Birmingham [Alabama], April 16: The U.S. government's new wave of tariffs on imported vehicles is placing severe pressure on Britain's automotive industry, threatening to disrupt operations, endanger tens of thousands of jobs and undermine long-term production sustainability, according to a leading expert on Britain's auto industry.
In an exclusive interview with Xinhua, Professor David Bailey, a business economics expert at the University of Birmingham, described the aftermath of the U.S. auto tariffs as an impending "industry crisis" that could hit hardest in Britain's manufacturing heartland.
On April 3, the Trump administration imposed a 25 percent tariff on imported vehicles, with an additional 25 percent duty on auto parts scheduled to take effect in early May.
"Cars are the UK's number one goods export to the United States, worth as much as 9 billion pounds (about 11.88 billion U.S. dollars) a year," Bailey said. "The West Midlands is the number one exporting region, largely on the back of Jaguar Land Rover. This is a huge potential hit for the industry and the region."
He emphasized that the entire automotive value chain is deeply rooted in the West Midlands. "When you consider not just manufacturing but R&D, supply chains, and logistics, the scale is massive."
A recent study by the Institute for Public Policy Research estimated that around 25,000 jobs across the British car industry are at risk due to the new U.S. tariffs, a figure Bailey considers to be a significant underestimate. "You could easily see that number in the West Midlands alone," he noted.
The effects, he added, extend beyond vehicle assembly lines. "One job in a plant like Halewood could support up to seven others in the supply chain. If those plants are hit, the impact will cascade across suppliers, services, and local economies."
With luxury brands like Rolls-Royce, Bentley, Lotus, and McLaren sourcing components from the West Midlands, the ripple effect could spread nationally.
Bailey argued that U.S. President Donald Trump aims to pressure foreign automakers to raise their prices, thereby steering American consumers toward domestic cars. However, "Even American manufacturers like Ford, GM, Chrysler, even Tesla, depend on imported parts. That's going to raise production costs in the U.S., too."
He warned the tariffs could backfire. "If costs rise across the board, consumers may just defer purchases altogether. That's bad for both sides."
Bailey also expressed concerns about Britain's preparedness. "We're not as well organized in terms of government response," he said. "Right now, we lack a mechanism to keep capacity in place if plants are forced to scale back."
British car production has already been struggling. "Last year we produced about 960,000 cars, well below the 1.7 million peak. If output drops too low, some plants become economically unsustainable," he said. "The Mini plant in Oxford is a case in point, it's running below capacity and there's no new model planned. That's a red flag."
He suggested the possibility of a focused trade agreement on automobiles. "We apply a 10 percent tariff on U.S. cars, and they're hitting us with 27.5 percent. Just eliminate both - (it's) simple. That would be a win-win."
However, he warned that broader trade negotiations will be much more complicated. "Trump will likely demand concessions on agriculture, digital services, and even healthcare. That makes a wide-ranging deal far more difficult."
On April 15, in a possible move to de-escalate tensions, Trump hinted at a temporary pause or phased implementation of the auto parts tariffs originally set for early May. He also announced plans to exempt U.S.-certified components under the United States-Mexico-Canada Agreement, in a bid to ease pressure on American manufacturers while still applying leverage abroad. While some industry experts welcomed the news, many remain cautious.
Bailey remains skeptical. "It's a contradiction. You're punishing foreign and domestic firms with tariffs while handing out tax breaks. Even Tesla has quietly warned the U.S. government this could backfire."
Data from the Centre for Cities shows that Coventry is the most exposed British city to the new U.S. tariffs, with 22.1 percent of its goods exports heading to the United States. Other vulnerable cities include Derby, Worthing, Telford, and Blackpool.
Bailey concluded with a stark warning: "Unless something is done quickly, the UK auto sector could be in crisis."
Source: Xinhua News Agency
