As President Donald Trump prepares to impose sweeping 25% tariffs on foreign car imports, the UK government has confirmed it expects to be affected—and has not ruled out retaliatory measures.
Downing Street acknowledged the threat on Monday, with the Prime Minister’s spokesman warning that “all options remain on the table” if the UK is included in the tariffs, which are expected to take effect on Wednesday.
Talks between the U.S. and UK over an economic prosperity agreement are ongoing, but sources close to Prime Minister Keir Starmer say negotiations are unlikely to conclude before the tariffs hit.
“The prime minister will always act in the national interest,” a spokesman said. “A trade war with the U.S. is not in anyone’s interest—but we will not hesitate to respond if necessary.”
Trump’s new tariffs are aimed at protecting American manufacturing and jobs. But British automakers, particularly luxury brands like Rolls-Royce and Aston Martin, could be among the hardest hit. The U.S. is the UK’s second-largest car export market, with UK car exports totaling £7.6 billion annually.
The UK has already been targeted in Trump’s broader trade offensive, including 25% tariffs on steel and aluminum. Over the weekend, Trump confirmed the new tariffs would apply globally, regardless of trade surpluses or deficits.
The Liberal Democrats have urged the government to stand firm. Party leader Sir Ed Davey said: “Just asking nicely clearly doesn’t work with Trump. We must be prepared to impose reciprocal tariffs, including on Elon Musk’s Teslas.”
Economic analysts warn of serious consequences. The Office for Budget Responsibility (OBR) said a full-blown trade war could wipe out billions in growth and derail the government’s fiscal plans. Under the worst-case scenario, UK GDP could fall 1% below projections next year.
Starmer and Trump met at the White House in February, where both sides discussed trade ties. Trump hinted at a “real deal” that could exempt the UK from punitive tariffs—but that deal appears increasingly uncertain.
Despite the risk, Downing Street says it remains calm and “pragmatic” but is ready to act.
As global markets react to the rising tensions, one thing is clear: Trump’s trade policy is reshaping the UK’s post-Brexit economic future in real time.
