Committee publication · Correspondence · 29 April 2025
Letter to the Secretary of State relating to the Government response to the US tariffs on the automotive sector, 29 April 2025
From: Business and Trade Committee
Inquiry: Industrial Strategy
Summary
The Business and Trade Committee writes to the Secretary of State for Business and Trade expressing deep concern about 25% US tariffs on UK automotive exports. The committee seeks clarity on the government's assessment of economic impacts, potential job losses, investment risks, and support options—including possible use of the £2 billion automotive fund. A response is requested by 8 May 2025.
Key findings
- US 25% tariffs on vehicles pose severe risk to UK manufacturers and supply chains, with negative sales impact potentially too large for manufacturers to absorb without significant job losses and reduced R&D investment.
- UK automotive sector already faces cost pressures; Nissan cited higher energy costs at Sunderland than any other Nissan plant globally.
- Committee seeks government assessment of tariff impacts over 3, 6, and 12-month periods, and potential effects on jobs, investment, and supply chain viability.
- Committee queries potential government support mechanisms including employer cost reductions, energy cost cuts, domestic sales subsidies, and R&D tax credit increases.
- Committee asks whether government will deploy £2 billion allocated to automotive industry this Parliament to mitigate tariff impact, and whether such funds would be replenished.
Tone
CriticalTopics
trade-tariffsautomotive-manufacturingindustrial-strategypublic-financeregional-economics
Key actors
Business and Trade Committee, Jonathan Reynolds MP, Secretary of State for Business and Trade, Nissan, UK automotive industry, US administration
Notable line
“The negative impact on sales now anticipated is potentially too big and too fast for manufacturers to absorb for a prolonged period …”
Key Quotes
“The US administration's decision to impose 25% tariffs on vehicles exported to the US has triggered alarm in the automotive industry and its supply chains.”
“Nissan, for example, was very clear that it is too expensive to build cars in the UK, with its plant in Sunderland paying more for energy than any other Nissan plant in the world.”
“The automotive industry is strategically important for our national growth, our regional economies and for our ability to support, and benefit from, the green transition.”
Source · parliament.uk record ↗