Worst Drop in U.K. Vehicle Manufacturing over the Past Seven Decades
The U.S. import tariffs implemented in 2025 have significantly impacted the vehicle manufacturing sector in the United Kingdom. The lowest level of vehicle production in the country since 1952 (excluding pandemic lockdown months in 2020) was recorded in April 2025.
According to data released by the Society of Motor Manufacturers and Traders (SMMT), car production in the UK fell by 15.8% in April 2025, with export vehicle production dropping by 10.1%. The U.S. received 16.5% of all vehicle exports from the UK in April 2025, but exports to the U.S. decreased by 2.7% during the same period. In contrast, exports to China increased by 44.0%, and exports to Turkey rose by 31.2%. However, exports to the EU decreased by 19.1%, and the UK still exported more vehicles to the EU than to any other global market.
The U.S. government raised reciprocal tariff rates to 15–20% on UK-origin steel products and expanded tariffs to aluminum and derivative goods effective in early to mid-2025. These tariffs on steel and metals used in auto manufacturing contribute to higher production costs for UK car makers, which in turn lead to increased vehicle prices. As a result, the prices of new vehicles have risen by about 13.1% in the short run and 10.0% in the long run.
The drop in UK car production also reflects automaker model changeovers and lower demand in key export markets, such as the U.S., due to the Easter holidays in April 2025. Additionally, the start of the trading year in 2025 for the UK vehicle industry is the lowest since 2009.
Mike Hawes, SMMT chief executive, called for urgent action to boost domestic consumer demand and international competitiveness. Aidan Rusby, CEO and founder of digital finance provider Carmoola, stated that the fall in new-vehicle production could push up prices in the used-car market.
While some tariff adjustments are expected to take place starting July 2025 under the U.S.-UK Economic Prosperity Deal, import quotas or tariff adjustments may still restrict UK vehicle exports to the U.S., adding uncertainty to manufacturing output planning. The situation remains dynamic, but as of mid-2025, the outlook for UK vehicle manufacturing remains challenging.
The tariffs implemented by the U.S. in 2025 on imported vehicles and steel products have had a significant impact on the automotive industry, causing a rise in production costs and vehicle prices. This has contributed to the drop in vehicle production in the UK, with exports to the U.S. decreasing and prices in the used-car market potentially rising. The challenge for the UK vehicle production sector remains uncertain, as future tariff adjustments and import quotas under the U.S.-UK Economic Prosperity Deal may still restrict exports to the U.S.
