we import but our visible (and invisible) trade with the US is largely in balance - unlike with the EU. A broad brush approach will not help the US. BMW's biggest plant in the world is their facility at Spartanberg which is their sole factory for producing the X4, X5, X6 X7, XM and most X3's which are exported around the world, notably Europe so to avoid retaliatory tariffs you can see BMW moving production out of the US. 25% tariffs would be the death nell of Mini Cooper sales in the US and probably the rest of the world after the current generation, No wonder BMW have put their investment in Plant Oxford on hold. Somehow I don't expect (or hope) that King Charles will be driving Trump as a passenger in his Range Rover as the late Duke of Edinburgh did when the Obama's came on their State Visit. In fact the threat of cancellation of another State Visit is possibly our only hope of a reprieve.
There's only one thing I agreed with Trumpski during his 1st term and that was the inequality in tarriffs. As I understood it, we were charging higher import duties for American build cars than America paid to import ours. That was clearly wrong.
What's happened now ( or rather what's being proposed, as Trump has history of changing his mind ) is the tables have been turned, and we're having a piece of our own medicine.
So what's wrong with creating a level playing field? It's not as if it's going to benefit the USA any as their cars are 5hite anyway. The odd BMW gets built there, what else? Tesla ( or does ours come from the EU ? ).
The EU are in no position to complain. And I sincerely hope none of you remainers are complaining either? To protect their own home bred manufacturers, the EU just slapped increased import duties on Chinese cars! Talk about the pot calling the kettle black. Because we're no longer part of the EU, the UK were able to set our own duties on import fees and they remained the same, we haven't altered import duties from China.
It's a crazy old world. I know little about agreements between Canada, Mexico and the USA but as far as the this side of the pond is concerned, I kinda agree with Trump, but heavens above, I'd have been a bit more diplomatic about creating a level playing field.
Great negotiator? Only in his mind. He's nothing more than a glorified double glazing salesman.
How to solve it? Two solutions..
1: Create immediate turmoil. Trump proposing to impose import of car parts. Well why doesn't Canada Mexico etc just stop exporting them right now? Without parts, USA car manufacturing would grind to a halt. We don't need Canadian wood? OK then, stop wood exports tomorrow. We don't need Canadian steel and oil imports? OK, stop exporting steel and oil to the USA tomorrow. Lets see how the USA manages without them.
The reason USA builds imports cars and wood and steel is because it's cheaper. Produce it themselves and the USA has to invest in infrastructure and more expensive labour so obviously prices will increase for the American consumer.
And 2:
Sack every male world leader and replace them with women. Removing male ego's would go a long way to creating better relationships, becasue what all of this boils down to is, my peni5 is bigger than yours.
I enjoyed reading your piece but your summing up in the last paragraph was a let down.
He has a point though. Way too many men-children in positions of power, so let's give the ladies more opportunities. God knows the men have been at it for thousands of years and spectacularly mucking it up more than half the time.
Now if only Trump was consistent about the whole eye for an eye tariff that he's touting. I mean, Japan has zero percent tariff on all automobiles and *they* get the same 25% now (the current 2.5% was unfair enough). And then there's the NAFTA/USMCA countries...
No mention of the fact that currently cars coming from America pay more import tax than cars going the other way. I am not in favour of any tariffs, but i think Trump is getting the point over. As for suggesting American cars are too big for the UK, this hasnt stopped Tesla often being the No1 best selling car in the UK. But the European high fuel tax has cleared disadvanted US cars until Tesla came along. I dont think Trump can do anything to help the rest of us with that one