UK Prime Minister Keir Starmer is taking the first steps to help UK businesses withstand US tariffs by easing the government’s electric vehicle sales mandate.
The UK was previously set to ban the sale of combustion engine cars by 2030, dealing a massive blow to South African automakers like VW and Ford, which export the Polo hatchback and Ranger bakkie, respectively.
The changes will give carmakers more time to prepare for the 2030 phase-out of combustion engine cars from sale, according to a release from the Department for Transport.
As part of the measures, the UK will allow hybrid cars to be sold until 2035, give manufacturers more flexibility on vehicle sales up to 2030 and exempt small producers, including luxury carmaker Aston Martin Lagonda Global Holdings, from the targets.
The move is the first in a series of pro-growth announcements planned by Starmer’s government this week, as he responds to President Donald Trump’s sweeping global tariffs that have roiled markets and fueled concern of a global recession.
Starmer spoke to international leaders including European Commission President Ursula von der Leyen, German Chancellor Olaf Scholz and Germany’s chancellor-in-waiting, Friedrich Merz, on Sunday about the US tariffs, and said it was a moment for closer collaboration in Europe.
Starmer said he would “go further and faster” to strengthen the UK’s economy and “ensure it is as resilient as possible and can withstand these kinds of global shocks,” Downing Street said in a statement after the Sunday call.
He also said it would be “important for the UK to strengthen its trading relationships with others across the globe”.
The autos industry has been hit particularly hard by Trump’s plan to impose a 25% tariff on cars imported into the US, forcing some manufacturers to temporarily halt production or offer big discounts.
Over the weekend, British automaker Jaguar Land Rover said it’s pausing shipments to the US as it looks at ways to address the new trading terms.
“Now more than ever UK businesses and working people need a government that steps up, not stands aside,” Starmer said in a statement ahead of a speech on Monday outlining the EV changes.
“Global trade is being transformed.”
The government will also seek to boost demand for EVs by pressing ahead on new charging infrastructure and moving forward with tax breaks, according to the statement.
While the UK was slapped with a 10% rate — lower than that of the European Union and other major economies such as China — the Labour government has pledged to announce measures to support British industry while seeking an economic deal with the US.
Writing in the Telegraph on Sunday, Starmer said the government will this week unveil measures to support the UK economy and businesses.
“The world as we knew it has gone,” he wrote. “We must rise to meet the moment.”
As part of the government’s growth push, Chancellor of the Exchequer Rachel Reeves is due to hold an economic and financial dialogue with India this week as the two countries seek a trade deal.
Ministers in the UK’s business and trade department are convening a meeting of the country’s Steel Council on Tuesday to discuss the latest tariff impacts.
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