The UK car industry has hit a new low, with production slumping to its lowest point since 1949, as trade war tensions with the US have taken a toll on British manufacturers.
Shipments to the US fell by 55.4% in May, according to data from the Society of Motor Manufacturers and Traders (SMMT), due to new tariffs imposed by the US administration. This has forced many manufacturers to stop shipments, contributing to the decline.
While some improvement is expected with the upcoming trade agreement between the UK and EU, other markets have also seen a drop in demand. Shipments to the EU fell by 22.5% and output for the domestic market tumbled by 42%. Overall, UK car and commercial vehicle production fell by 32.8% in May.
The news comes as tensions between the US and China ease, with a trade deal signed between the two countries. The S&P 500 index and Nasdaq both hit new peaks amid hopes of further trade agreements with other major economies.
However, challenges remain, including economic uncertainty across North America, which has led to warnings from Heathrow Airport about weakening demand for US business travel. Additionally, the UK government’s “revenge tax” plan has been dropped, following a deal with the G20 that will exempt US companies from new OECD global minimum tax regime.
Despite these challenges, markets have shown resilience, with stocks rallying in response to the news of trade deal progress and declining tensions between major economies.
Source: https://www.theguardian.com/business/live/2025/jun/27/us-10-trade-deals-trump-china-rare-earth-agreement-stock-market-oil-confidence-business-live-news-updates