With US tariffs on imported vehicles, parts, and raw materials set to increase costs across the automotive sector, UK manufacturers face significant pressure. JLR, heavily reliant on US sales, is particularly vulnerable, while American consumers are also expected to bear the brunt of rising prices. In this month’s One Auto API Market Insight , CEO Mark Fretwell looks at an industry braced for disruption.

In 2024, the US imported $246 billion in passenger vehicles.

From 3 April a new 25% tariff on imported cars – followed by a similar tariff on most imported car parts – looks set to send shockwaves through the global car industry.

Impact on UK Carmakers

UK vehicle exports to the US totalled $8.37 billion in 2024, driven by Jaguar Land Rover (JLR) alongside MINI, Bentley,  Rolls Royce and Aston Martin.

JLR benefited from a boom in US sales in 2024, and with production in the UK and Slovakia it is vulnerable to these tariffs.  Unlike German car manufacturers, who export vehicles to the US but derive less than 5% of their global revenue from those sales, JLR is more heavily dependent on exporting to the US.

Value of US Vehicle Imports by Country (2024)

Country	Value of Vehicle Imports ($bn)
Mexico	78.7
Japan	39.95
South Korea	37.4
Canada	31.35
Germany	25.45
United Kingdom	8.37
Slovakia	6.25
Other EU	5.9
Sweden	3.87
Italy	3.66
China	2.55

Slovakia has become a significant exporter to the US in recent years with both Jaguar Land Rover and Volkswagen Group establishing production plants in the country

A Post-Brexit Trade Dilemma

The US move intensifies pressure on the UK government to negotiate a post-Brexit trade deal with Washington.  While a deal has long been overdue, the UK now finds itself at a distinct disadvantage in negotiations.

The UK imported just 18,000 vehicles from the US in 2024, meaning any retaliatory tariffs would have a less significant impact on US carmakers.  This gives the US a strong bargaining position, potentially forcing the UK into a less favourable trade agreement.

US Consumers Also Lose Out

While the tariffs aim to encourage domestic production, they come at a cost to US consumers. Tariffs on imported steel, aluminum, and vehicle parts will increase production costs for US-made vehicles. As a result, both imported and domestically produced cars will become more expensive. 

The US is a country where personal vehicles are a necessity due to the lack of public transportation infrastructure, meaning these cost increases will hit American consumers particularly hard. Even Tesla, the only automaker assembling all its US-sold models domestically, has acknowledged the negative impact of these tariffs.

Impact on the UK Car Market

The UK car industry faces a complex and challenging landscape. 

Unless a swift trade agreement is reached with the US, UK carmakers will face an uphill battle in maintaining their foothold in one of their most important export markets.  

With limited ability for the UK new car market to absorb additional volume due to weak demand and increasing competition from new Chinese entrants,  this is likely to put pressure on costs, and increase the use of discounting and pre-registration.

The UK will not be alone in looking to alternative markets to offset a loss of sales to the US,  so carmakers will be bracing for fierce competition to maintain volume. 

The challenge for UK manufacturers and policymakers alike is clear: adapt quickly or risk long-term decline in one of the world’s most lucrative car markets.

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