The ongoing tariff war is leaving the UK aftermarket in limbo, and it needs to be resolved as soon as possible, plead industry experts.
According to Society of Motor Manufacturer and Traders’ (SMMT) figures, the automotive sector employs more than 800,000 people in the UK plus supports a further 2.2m jobs in adjacent sectors. The Office National Statistics (ONS) claims that almost 37 million jobs in the UK depend on automotive, with the vast majority of these being within independent garages.
US president Donald Trump’s new 25% tariffs on imported cars and incoming 25% tariff on car parts is claimed would decimate imports by almost 75%. Aftermarket leaders are worried given the US is our second largest car export market after the EU.
“The introduction of tariffs is a fast-moving situation and as of Wednesday 16 April it is still unclear whether tariffs imposed on automotive parts being exported to the USA will apply on the introduction date of 3 May 2025,” said Independent Automotive Aftermarket Federation chairman Mark Field, who added that which parts are subject to tariffs is still also up in the air.
Mike Hawes chief executive of the Society of Motor Manufacturers and Traders called the fast changing situation “deeply disappointing” with far reaching implications to both new vehicle sales and parts suppliers. “While we hope a deal between the UK and US can still be negotiated, this is yet another challenge to a sector already facing multiple headwinds,” he said.
“These tariff costs cannot be absorbed by manufacturers, thus hitting US consumers who may face additional costs and a reduced choice of iconic British brands, whilst UK producers may have to review output in the face of constrained demand.”
This point on pricing is backed by Field. “Ultimately the consumer pays,” he said, “but businesses will do everything possible to mitigate any increased costs and remain as competitive as possible. The increased cost is between the UK exporter and the American importer, so it may not all be passed on to the customer – some export companies may lower their prices to maintain a relationship, or to keep production volumes.”
The tariffs are likely to hit EU exporters hardest. Valeo, for instance, which makes a lot of its products in China – a country it has had a base in for 30 years and now boasts 27 production sites, 13 R&D centers and over 18,000 employees.
“It is also very clear that these tariffs will impact businesses who do not export directly to the USA,” said Field. “For example, if a part begins its production process in China and then is exported to the US for further work, this part is subject to a tariff, at the time of writing 125%-plus . When importing that part back into the UK, a further tariff might be applied should retaliatory tariffs be introduced.”
Asked if this could fuel the rise of counterfeit parts, Field added: “Potentially yes – if the price of legitimate parts rise, then the lower price parts become more attractive, but these are increasingly likely to be counterfeit. It will simply make an unwelcome existing problem even worse.”
GSF Car Parts’ CEO Steve Horne is another to warn about the potential impacts on the sector: “This is going to reverberate across the whole automotive industry, not just for car manufacturers, but also for aftermarket including distributors of car parts,” he told BBC Breakfast.
“Tariffs are paid by the importer. It's up to them how much of the increased cost it passes onto the consumer – but the whole supply chain could be disrupted, and that's where GSF plays its part in trying to mitigate those disruptions to the hard-working independent garages.”
In contrast, a spokesperson for LKQ Europe, told CAT: “The ongoing situation regarding tariffs will have minimal direct impact on our current operations. LKQ Europe – which includes LKQ UK & Ireland – engages in limited trade in goods with the US. We continue to monitor the situation closely and are committed to delivering an uninterrupted service to our customers.”
Ultimately, nobody is going to benefit from the global upheaval which shows little evidence of stabilising. While it’s too early to say what effects the tariff tiff will have on our aftermarket longer term, the shorter term unknowns is a worry for many across the sector.
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