Keir Starmer is about to make a major speech on the future of the British car industry after experts warned of a huge impact from Trump’s tariffs.
In the West Midlands, the Prime Minister will unveil a raft of new policies to support automobile firms after Jaguar Land Rover announced over the weekend that they would “pause” shipments to the US until they can “address the new trading terms”.
A 25% tariff is now applied to foreign cars imported into the US under the previously announced tariffs, which came into effect last week. Other British products will also face a 10% levy following Trump’s disastrous ‘Liberation Day’.
In a bid to support manufacturers, Starmer is expected to relax rules around fines for those who do not sell enough electric cars, and supercar firms will be exempted. He will reinstate the 2030 ban on the sale of new petrol and diesel cars – but regulations around manufacturing targets on electric cars and vans will also be tweaked to help firms in the transition. New hybrids will be on the market for another five years.
Luxury supercar firms such as Aston Martin and McLaren will meanwhile be allowed to keep producing petrol cars beyond 2030, as they only manufacture a small number of vehicles per year. New hybrids and plug-in hybrid cars will be allowed to be sold until 2035. Petrol and diesel vans will be able to be sold until 2035, as well as all hybrid models.
Officials are also going to make it easier for manufacturers who do not comply with Government sales targets to avoid fines, and levies will be reduced. Support for the car industry will be kept under review as the full impact of the tariffs becomes clear.
It came as the FTSE 100 plunged to a one-year low this morning as fears deepen over a new global recession caused by Trump’s tariffs. The index, which tracks the UK’s top 100 listed firms, dropped by about 5% in early trading on Monday as a sharp sell-off kicked in shortly after markets opened. It follows plunges in many Asian markets overnight and a bleak picture in this morning’s European stock markets.
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