Money blog: Trump car tariffs condemned around world; Tesla takes hit; UK faces big consequences (2025)

Thanks for following our live coverage today as the Money blog followed the fallout of Donald Trump's latest tariffs announcement.

We'll be back tomorrow with our regular consumer and financial news and tips - as well as anything else that happens in Trump's trade war.

Before we go, here's a summary of goings-on today:

• The world has been reacting after Donald Trump announced new 25% tariffs on all imported cars to the US ahead of 2 April, a day he has called "liberation day";
• Leaders have condemned Trump's tariffs, with European Commission President Ursula von der Leyen saying the move is "bad for businesses, worse for consumers" while Canada's Prime Minister Mark Carney said the tariffs are a "direct attack";
• Meanwhile, British carmakers have pleaded with the UK and US governments to avoid the tariffs and strike a deal;
• Declines in car stocks pushed European shares to a two-week low, while shares of US automakers fell in after-hours trading;
• The European Union is preparing its "calibrated" response to the tariffs, which it insisted will be "timely" and "robust".

Donald Trump's latest tariffs will be bad for growth and prosperity, Volkswagen has said, as it warned against any counter-tariffs.

The German car manufacturer said it was closely monitoring developments and will comprehensively assess the potential impact on supply chains and its production network.

Volkswagen described the US as an important market, having invested more than $14bn recently.

"We share the assessment of most experts that US tariffs and any counter-tariffs will have negative consequences for growth and prosperity in the US and other economic areas," a spokesperson said.

"The entire automotive industry, global supply chains and companies as well as customers will have to bear the negative consequences."

The car maker said it is continuing to advocate constructive talks between the trading partners in order to ensure planning security and economic stability and to avoid a trade conflict.

Donald Trump's 25% tariffs on car imports into the US are just the latest chapter in the trade war which has been growing since the US president returned to the Oval Office.

But the tariffs have led to acts of defiance being unearthed in the face of the trade war, particularly in Canada.

In this video, our US correspondent Martha Kelner speaks to a coffee shop owner who has started selling "Canadianos" instead of Americanos...

Kelner also spoke to a passenger on the ferry which connects Vancouver Island with the mainland who said she thinks Trump is intent on causing mayhem.

"He's a menace, he's just creating chaos where it doesn't need to be," Nancy said.

Meanwhile, another passenger told Kelner they are trying to buy anything but American products as the trade war rumbles on.

We've also been hearing from Sir Keir Starmer in Paris, who describes Donald Trump's latest tariffs as "very concerning".

He says it is important to work with the car industry in response to the tariffs, but expressed the need to remain "pragmatic and clear eyed".

"We are engaged in intense discussions with the US on economic arrangements on a number of fronts," Starmer says.

"We will continue in that way because I think that, rather than jumping into a trade war, it is better pragmatically, to come to an agreed way forward on this if we can."

But Starmer also highlights the need to put national interest first, adding all options will be on the table.

"The industry doesn't want a trade war, but it's important that we keep all options on the table," he adds.

"I'm working hard with others to make progress on economic arrangements, which I hope will better serve our country than a trade war, which will not in my view."

While speaking at a Paris summit for peace in Ukraine, French President Emmanuel Macron took the opportunity to address Donald Trump's tariffs.

He describes the policy as inflationary, and says he has told the US president that his proposal is not a good idea.

Macron adds that Trump has asked Europe to spend more on defence, arguing it is therefore not coherent to impose tariffs.

Asked about what Europe will do, Macron says the response will be reciprocal.

That comes after the European Commission said the EU is preparing its "calibrated" response to Trump's tariffs (see 12.55pm post).

While spokesman Olof Gill told reporters he could not disclose exact timings, he did insist the response would be "timely" and "robust".

Tariffs are a "blunt instrument" but they're a characteristic of Donald Trump's administration, a former boss of Aston Martin has said.

Andy Palmer explained that the UK has a "reasonably neutral balance of trade" with the US, and while it may not have been the original target, it is "certainly one of the victims of this policy".

"You might not think that a buyer of a Rolls-Royce would care, but they do," he says.

"A 25% hike in prices is going to be really bad, particularly for some of those smaller car makers that are very reliant on profitability coming from the US."

Asked about what he would do if he was in the boardroom, Palmer said: "If I was at Nissan as I was for many years, you'd have been talking about switching manufacturing from Mexico to the US, or at least increasing your percentage or you'd be looking to increase your US parts count into the base vehicle and perhaps then lobbying hard to get you some form of relief.

"I think for companies like Aston Martin, Bentley, Jaguar Land Rover, your first port of call is going to be one of lobby.

"Let's see if the government can find some kind of exception because we're not part of the EU and we don't have a massive balance of trade difference, that's the best chance."

Watch the interview in the video below...

By Rob Powell, political correspondent

On foreign and domestic issues, it's a busy time for the Business Secretary - as evidenced by the raft of questions directed at him during a brief appearance at a central London trade summit.

On the prospect of some sort of deal to avoid tariffs from Donald Trump, Jonathan Reynolds spoke carefully.

He said we would know "pretty soon" what the outcome of "intensive" talks with Washington will be, but sounded somewhat optimistic, saying the trading relationship with the US was "fair and balanced".

He did lean into the idea that the Digital Services Tax – a levy on big tech revenues hated by the Trump White House – could be scrapped though.

Describing it as a "temporary measure," Reynolds said it wasn't put in place as something that would never be changed.

Watch: Reynolds interrupted by protesters

Could that be put on the table as part of attempts to get a UK carve out from tariffs?

On the prospects for British Steel, the Business Secretary's tone was more downbeat.

After Sky News revealed the Chinese owner of the business had rejected a £500m offer from the government to aid the company's transition to greener production, Reynolds said the situation was "very, very challenging".

Asked if he might up the offer, the cabinet minister said talks were continuing, but that he needed to make sure it was "the right deal for the taxpayer".

He suggested he needed assurances over the viability of the business as well as a "guarantee on jobs".

That won't bring much comfort to the thousands facing potential redundancy if an agreement can't be reached.

After Donald Trump announced his latest set of tariffs, much of the discussion has focused on how countries respond.

We're now hearing that the European Union is preparing its "calibrated" response to "achieve the intended impact".

"We have this announcement on cars. Next week we understand that a new suite of measures from the US, what they're calling their reciprocal tariffs, will come into force," European Commission spokesman Olof Gill told reporters.

"We regret all of these, but we are preparing for all of these".

Gill said that while he can't disclose exact timings for Europe's response, he insisted it will be "timely" and "robust".

That comes after Trump took to Truth Social earlier this morning with a renewed threat for the EU.

"If the European Union works with Canada in order to do economic harm to the USA, large scale tariffs, far larger than currently planned, will be placed on them both in order to protect the best friend that each of those two countries has ever had!"

The UK must avoid going head-to-head with the US after Donald Trump's latest tariffs, the secretary general of the International Chamber of Commerce UK has said.

Chris Southworth explained that while the UK and US are facing similar issues, the way we deal with it should not be through tariffs.

"That's just going to make it worse," he told our presenter Darren McCaffrey on Business Live.

"The way we deal with it is actually growth plans, trade agreements, negotiations and deals so we can increase the volume of trade and that generates more revenue."

Southworth said this had to be backed "with proper economic policy at national level" to get economic benefits down to the people who desperately need it.

He also described the past 24 hours as a "perfect illustration of what we're dealing with" after Trump's tariffs were announced hours after Rachel Reeves' spring statement.

Southworth added that Trump's tariffs "demonstrate the volatility and unpredictability of the environment businesses are operating in".

Watch the full interview in the video below...

Trade barriers created by Donald Trump's tariffs should be discussed rather than creating more, BMW Group has said.

The manufacturer said the European Union and US were the world's largest trading partners, and warned a trade conflict would not have any benefits.

"Both sides should therefore promptly find a transatlantic deal that creates growth and prevents a spiral of isolation and trade barriers," it said.

BMW's Spartanburg manufacturing plant in South Carolina is its biggest plant worldwide.

The plant exported around 225,000 BMW vehicles with an export value of more than $10bn last year, making it the largest automotive exporter by value in the US.

Since 2014, the plant has exported more than 2.7m BMW vehicles, representing around two thirds of its total production - with an export value of $104bn.