Trump tariffs and EU export declines drive sharp drop in May output
The U.K.’s automotive industry continues to suffer under mounting trade pressures, with new data showing a dramatic 32.8% drop in vehicle production for May. According to the Society of Motor Manufacturers and Traders (SMMT), just 49,810 cars and commercial vehicles were produced, marking the fifth consecutive monthly decline and the worst May figure since 1949—excluding pandemic-hit 2020.
Export volumes were hit particularly hard. Shipments to the European Union fell 22.5%, while exports to the U.S. plummeted 55.4%, as automakers faced growing challenges from tariffs and model transition delays. The production slowdown was attributed to model changeovers, plant restructuring, and significant disruption from new trade policies enacted by the United States.
Trump’s tariffs upend British auto exports
In April, U.S. President Donald Trump imposed a 25% tariff on all imported cars and parts, causing high-end brands like Jaguar Land Rover and Aston Martin to temporarily halt shipments to the U.S. Though a partial reprieve came in May—when Trump signed an executive order lowering the tariff to 10% on the first 100,000 U.K.-made vehicles imported annually—the damage had already been done.
Prime Minister Keir Starmer noted the tariff reduction could save hundreds of millions of pounds annually for companies like Jaguar Land Rover. Still, industry leaders say deeper recovery depends on broader trade alignment and long-term policy stability.
Historical lows and future outlook
With cumulative vehicle output down 12.9% for the year to 348,226 units, 2025 is on track to be the industry’s worst year since 1953. This downturn comes despite the auto sector being one of the U.K.’s key export engines, responsible for over £9 billion in U.S. sales alone last year—more than 27% of total car exports.
“While 2025 has proved to be an incredibly challenging year for UK automotive production, there is the beginnings of some optimism for the future,” said SMMT CEO Mike Hawes. He cited the importance of improved U.S. and EU trade relationships, along with new industrial strategies that could stabilize long-term growth.
Despite current struggles, automakers and policymakers are holding out hope that recent agreements and a more favorable policy climate will allow the industry to rebound in the second half of the year and beyond.
