New plan to save UK car industry to be in Government's industrial strategy

Keir Starmer’s upcoming industrial strategy will prioritise carmaking as the Prime Minister scrambles to contain the fallout from Donald Trump’s tariffs.

The move comes after the President of the United States slapped a 10 per cent baseline tariff on UK goods rising to 25 per cent for cars.

While the Government continues to try and negotiate down the car tariffs in talks on an economic deal with the White House, with the US accounting for around 17 per cent of all UK automotive exports, worth £7.6bn, Starmer will also act domestically to protect the industry.

A senior trade sector source told The i Paper the car industry was likely to ask for tax breaks, including to incentivise people to take up electric vehicles, as well as targeted subsidies to support manufacturing.

The sector is also expected to ask for further easing of existing targets and fines, after Starmer last week watered down the mandate for zero-emission vehicles (ZEVs), which will ban the sale of new cars powered by petrol and diesel from 2030, to boost the industry.

While the car industry was not mentioned specifically by the Department for Business and Trade in its preview of the industrial strategy last year, it is set to be included as part of the “advanced manufacturing” sector which is seen as a crucial driver of future economic growth.

The shift is a sign of the Government’s determination to be seen to be protecting the industry in the face of the tariffs threat.

Rachel Reeves on Sunday promised to “bring forward action from our industrial strategy” to support the economy and remove barriers to growth, after The i Paper reported that announcements pencilled in for June’s Spending Review were being sped up with the Chancellor’s economic plans under heavy pressure from the global trade war triggered by Trump.

Article courtesy of: inews.co.uk published 14th April 2025