With hopes dwindling for a deal with US President Trump on American tariffs, British automotive companies are seeking government support. The BBC understands that several companies met with Industry Minister Sarah Jones on Friday morning to discuss plans to cope with the 25% tariffs on US car imports due to take effect next week. These companies are eager to find solutions to mitigate the impact of the tariffs.

Read Also...:

The Bottom Line - Decisions That Made Me: Julian Metcalfe (Itsu and Pret A Manger) - BBC Sounds

03-31, 2025

Free Thinking - The Middle Classes

03-31, 2025

The people who turned public toilets into homes and businesses

03-31, 2025

Why are Morrisons and Sainsbury's cafes closing?

03-31, 2025

The UK government is trying to negotiate exemptions for a range of US import tariffs due to come into effect at midnight on April 3rd. However, some car companies believe it is now too late to delay the measure and instead want to discuss support packages. Sources say that at an online meeting with a "high attendance," car companies outlined the challenges they face, saying the tariffs are an added burden on top of other pressures such as Zero Emission Vehicle (ZEV) mandates. The automotive industry is facing significant headwinds and needs government assistance.

The BBC understands that there was a general consensus among attendees that the government should do everything it can to reach an agreement. But the government is currently in "listening mode" and has not offered any response. One source said there was also no indication that the UK would be able to reach a deal with the US on tariffs before they are implemented next week. The lack of a clear government response is causing concern among industry leaders.

The US tariffs could have a huge impact on the UK economy. The government's official forecasting body estimates that, in the worst-case scenario, the tariffs could reduce economic growth by 1% and wipe out Chancellor Rachel Reeves' £9.9bn of fiscal headroom under her debt rules. Government sources say "everything is still possible" in negotiations ahead of the imposition of 25% tariffs on US car imports next week. The potential economic consequences are significant and could impact the UK's financial stability.

The UK has said it will not be "drawn into a trade war with the US." Treasury Minister Darren Jones said the UK must take a "different approach" to other countries when negotiating with the US on tariffs. Jones said there are "no easy answers" and there are "complex issues" to discuss. The government has stated it is "disappointed" by the US decision to impose car tariffs, but also that the US is an "indispensable ally" and the UK is taking a "pragmatic" approach to import tariffs. This pragmatic approach aims to maintain a strong relationship with the US while addressing trade concerns.

The UK's reaction contrasts with other countries, such as Germany, which has said it "will not give in" and urged Europe to "respond decisively to the tariffs." France and Canada have vowed trade retaliation against the US, with Canada's new Prime Minister Mark Carney (former Governor of the Bank of England) saying his country will "fight" and adding that the long-standing relationship between Canada and the US is "over." The differing responses highlight the complex international dynamics surrounding the US tariffs.

After Trump announced the tariffs, the share prices of car companies around the world, including US carmakers such as General Motors, Ford, and even Tesla, owned by prominent Trump ally Elon Musk, fell sharply. Russ Mould, investment director at AJ Bell, said the imposition of tariffs comes at a "very difficult time for the sector," with UK car production down 12% in February compared to the same period last year. "Consumer confidence is on the edge, and we know it's a competitive market, and even electric vehicle sales may not be living up to expectations." The tariffs are adding to the existing challenges faced by the automotive industry.

Start-up car manufacturer Ineos Automotive told the BBC that the tariffs are a "major threat" because the US is its biggest market, while its manufacturing base is in the European Union (EU). Ineos CEO Lynn Calder said she was "very frustrated" that EU politicians were "standing by" and "not getting around the table with Trump." "Trump has been talking about reciprocal tariffs since the beginning of the year," she said. "There is a deal to be done here, there is a win-win to be had." She added: "I think where we are now is the EU deciding whether they need a car industry or not." The situation highlights the potential impact of the tariffs on businesses with international operations.

Trump is using powers designed to avoid national security threats to impose the tariffs. The first wave of car tariffs will take effect on April 3rd, with import tariffs on car parts following a month later. Cars are the UK's biggest export to the US, with 101,000 vehicles exported last year, worth £9bn. The industry is likely to ask the UK government for a support package to cope with the disruption. The potential disruption to trade could have a significant impact on the UK economy.

The government is already consulting on changing the Zero Emission Vehicle mandate, which could ultimately penalize UK manufacturers and subsidize importers such as Tesla, controlled by prominent Trump ally Elon Musk. The mandate sets the percentage of new zero-emission cars and vans that manufacturers must sell each year up to 2030. Reeves told the BBC that Tesla gets some funding from the ZEV mandate. Any adjustment to the mandate could help UK exporters but would be detrimental to Tesla, which specifically wrote to the new government last July asking them not to change it. The potential changes to the ZEV mandate could have significant implications for the automotive industry.

Only a handful of ministers and officials know what the UK is negotiating with the US government, and it is believed the talks cover the entire tariff package, not just the car industry. While some progress has been made, one negotiator said everything will depend on Trump. Earlier this week, he insisted he would not offer exemptions for car imports, but he is expected to agree to a wider package of so-called "reciprocal tariffs" globally next week. The outcome of the negotiations remains uncertain and depends heavily on President Trump's decisions.