UK Plans Retaliation as US Tariffs Hit 25%

March 30, 2025 News Zier Editorial Team Economy, Europe 0

UK plans retaliation as US tariffs hit 25% on April 2, 2025, threatening £7.6 billion in car exports.
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Trade Tensions Rise with New Import Taxes

By Oshadhi Gimesha, Lead Journalist | Editor-in-Chief Approved

Negotiations Under Pressure

The UK is prepared to retaliate against U.S. tariffs if necessary, government sources revealed on March 25, 2025. With a 25% tax on car imports set to begin on April 2, 2025, the UK is in last-minute talks with the White House to secure an exemption. For American and global readers, this signals a potential escalation in trade tensions that could impact economies worldwide.

Key Points

  • The UK may retaliate against U.S. tariffs, sources said on March 25, 2025.
  • A 25% U.S. tariff on car imports starts on April 2, 2025, with parts taxes in May.
  • UK car exports to the U.S. are worth £7.6 billion annually, a key market.

Tariff Threat Looms

On March 25, 2025, UK government sources announced readiness to retaliate if the U.S. imposes tariffs without granting an exemption. The U.S., under President Donald Trump, will introduce a 25% tariff on car imports starting April 2, 2025, with taxes on auto parts to follow in May or later. The UK is negotiating to avoid these measures, arguing its trade with the U.S. is relatively balanced compared to other nations. Prime Minister Sir Keir Starmer emphasized a desire to avoid a trade war, calling the government’s approach “pragmatic and clear-eyed.” Negotiations will continue past Trump’s deadline on March 26, 2025, with one source stating, “We won’t stop trying.”

Trump claims the 25% levy will drive “tremendous growth” for the U.S. auto industry, boosting jobs and investment. However, concerns are mounting about potential downsides. The tariffs could lead to temporary shutdowns of car production in the U.S., raise consumer prices, and strain relations with allies. The U.S. imported about eight million cars in 2024, valued at $240 billion, with Mexico as the top supplier, followed by South Korea, Japan, Canada, and Germany. The UK, with £7.6 billion in annual car exports to the U.S., is the second-largest market for its cars after the EU, according to the Society of Motor Manufacturers and Traders (SMMT). The SMMT called Trump’s announcement “disappointing.”

Retaliation Options on the Table

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If the U.S. tariffs take effect on April 2, 2025, the UK is considering several retaliatory measures. Options include targeting sectors where British products are vital to the U.S., such as specific goods like Harley-Davidson motorcycles. A more extreme, though unlikely, possibility is targeting U.S. financial services, described as a “nuclear” option by an expert. Despite these threats, UK ministers are reluctant to enter a trade war. The Office for Budget Responsibility warned that a reciprocal trade war could erase billions from economic growth, nearly eliminating the surplus the Chancellor relies on to meet fiscal rules. A former Labour minister noted that the government’s commitment to free trade will be tested in the coming weeks.

Global Reactions and Impacts

World leaders have criticized the U.S. tariffs since their announcement. On March 21, 2025, German Economy Minister Robert Habeck urged the EU to “respond firmly,” while French President Emmanuel Macron called the tariffs a “waste of time,” urging Trump to reconsider. For the U.S., where trade policies influence global markets, the tariffs could raise car prices, impacting consumers. The auto industry faces uncertainty in the UK, a key exporter to the U.S.. Germany, Canada, and Japan, major car suppliers to the U.S., might also retaliate, escalating tensions. With trade ties to the U.S. and the EU, the Netherlands and Australia could feel ripple effects. If negotiations fail by April 2, 2025, a trade war might intensify by June 1, 2025. But if an exemption is secured, stability could return by January 1, 2026.

Economic Stakes Ahead

The UK’s £7.6 billion car export market to the U.S. hangs in the balance as of March 25, 2025. Retaliation could protect British interests, but risks a broader trade war. For U.S. and global readers, is it a choice to support domestic growth or prioritize open trade? France, Australia, and others are watching closely. Trade relations are at a crossroads.

All facts are independently verified, and our reporting is driven by accuracy, transparency, and integrity. Any opinions expressed belong solely to the author. Learn more about our commitment to responsible journalism in our Editorial Policy.

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