Workers at major UK automotive manufacturers including Jaguar Land Rover and BMW’s Mini plant in Oxford face increasing uncertainty as new US tariffs on car parts loom large. According to a new report from the Institute for Public Policy Research (IPPR), the proposed levies—set to take effect in May—could deal a devastating blow to Britain’s already fragile automotive industry, placing thousands of jobs at risk and stoking fears of a wider industrial slowdown.
The warning comes as part of a broader analysis by the IPPR that reveals the UK’s vehicle and transport equipment exports are especially vulnerable. One in eight cars manufactured in the UK are destined for the American market, making the sector a primary target for punitive US trade measures. The Washington-led move to impose a blanket 20 per cent tariff on all UK goods is fuelling concern among workers and executives alike, with the potential knock-on effects seen as an “extraordinary challenge” for the industry.
Concerns rising among UK automotive workers
Car industry workers across the Midlands and the South East—regions home to significant production facilities—are voicing growing apprehension about job security. Many fear that cost increases associated with import tariffs on components could lead to downsizing, halted production lines, or even complete shutdowns of certain operations.
Workers at Jaguar Land Rover in Solihull and BMW’s Mini plant in Cowley have expressed frustration and anxiety over the lack of immediate support or guarantees. Their concerns are compounded by new manufacturing sector data showing a sharp fall in business confidence, with March recording the lowest levels of sentiment in over two years. Order volumes have also dipped, with many firms citing the impending trade tariffs as a central factor.
IPPR: Time to pivot towards green growth
In response to the growing crisis, the IPPR has urged the UK government and business leaders to intensify investment in the electric vehicle (EV) transition and broaden efforts to capitalise on sustainable transport technologies and embrace the green jobs revolution. The think tank argues that by focusing on green aircraft, trains, and EVs, the UK can reduce its reliance on vulnerable export markets and secure high-quality jobs for the future.
“As one door closes, another opens,” said Pranesh Narayanan, research fellow at the IPPR. “There is huge untapped potential in manufacturing green planes, trains and automobiles and selling them at home and abroad.”
The IPPR’s latest recommendations include scrapping tariffs on imported EV batteries, reducing VAT on electric vehicle charging infrastructure, and introducing grants for low-income households to adopt cleaner vehicles.
Economic growth under pressure
The economic implications of US tariffs stretch well beyond the car industry. The Office for Budget Responsibility (OBR) has projected that a 20 per cent tariff across all US trading partners could reduce UK GDP growth by 0.6 percentage points. In a worst-case scenario involving global retaliation, the OBR warns that the hit could rise to 1 percentage point—effectively wiping out the Treasury’s forecasted £9.9 billion budget surplus by 2030.
Whitehall officials are understood to be engaged in last-minute talks with their American counterparts in a bid to win a carve-out for the UK. However, with the geopolitical environment becoming increasingly protectionist, success remains uncertain.
A new industrial strategy needed
Experts suggest the crisis could be an inflection point for the UK’s manufacturing base. Emily Fry, senior economist at the Resolution Foundation, said the country “won’t be immune from the impacts of supply chain disruptions and global growth headwinds” brought on by rising trade tensions.
She emphasised the importance of services trade in driving future economic growth, but warned that a “new era of protectionism” could undermine even those prospects if left unchecked.
The Workers Union Says…
“In the meantime, TWU says that automotive workers and industry leaders are calling for clarity, action, and long-term policy commitments that place green innovation at the centre of a new industrial strategy. Without swift intervention, the coming months may usher in a painful period of job losses and industrial contraction across Britain’s car manufacturing heartlands.”
