President Donald Trump has warned that he may soon increase tariffs on imported automobiles to encourage more US production.
The move announced today would mark a sharp contrast to the recently negotiated trade agreement with the UK that helped slash car import tariffs for the British car industry.
"I might go up with that tariff in the not-too-distant future," Trump said at a White House event.
"The higher you go, the more likely it is they build a plant here."
The threat comes just weeks after Trump and Prime Minister Keir Starmer agreed on May 8 to reduce tariffs on UK car imports from 27.5 per cent to 10 per cent.
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Trump said higher tariffs on cars could be introduced in the 'not too distant near future'
PAThe deal allowed Britain to export 100,000 vehicles annually to the US at a reduced rate, potentially saving UK manufacturers hundreds of millions of pounds each year.
But Trump's comments have drawn criticism from automakers who have been pressing the White House to reduce the 25 per cent tariffs he previously imposed on car makers across the globe.
The Detroit Three automakers have specifically criticised the UK deal, arguing it unfairly benefited British car imports while maintaining tariffs on Canadian and Mexican production.
The President argued that higher tariffs would incentivise automakers to accelerate their US investments.
But his remarks today have signalled a potential shift in trade policy that could affect global automotive supply chains.
The timing of Trump's warning was particularly notable given that Britain stands ready to implement its side of the May agreement, which was hailed as a major victory for UK car manufacturers when announced.
The May agreement marked a key diplomatic achievement for Starmer's Government, as without the deal, experts warned that the tariffs could see 25,000 jobs put at risk.
US Secretary of Commerce Howard Lutnick confirmed that the UK could send 100,000 cars annually at the reduced 10 per cent rate. Cars represent the UK's single largest commodity export to the US, worth £9billion, with 102,000 vehicles shipped last year.
Jaguar Land Rover CEO Adrian Mardell welcomed the May agreement, noting it would save his company "hundreds of millions of pounds a year".
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Donald Trump confirmed that a 25 per cent tariff would apply to all foreign car importsREUTERSThe US is one of JLR's largest trade partners, making the tariff reduction particularly significant for the British manufacturer.
Trade Minister Jonathan Reynolds said on Thursday that the UK was ready to implement its side of the tariff deal and is "very hopeful" for a proclamation from Trump to put the agreement into effect in the coming days.
Reynolds met US Commerce Secretary Howard Lutnick on Tuesday to discuss implementation.
"We're ready to go, and as soon as the president and the White House are ready to go on their side, we'll implement (our) part of the deal," Reynolds told reporters.
The trade minister said he would issue a statutory instrument to implement the reciprocal tariff changes. Officials indicated that an update on implementation was likely to come early next week, though Reynolds expressed hope for progress by the end of the week.
The US tariffs could put 25,000 UK jobs at risk
GETTYSeveral details remain to be finalised before the deal can be implemented, including steel quotas. Reynolds said he wanted to ensure the tariff reductions applied to every part of the UK steel industry, as the US finalises quotas with supply chain requirements on British steel exports.
But while the deal protects an array of sectors in the UK, the bioethanol industry has warned its future is under threat, with Associated British Foods deciding on the fate of a plant later this month.
Reynolds acknowledged the deal could increase competition but said the industry was already struggling.
"We are very sensitive to the ethanol issue... (but) they're losing a lot of money already," he said.
Despite Trump's new threat of higher auto tariffs, the May agreement represents what Starmer called a "historic deal" that puts the UK at the front of the trade queue.
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