UK in Talks Over US Car Tariffs, Considering Tesla Subsidy Review: Report

The UK government is intensifying negotiations with the US to secure an exemption from the looming US tariffs on imported cars, Reuters reported on Thursday, quoting Britain’s Finance Minister Rachel Reeves. The discussions are critical as the new tariffs, set to take effect on April 3, could impose a 25% levy on foreign vehicles, significantly affecting Britain’s automotive industry.

Reeves outlined that the UK is pushing for a carve-out from these tariffs, arguing that the two countries maintain a positive trade balance with each other due to differences in trade measurement methods. The proposed tariffs are part of US President Donald Trump’s broader strategy to address the US trade deficit, with the latest measure targetting cars and light trucks.

“The UK has a strong trade surplus with the US in certain sectors, and we are working intensely to ensure that this exemption is granted,” Reuters quoted Reeves as saying. “We recognise the importance of this to our car industry, particularly for brands like Jaguar Land Rover, Rolls Royce, and Aston Martin.”

The finance minister also acknowledged the possibility of reviewing the subsidies given to Tesla, a key player in the electric vehicle market. According to the report, Tesla has benefited from a zero-emission vehicle mandate in the UK, which allows the company to sell surplus credits to other manufacturers struggling to meet electric vehicle targets.

“We are looking at how we can better support the UK car manufacturing industry, and that includes reviewing how subsidies and credits work, particularly those given to Tesla,” Reeves reportedly said.

In addition to addressing the tariff issue, Reeves confirmed that the UK is also seeking a tech-focused trade agreement with Washington to potentially shield British exports from tariffs. However, she insisted that the UK government is committed to avoiding escalating tensions that could lead to a trade war, which she believes would be detrimental to all parties.

“Trade wars are no good for anyone,” she said, adding, “We are working hard to ensure a fair and balanced deal for Britain. This is vital for our economic growth, especially as the US is our second-largest car export market after the European Union, with nearly 20% of British-made cars heading there.”