The Spring Statement was delivered by Chancellor Rachel Reeves against the backdrop of the latest economic and fiscal outlook prepared by the Office for Budget Responsibility (OBR). This included a warning that "following the election of a new US administration in November, US trade policies and those of its major trading partners remain in flux".
Proving the OBR correct in this assessment, the Chancellor had hardly begun defending her Statement when President Trump announced 25% tariffs on cars and car parts imported into the US. They are due to come into effect on 2 April, the day declared "Liberation Day" by Trump, when a range of other new tariffs on exports to the US are due to be implemented.
The Chancellor responded to Trump’s auto tariffs by telling reporters that a retaliation is not on the agenda. “We’re not at the moment in a position where we want to do anything to escalate these trade wars. Trade wars are no good for anyone,” said Reeves.
This certainly seems to be the approach of the UK Government which has tended not to criticise the President but is pinning its hopes on negotiations with the US authorities for some sort of trade agreement before the 1 April deadline.
For the UK, the US is the second largest car export market after the EU, according to the Society of Motor Manufacturers and Traders (SMMT). Describing the move as disappointing, its chief executive, Mike Hawes, said: “Rather than imposing additional tariffs, we should explore ways in which opportunities for both British and American manufacturers can be created as part of a mutually beneficial relationship, benefitting consumers and creating jobs and growth across the Atlantic.”
The industry urges both sides to come together immediately and strike a deal that works for all, he concluded.
