Donald Trump's new car tariffs to ‘hit Europe hard’ with drivers under threat

Donald Trump’s car tariffs could “hit Europe hard” with European manufacturers and customers set to feel the sting. Tom Jervis, Consumer Editor at Auto Express has admitted firms are already losing “millions” as a result of the policy, with job losses also a serious problem.

The severe consequences are laid bare by experts despite the U.S. President already watering down tariffs. The UK was initially subjected to a rough 25% rate on vehicle exports but the Republican leader lowered this to just 10% for the first 100,000 cars to leave the country. Despite the extra leeway offered as part of the UK - U.S. trade deal signed by Sir Keir Starmer, the news is still bleak.

Speaking exclusively to Express.co.uk, Tom said: “At Auto Express, we’re tracking financial updates from manufacturers across the board — and the picture is sharply worsening.

“From Stellantis taking a £260 million hit and seeing US shipments down 25%, to Jaguar Land Rover cutting 500 managerial roles in the UK amid tariff‑driven sales slumps, it’s clear Trump’s trade actions are squeezing every corner of the industry. If this continues, the second half of the year could hit European carmakers hard.”

Vehicle exports are a major part of the relationship between the U.S. and the UK with £8.3billion of goods leaving the country in the one year to September 2024.

However, it’s not just the UK that is set to feel the blow with Europe also suffering with their own 15% tariff, six times higher than the 2.5% rate in place before the trade war started.

Although lower than the previous 27.5% rate, analysis shows carmakers are expected to lose billions. Volkswagen reported $1.5 billion (£1.1billion) in the first half of 2025, with US-imposed trade tariffs taking much of the blame.

Luxury brand Porsche explained the company had been forced to cut its full-year profit target due to a $462 million hit from tariffs. This was now set to have a consequence on consumers with price rises likely to be inevitable.

The brands explained costs were up between 2.3% and 3.6% in July in a major blow to those on the lookout for a new vehicle. Porsche CEO Oliver Blume previously said: “This is not a storm that will pass. We continue to face significant challenges around the world."