President of the European Commission Ursula von der Leyen is preparing retaliatory measures following the introduction of US tariffs on vehicle imports.
US President Donald Trump announced a 25% tariff on car imports – 10% for British-made cars on April 1, referring to the event as “Liberation Day”.
While President Von der Leyen said the EC is ready to negotiate with the US to remove barriers to trade, she said: “At the same time, we are prepared to respond.
“We are already finalising a first package of countermeasures in response to tariffs on steel.
“And we are now preparing for further countermeasures, to protect our interests and our businesses if negotiations fail.”
Yet another challenge to a sector facing multiple headwinds
The Society of Motor Manufacturers and Traders (SMMT) said the tariffs cannot be absorbed by car brands and production volumes will have to be adjusted.
Mike Hawes, SMMT chief executive, said: “The imposition of a 10% tariff on all UK products exported to the US, while less than other major economies, is another deeply disappointing and potentially damaging measure.
“Our cars were already set to attract a punitive 25% tariff overnight and other automotive products are now set to be impacted immediately.
“While we hope a deal between the UK and US can still be negotiated, this is yet another challenge to a sector already facing multiple headwinds.”
Hawes explained that as the tariffs cannot be absorbed by original equipment manufacturers (OEMs) they will be passed on to hit US consumers.
He said: “Trade discussions must continue at pace, therefore, and we urge all parties to continue to negotiate and deliver solutions which support jobs, consumer demand and economic growth across both sides of the Atlantic.”
Sue Robinson, National Franchised Dealers Association chief executive, said the tariffs pose a “significant risk to the sector and the global economy”.
She said: “The cumulative effects of these tariffs will be profound, impacting our dealer members who have already shown remarkable resilience in the face of economic challenges, as well as manufacturers and the broader automotive industry.
“I urge the UK government to take swift and decisive action to safeguard jobs and protect our industry during these unprecedented times.”