UK not ‘leaping into commerce conflict’ with US, says Sir Keir Starmer | EUROtoday

The UK won’t be “jumping into a trade war” with the US over Donald Trump’s plans to position 25% import taxes on vehicles coming into America, the prime minister has mentioned.

The authorities is attempting to keep away from tariffs, set to come back into impact on 2 April, by “intense negotiations” with US counterparts, Sir Keir Starmer added.

The PM’s feedback come amid considerations tariffs may upend international motor commerce and provide chains, with one of many greatest UK-based exporters to the US, Jaguar Land Rover (JLR), in line to be the one of many producers most affected.

Trump has argued the measures will result in “tremendous growth” for the automotive trade, promising it could spur jobs and funding within the US.

But Sir Keir mentioned the tariffs had been “very concerning”, including that the federal government could be “pragmatic and clear-eyed” in its response.

“The industry does not want a trade war, but it’s important that we keep all options on the table,” he added.

UK automotive exports are price about £7.6bn per 12 months, and the US is the second largest marketplace for UK vehicles after the European Union, in response to automotive trade physique the Society of Motor Manufacturers and Traders (SMMT).

There are about 198,000 individuals immediately employed within the UK automotive trade, and it helps about 813,000 jobs within the wider financial system, it mentioned.

All of the foremost automotive makers within the UK have overseas house owners.

JLR, which is owned by Indian conglomerate Tata Motors, mentioned the corporate was “waiting for further information” on the tariffs.

Meanwhile, the founding father of automotive elements agency Unipart mentioned the tariffs would push individuals around the globe in direction of shopping for Chinese-made vehicles.

The Trump administration plans to impose 25% taxes on imports of vehicles from 2 April. Taxes on elements are set to begin in May or later.

The newest transfer threatens to widen the worldwide commerce conflict and is a part of the president’s drive to guard American companies and increase manufacturing inside the US.

Tariffs are taxes charged on items imported from different international locations. Those prices may then be handed onto shoppers by larger costs, encouraging Americans to modify to US-built autos.

It may additionally drive corporations to fabricate and put money into the US. “If you build your car in the United States there is no tariff,” Trump has mentioned.

But the method has been questioned by numerous economists, who argue it is going to push up inflation.

In the UK, the SMMT mentioned the announcement of the tariffs by Trump on Wednesday had been “not surprising but, nevertheless, disappointing” however referred to as on each governments to strike a deal.

Its chief govt, Mike Hawes, mentioned the “UK and US auto industries have a long-standing and productive relationship, with US consumers enjoying vehicles built in Britain by some iconic brands, while thousands of UK motorists buy cars made in America”.

The UK authorities is in talks with the US administration and stays hopeful of a commerce deal earlier than tariffs come into drive, the BBC understands.

John Neill, the founding father of Unipart and the agency’s former govt chairman, mentioned the Trump tariffs had been “a gift to the Chinese car industry”, as a result of worldwide shoppers would reply to a commerce conflict by shopping for Chinese options.

He added the tariffs may have “unintended consequences”.

“The Americans may think they’re boxing the world car industry out of the US, but the reality is they are going to box the US car industry out of the world,” he mentioned.

JLR is the probably the most uncovered UK-based automotive agency to Trump’s tariffs, in response to Ibisworld analyst Yusuf Allinson.

He mentioned the tariffs “represent a grave danger to a UK car manufacturing sector in transition” as corporations retool factories for electrical autos.

Mr Allinson added that it could be “extremely difficult” for UK automotive corporations to search out various markets as a result of the “sector is saturated”.

“UK-made vehicles are already exported globally, so creating new demand to replace falling US volumes will be a challenge,” he mentioned.

He added that the UK may reply with retaliatory tariffs on Tesla, which is presently the preferred electrical car offered within the UK, promoting greater than 50,000 vehicles per 12 months.

Tesla, which is owned by Elon Musk, won’t be “unscathed” by tariffs, the billionaire and Trump advisor wrote on X.

“The tariff impact on Tesla is still significant,” he mentioned.