The UK should impose “Tesla tariffs” on US electric cars produced by Elon Musk, after President Donald Trump announced higher taxes on steel imports, the Lib Dem leader has suggested.
Sir Ed Davey called for the UK to retaliate – after Trump confirmed he would impose 25 per cent tariffs on all steel and aluminium imports to the US from March – by hiking taxes on Tesla electric vehicles made by the Trump adviser, businessman and US government special employee Musk.
Sir Ed Davey said: “The government needs to draw up plans for Tesla tariffs to hit Musk where it hurts, if Trump’s administration follows through with their threats to the UK steel industry.
“Sitting back and hoping Trump won’t hurt us just isn’t going to work. The only way we can tackle Trump and Musk is by negotiating from a position of strength and showing that the UK will not be bullied from across the pond.”
Speaking at Prime Minister’s Questions (PMQs) in the House of Commons on Wednesday, Sir Ed recalled British soldiers fighting alongside Canadians and Americans 80 years ago in the latter stages of the Second World War, and said the US was hitting its closest allies hardest.
The MP for Kingston and Surbiton said: “President Trump seems to have forgotten all this.
“His tariffs against steel and aluminium will hit Canada the hardest and will also hit jobs and the cost of living in our country.”
And he added: “So in reminding President Trump who America’s true and longstanding friends and allies really are, will the Prime Minister also prepare a plan for tariffs in return, starting with tariffs on American electric cars?”
The suggestion comes after foreign secretary David Lammy told the Guardian that the UK might be minded not to retaliate if President Trump opted to impose tariffs.
He told the newspaper: “It’s a cross-party position that we’re an open, free-market society that doesn’t believe in tariffs, in either direction.”
And in response to Davey’s question, Sir Keir Starmer said: “He is right to reference our history, the 80-year anniversary, and of course we were fighting alongside the Americans and that is amongst the reasons we have a special relationship.”
The Prime Minister added: “British steel is an essential part of our heartlands, and we will not abandon our skilled workforce.
“And it needs a level-headed assessment of the implications, which is what we’re going through at the moment, but we will always put our national interest first, and steel workers first.”
Industry trade body UK Steel has warned “the imposition of US tariffs on UK steel would be a devastating blow to our industry” and highlighted that the “US is our second largest export market after the EU”.
The US accounted for five per cent of UK steel exports in 2023, the Prime Minister’s official spokesman has said, adding ministers were committed to supporting the British industry.