New figures released today reveal that UK car exports to the US have skyrocketed 1550%. This bold move comes on the heels of a slowing in proposed import tariffs. In July, the US accounted for just over 18.1% of all UK car exports. That’s really something, especially considering the headwinds facing the auto sector. The boost follows a previous years’ slump. Last month, UK car manufacturing fell to its lowest level since 1953.
The tariff issue has been key in this evolution. At first, US President Donald Trump threatened a 25% import tax on UK cars back in April. That tariff was later reduced to 10% and took effect at the end of June. So far this change only applies to the first 100,000 cars exported to the US. UK producers have a short window of time to benefit from the cut rate.
In July, UK car manufacturing experienced a year-on-year increase of 6.8%, the second successive month of growth for production. That’s a sharp turnaround after three months of negative sales, offering a hopeful sign for a recovering sector. Despite this, UK car manufacturing output remains down year-to-date by -11.7%. Amid all the challenges has come some good news from SMMT. The European Union continues to be the single biggest market for UK car manufacturers, making up 45.6% of their exports.
Even Jaguar Land Rover (JLR), one of the largest and most successful carmakers in the UK, stopped shipping to the US after this first tariff announcement in April. These soon returned to service just after a month. The industry as a whole still adapts to an industry landscape rife with trade confusion and consumer uncertainty.
Mike Hawes, chief executive of SMMT, addressed the current situation, stating, “It remains a turbulent time for automotive manufacturing, with consumer confidence weak, trade flows volatile and massive investment in new technologies underway both here and abroad.”
Even with all of the uncertainties, Hawes pointed to the encouraging sign of increasing car production. “Given this backdrop, another month of growing car output is good news,” he remarked.
Warnings from experts including Colleen McHugh, chief investment officer at Wealthify, underlined how crucial the US market was for British-built cars.