Michelle ThompsonLeaders from the automotive, manufacturing, and energy sectors cautioned MPs about the impact of Trump’s tariffs.
UK manufacturers are set to begin job cuts within weeks unless the government can secure a trade deal to protect the economy from the effects of Donald Trump’s trade war, industry leaders have warned MPs.
Senior executives from the automotive, manufacturing, and energy sectors cautioned a parliamentary committee that job losses could start this summer if the US proceeds with the trade tariffs announced by Trump earlier this month.
This warning comes as Chancellor Rachel Reeves visits the US for her first in-person meeting with American counterpart Scott Bessent, aiming to negotiate a new trade agreement to mitigate the damage from Trump’s trade policies.
If a deal isn’t reached, the UK government may need to implement a furlough scheme similar to the one used during the Covid pandemic to support workers facing job losses, the industry leaders said.
Mike Hawes, CEO of the Society of Motor Manufacturers and Traders (SMMT), expressed concern about the severe and immediate impact of Trump’s tariffs on high-end UK car manufacturers serving the US market, including Rolls-Royce, Bentley, Aston Martin, and McLaren. He warned that layoffs might occur within weeks, though they would be a last resort to avoid losing skilled workers.
Hawes urged the government to reconsider using the furlough scheme as a temporary solution, citing its success during the pandemic.
Stephen Phipson, CEO of Make UK, echoed the concerns, stating that manufacturers could start layoffs by summer unless a deal is reached with the US to alleviate the 10% tariffs on all goods and 25% tariffs on steel, aluminum, and cars.
The new US tariffs have already led some manufacturers to cut temporary and agency staff, with further job losses expected. The tariffs add to the already high energy costs in the UK, which are exacerbated by the country’s heavy reliance on gas.
Alan Johnson, a senior executive at Nissan, pointed out that the Sunderland factory is one of the most efficient but faces the highest electricity costs of any Nissan plant globally. He stated that the UK is no longer a competitive location for car manufacturing.
The executives urged ministers to follow through on their plan to present a modern industrial strategy and address the high energy costs facing UK manufacturers.
