London (AFP) – UK leader Keir Starmer vowed Monday to “shelter British business from the storm” of global economic disruption as he loosened electric vehicle targets for carmakers impacted by US President Donald Trump’s tariffs. The world’s auto sector has been hit hard by Washington’s sweeping new levies, which impose a 25 percent tariff on vehicles imported into the United States.
Starmer unveiled plans to give manufacturers more flexibility in transitioning to electric vehicles in a bid to boost the sector as it battles the higher costs of the levies. He told staff and journalists at a car factory in England’s West Midlands region that the measures were a “downpayment” and not “the extent of the turbocharging” to help businesses deal with tariffs. “In the coming days and weeks, we’re going to use industrial policy to shelter British business from the storm,” the prime minister added.
He called the levies “a huge challenge” for the future, warning that the “global economic consequences could be profound”. In an early sign of the fallout, UK luxury car manufacturer Jaguar Land Rover announced over the weekend that it would “pause” shipments to the US in April as it addressed “the new trading terms”. Starmer said on Sunday that he was prepared to directly intervene to support affected sectors, before later unveiling his plans to help the auto industry.
These included confirmation that all sales of new petrol and diesel cars will be outlawed by 2030, with hybrids to be sold until 2035 and small manufacturers exempt. The government has already announced £2.3 billion ($3.0 billion) to boost the production of electric vehicles, and on Sunday said that it would ease rules on how manufacturers can achieve the 2030 target. Under the new plans, carmakers can fall below the annual target for producing electric vehicles manufactured until 2026, if they make up for that shortfall before 2030.
The package of measures will exempt small and micro-volume manufacturers, including supercar brands such as McLaren and Aston Martin, from the targets. Vans with an internal combustion engine will be allowed to be sold until 2035. Support for the UK car industry, which employs 152,000 people and adds £19 billion annually to the economy, “will be kept under review as the impact of new tariffs becomes clear,” the government said. “These are challenging times, but we have chosen to come here because we are going to back you to the hilt,” Starmer added during Monday’s visit.
Vehicle manufacturers welcome the announcement but warned that the government would likely have to do more. Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, said the government had “rightly listened to industry” and “recognised the intense pressure manufacturers are under”. “Given the potentially severe headwinds facing manufacturers following the introduction of US tariffs, greater action will almost certainly be needed to safeguard our industry’s competitiveness,” he added.
But Doug Parr of environmental group Greenpeace said Starmer’s announcement “weakens the incentives driving the shift” and “risks consolidating Chinese leadership in the sector”. The government is believed to have been considering relaxing the electric vehicle mandate for a while but the announcement was brought forward because of Trump’s tariffs. It is the latest example of his actions influencing British policy after Starmer announced in February plans to increase defence spending.
© 2024 AFP
