The Society of Motor Manufacturers and Traders (SMMT) has expressed significant concern following President Trump’s announcement of his long-promised tariff policy. Beginning imminently, the UK will face a 10% tariff on the majority of its exports to the United States.
While lower than the tariffs imposed on some other major economies, the SMMT views this as a disappointing and potentially damaging measure that will affect a wide range of automotive products. The organisation notes that car manufacturers and, from May 3rd, most car part suppliers, are likely to experience the most severe impact, facing a 25% tariff in addition to existing duties.
The SMMT hopes that a negotiated agreement between the UK and the US can still be reached to reduce or eliminate these tariffs and acknowledges the government’s ongoing efforts to secure such a deal. The industry body emphasises that this announcement comes at a particularly challenging time, as the sector is already navigating multiple economic headwinds. The SMMT is in continuous dialogue with the government and will be advocating for accelerated trade discussions to secure a path forward that supports jobs and economic growth on both sides of the Atlantic.
The SMMT believes that a collaborative approach to industrial and trade strategies is essential for strengthening the UK automotive industry, alongside a thriving domestic vehicle market. The latest UK new car registration figures, published by the SMMT, present a mixed picture. March, a key month for new car sales due to the number plate change, saw the highest demand since 2019. It was also the strongest month on record for electric vehicle (EV) uptake.
This growth was attributed partly to natural market progression but also to manufacturer discounting and consumers seeking to purchase EVs before new tax disincentives take effect. Despite this record, EV uptake still represented less than 20% of the overall market, falling approximately eight percentage points short of the UK’s mandated targets for the year during its highest volume month. Looking ahead, the application of the VED Expensive Car Supplement to battery electric vehicles (BEVs) is expected to pose further challenges to market growth.
Meanwhile, the new light commercial vehicle (LCV) market experienced its fourth consecutive month of decline, reflecting weak business confidence in fleet renewal. However, there was notable growth in new pick-up registrations, occurring ahead of a change in the tax treatment of double-cab vehicles from commercial to car status for benefit-in-kind and capital allowance purposes, set to take effect on April 6th. The SMMT anticipates that this fiscal measure will impose additional costs on businesses, potentially hindering growth in key sectors and further weakening the new LCV market, which is considered an indicator of UK economic health.
Given the current uncertain global trading environment, the SMMT’s upcoming International Automotive Summit, scheduled for June 24th in London, is considered particularly relevant. The event will provide a crucial platform for over 300 business leaders from the automotive and related sectors, industry experts, national and international policymakers, and the media to discuss the challenges and opportunities facing the industry. Keynote speakers will be announced in the coming weeks, and delegate registration is currently open.