Tom espine
Business Reporter, BBC News
Getty images
The United Kingdom “will not” jump into a trade war “with the United States on the plans of Donald Trump to place 25% of import taxes on cars entering America, the Prime Minister said.
The government is trying to avoid prices, which was to come into force on April 2, thanks to “intense negotiations” with American counterparts, added Sir Keir Starmer.
PM’s comments come in the midst of the concerns that prices could upset the world automobile trade and supply chains, with one of the largest exporters in the United Kingdom in the United States, Jaguar Land Rover (JLR), online to be one of the most affected manufacturers.
Trump argued that measures will lead to “enormous growth” for the automotive industry, promising that it would stimulate jobs and investment in the United States.
But Sir Keir said the prices were “very worrying”, adding that the government would be “pragmatic and clear” in its response.
“Industry does not want a trade war, but it is important to keep all the options on the table,” he added.
British car exports are about 7.6 billion pounds sterling per year, and the United States is the second largest market for British cars after the European Union, according to the automotive industry, the Society of Motor Manufacturers and Traders (SMMT).
There are around 198,000 people directly employed in the British automotive industry, and it supports around 813,000 jobs in the wider economy, he said.
All the main car manufacturers in the United Kingdom have foreign owners.
JLR, which belongs to the Indian conglomerate Tata Motors, said that the company “awaited additional information” on the prices.
Meanwhile, the founder of the Unique Automotage parts company said the prices are pushing people around the world to buy Chinese manufacturing cars.
‘Conclude an agreement’
The Trump administration plans to impose 25% of car import taxes from April 2. Parts taxes should start in May or later.
The last decision threatens to expand the World Trade War and is part of the president’s desire to protect US companies and stimulate manufacturing in the United States.
The prices are taxes billed on goods imported from other countries and these increases in increased on consumers thanks to higher prices, which could encourage Americans to switch to American vehicles.
It can also force companies to manufacture and invest in the United States. “If you build your car in the United States, there is no price,” said Trump.
But the approach has been questioned by a number of economists, who argue that it will increase inflation.
In the United Kingdom, the SMMT said that the announcement of Trump prices on Wednesday was “not surprising but, however, disappointing” but called on the two governments to conclude an agreement.
Its managing director Mike Hawes said that “the UK automobile industries.
The British government is in talks with the American administration and hopes a trade agreement before the prices come into force, includes the BBC.
John Neill, the founder of Union and the former executive president of the company, said that Trump’s prices were “a gift to the Chinese automotive industry”, because international consumers would respond to a trade war by buying Chinese alternatives.
He added that prices could have “involuntary consequences”.
“Americans may think that they are boxing the world’s world cars in the United States, but the reality is that they will box the American world cars industry,” he said.
JLR is automotive company in the United Kingdom most exposed to Trump prices, according to Ibisworld analyst Yusuf Allinson.
He said the prices “represent a serious danger for a sector of the manufacture of British cars in transition” as a re -dediction for electric factories.
Allinson added that it would be “extremely difficult” for British car companies to find alternative markets because the “sector is saturated”.
“Vehicles made in the United Kingdom are already exported worldwide, so the creation of a new demand to replace the fall in American volumes will be a challenge,” he said.
He added that the United Kingdom could respond with reprisals on Tesla, which is currently the most popular electric vehicle sold in the United Kingdom, selling more than 50,000 cars per year.
Tesla, who belongs to Elon Musk, will not be “unscathed” by the prices, wrote the billionaire and Trump’s advisor on X.
“The price impact on Tesla is still important,” he said.
