Trade war: UK car exports to US halved in May ahead of truce

Sky News

4 hours ago

The extent of the harm inflicted on UK car exporters from US tariffs has been revealed, with shipments plunging by more than half last month according to industry figures.
The Society of Motor Manufacturers and Traders (SMMT) said the number of UK-made cars heading across the Atlantic fell 55.4% during May following a decline of just under 3% the previous month.
The dramatic slowdown marked a reaction to the 25% tariffs imposed on imports by the Trump administration from 3 April amid the president's "liberation day" trade war escalation which sparked chaos in global supply chains.
The move prompted Jaguar Land Rover - the biggest exporter of cars to the US from these shores - to suspend all shipments temporarily.
2:53
The US is the most important market for UK producers, in value terms, and was worth £9bn last year with the vast majority of those sales coming from luxury brands also including Bentley, Rolls-Royce Motor Cars and Aston Martin.
Tariffs on UK-made cars imported into the US have since been reduced from 25% to 10% for up to 100,000 vehicles on an annual basis.
That was signed off by the president 10 days ago.
While it spares UK producers from the worst, the US trade war does not represent the only challenge.
2:02
The industry has been crying out for help to bolster its competitiveness and increase demand for new electric vehicles amid lacklustre interest, not just at home, but abroad too.
It has welcomed promised help with punitive energy costs through the government's industrial strategy.
Wider SMMT figures showed car and commercial vehicle production fell for the fifth consecutive month in May.
It reported a 33% decline to just 49,810 vehicles and said it was the worst performance for May, when the COVID years were excluded, since 1949.
The industry body blamed continuing model changeovers, along with the impact of US tariffs.
The number of vehicles produced for the domestic market fell while shipments to the EU, which generally accounts for the biggest share of volumes, was down by 22.5%.
Mike Hawes, the SMMT's chief executive, said: "While 2025 has proved to be an incredibly challenging year for UK automotive production, there is the beginning of some optimism for the future.
"Confirmed trade deals with crucial markets, especially the US and a more positive relationship with the EU, as well as government strategies on industry and trade that recognise the critical role the sector plays in driving economic growth, should help recovery.
"With rapid implementation, particularly on the energy costs constraining our competitiveness, the UK can deliver the jobs, growth and decarbonisation that is desperately needed."