US President Trump announced a new 25% tariff on automobiles yesterday, which will likely have a significant impact on the UK car industry.

The tariff applies to motor vehicles imported from worldwide countries and is effective from April 2nd. Automobile parts will also receive the full 25% tariff, but that is due to be introduced in May.

Trump has said that the new measures will provide “tremendous growth” for the car industry, creating jobs and investment in the US. A theory that is not shared by many analysts who fear that US car production will be hindered by the new levy.

The UK is the sixth largest provider of cars to the US, behind Mexico, Japan, South Korea, Canada and Germany, with over 18% of the UK’s car exports currently heading to the US.

Automobiles are the UK’s largest value product exported to the US, accounting for around £8.2 billion of revenue last year – outlined in the chart below. That level of trade would now be subject to around £2 billion in duty.