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The UK car manufacturing industry could face severe disruption, with more than 25,000 jobs at risk if Donald Trump proceeds with his proposed import tariffs, according to a warning from the Institute for Public Policy Research (IPPR). The US president is expected to introduce a 25% tariff on imported cars and car parts, a move that could have a major impact on UK manufacturers. The United States is the second-largest market for UK-made cars, following the European Union.
Research from the IPPR highlights that workers at companies like Jaguar Land Rover and Mini would be among the most vulnerable. Last year, the UK exported 101,000 vehicles to the US, accounting for 16.9% of total car exports and generating £7.6 billion in revenue.
To counter these challenges, the think tank recommends that the UK take advantage of the shift toward net-zero emissions and strengthen its expertise in producing sustainable transport options, such as electric vehicles, trains, and aircraft. The IPPR argues that the best way to protect jobs in the sector is to enhance the country’s competitiveness in developing low- or zero-emission vehicles.
The organization suggests that the government should use its forthcoming industrial strategy to boost demand for these products by offering incentives for domestically produced electric cars, lowering VAT on public charging, and providing financial assistance to low-income buyers.
IPPR research fellow Pranesh Narayanan emphasized the potential risks, stating that Trump’s tariffs could significantly destabilize the UK’s car manufacturing sector, putting thousands of jobs and economic growth plans at risk. However, he also pointed to new opportunities, stressing that investing in the green transport industry could help drive demand both domestically and internationally. He urged the government to use its industrial strategy to encourage investment in these sectors, which could ultimately lead to more consumers choosing British-made, environmentally friendly vehicles.
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