How Have Trump Tariffs Rocked UK Car Manufacturing?
Car production in the UK dropped to its lowest level in 76 years in May 2025, as tariff challenges and factory disruptions hit manufacturers.
According to data from the Society of Motor Manufacturers and Traders (SMMT), car and commercial vehicle manufacturing fell for the fifth consecutive month in May, down -32.8% to 49,810 units.
Excluding 2020, when lockdowns during the COVID-19 pandemic closed factories and impacted production rates, this is the lowest industry performance for the month since 1949.
The SMMT also finds that over the year-to-date, total manufacturing output is down -12.9% on 2024 to 348,226. This is the lowest figure since 1953.
“While 2025 has proved to be an incredibly challenging year for UK automotive production, there is the beginnings of some optimism for the future,” says Mike Hawes, SMMT Chief Executive.
“Confirmed trade deals with crucial markets, especially the US and a more positive relationship with the EU, as well as government strategies on industry and trade that recognise the critical role the sector plays in driving economic growth, should help recovery.”
Trump tariffs and trade challenges
Ongoing fallout and disruption from the sweeping tariffs introduced by US President Donald Trump have been a key influencer of the downward trend.
Trump’s tariffs began in February 2025, with the issuing of an Executive Order announcing levies on Canada, Mexico and China.
Subsequent announcements have caused significant global disruption, upending key global financial markets, hitting investors and sparking a trade war with China.
In March 2025, Trump announced new import taxes of 25% on cars and car parts coming into the US.
The tariffs covered imported passenger vehicles – including sedans, SUVs, crossovers, minivans and light trucks – as well as key automobile parts such as engines, transmissions, powertrain components and electrical systems.
The President said that the measure would lead to “tremendous growth” for the industry, suggesting it would boost US jobs and investment.
At the time of the announcement, UK Chancellor Rachel Reeves told the BBC that the revised tariffs would be “bad for the UK, and bad for the US as well”.
UK exports fall
The SMMT says that car production declined in May as a result of US tariffs, ongoing model changes and industry restructure, with 47,723 units being manufactured.
Commercial vehicle manufacturing saw the steepest drop, impacted by the closure of one of Stellantis Vauxhall van plant in Luton.
Car manufacturing for export fell by -27.8%, with shipments to the EU and the US – the UK’s two largest markets – dropping by -22.5% and -55.4% respectively. The US share of exports declined from 18.2% to 11.3%.
The SMMT says this was primarily due to the imposition by the US administration of a supplementary 25% Section 232 tariffs on cars from March, which depressed demand instantly forcing many manufacturers to stop shipments.
Major brands have since felt the impact of these decisions – in April 2025 Jaguar Land Rover suspended shipments to the US, while Aston Martin reduced its exports in the same month.
Trade deals and industrial strategy support growth
Despite these challenges, the SMMT says the industry remains optimistic.
In particular it points to the recent trade deal between the UK and the US that included reducing import taxes on 100,000 British cars per year from 25% to 10%.
This aligns with new trade deals secured with the EU and India will build on the recent UK Government Industrial Strategy, which is designed to support UK manufacturers to grow.
The strategy, which Prime Minister Kier Starmer described as “a turning point for Britain’s economy”, outlines changes to improve cost competitiveness, strengthen industrial focus and increase production capacity.
“With rapid implementation, particularly on the energy costs constraining our competitiveness, the UK can deliver the jobs, growth and decarbonisation that is desperately needed,” says Mike.
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