The business community is taking the arrows from the trade war the U.S. launched on “Liberation Day” last month.
Unlike in a traditional war, businesses are on the front lines, as they pay the 145% duties on imported goods from China and the 25% tariffs on imported vehicles.
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The U.S. government collects the money, and businesses usually pass at least some of the cost along to consumers. The same thing happens to Chinese importers who pay that country’s tariffs on the mineral fuels, oil seeds, electric machinery, aircraft, and spacecraft parts that they need from America.
Despite this extra cost, tariffs are championed by numerous industries due to their long-term benefits for domestic producers. Higher prices on foreign goods due to taxes make domestically made products more attractive.
“We’re in a triage situation,” Shawn Fain, president of the United Auto Workers union (the largest auto worker union in the country), told ABC earlier this year. “Tariffs are an attempt to stop the bleeding from the hemorrhaging of jobs in America for the last 33 years.”
Related: UK trade deal gives car buyers a glimpse of what the future holds
Fain famously campaigned for President Donald Trump’s opponent Kamala Harris during the 2024 election.
If companies already produce their goods domestically, they can benefit without any extra work.
So, as Trump negotiates tariff deals that lower the duties placed on foreign competitors, the short-term pain domestic producers endure becomes that much worse.
On Thursday, the White House announced a trade deal with the UK, and it is ruffling feathers among some of the people backing Trump’s tariff campaign back home.
UAW President Shawn Fain supports President Donald Trump’s trade war.
Image source: Shen/Bloomberg via Getty Images
Big 3 Automakers pan latest tariff deal
On Thursday, the White House announced an outline for a trade deal with the United Kingdom.
The United States is the UK’s largest trading partner, with business between the two countries (imports and exports) rising nearly 4% last year to £314.6 billion ($416.8 billion). The U.S. accounted for about 18% of total UK trade.
Cars accounted for about 5% of the UK’s total exports to the U.S. in 2024, making automotive the largest UK export to the States.
In 2024, the UK exported £9.0 billion ($12 billion) worth of cars to the U.S., accounting for 24.7% of the country’s total car exports. The U.S. is Britain’s top trade partner in the car sector.
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American Automotive Policy Council, the automotive group representing Detroit’s Big 3 automakers (Ford (F) , General Motors (GM) , and Stellantis (STLA) ), responded unhappily.
“The U.S. automotive industry is highly integrated with Canada and Mexico; the same is not true for the U.S. and UK. We are disappointed that the administration prioritized the UK ahead of our North American partners,” Matt Blunt, president of the AAPC, said.
“Under this deal, it will now be cheaper to import a UK vehicle with very little U.S. content than a USMCA-compliant vehicle from Mexico or Canada that is half American parts. This hurts American automakers, suppliers, and auto workers.”
Luxury British cars are big winners
If you are a U.S.-based fan of luxury UK brands like Bentley, Jaguar, Land Rover, or McLaren, rejoice, because the deal between the two countries will make the price tags for those vehicles slightly more reasonable.
The UK exported about 102,000 vehicles to the U.S. in 2024. The average cost to ship a car to the US from the UK is about £1,205 ($1,597), according to AutoShippers. Much of that cost is often passed on to the consumer.
The Trump administration had placed 25% import taxes on cars coming from overseas on top of the existing 2.5% duty. That number was cut to 10% on a maximum of 100,000 vehicles; any cars exported above that level are subject to the 27.5% import tax.
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U.S. automakers are hoping that this deal isn’t the blueprint for future tariff negotiations.
“We hope this preferential access for UK vehicles over North American ones does not set a precedent for future negotiations with Asian and European competitors,” Blunt said.
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