Tariffs, tensions and repairs

The global economy in 2025 is still grappling with a multitude of challenges: economic uncertainty, geopolitical pressures, trade conflicts, and supply chain disruptions. These issues have significant implications for the automotive industry, and vehicle owners.

As inflation continues to surge, trade wars and geopolitical tensions continue, and the complexity of vehicle technology increases, we need to think about how consumers can better protect themselves from the increasing cost of cars, repairs and parts shortages.

Rising costs, tariffs and trade wars: a perfect storm

In the face of ongoing trade disputes and tariff battles - particularly with President Trump’s high tariffs on automotive components - costly repercussions are expected by manufacturers and existing supply chains within the automotive industry. UK and European manufacturers that don’t have a local production base in the US are likely to feel the brunt of the effects – but even in the US, domestic manufacturers will take a hit on components imported from Mexico and Canada.

Last year, 16.9% of UK car exports were sent to the US, totalling more than 101,000 units valued at £7.6 billion. Meanwhile, the EU exported finished passenger cars and light trucks (weighing under 5 tonnes) worth €39 billion, amounting to around 750,000 units.[1] 

In 2023, the US imported $64.8 billion worth of automotive parts from Mexico, $16.1 billion from Canada, and $11 billion from China. Together, these imports accounted for 66.7% of all automotive parts brought into the country. According to a study by the Center for Automotive Research, the impact of a 25% tariff on parts imported for cars produced in the US average $4,000-5,000 per vehicle, while tariffs on imported cars themselves average around $8,600.[2]

Trade tensions are further exacerbated by ongoing supply chain disruptions, particularly across North America, where automotive parts often cross borders multiple times before final assembly. This complexity drives up costs at every stage.

As a result, the total cost of car ownership continues to rise. With parts prices increasing by up to 25%, the average annual cost of warranty repairs in the UK is £747 with bills in US sitting around $2,279[3]. For major issues such as engine or gearbox repairs, costs already run into thousands – and are only expected to climb further.

Shifting gear in technology and maintenance

While the targets and transition to electric vehicles may have dominated headlines in recent years, the main story of 2025 will be how rising tariffs, a fractured supply chain, and escalating repair costs are forcing car owners to rethink which vehicles they drive and how they protect them.

The automotive industry is at a crossroads, as manufacturers pivot between electric vehicles (EV) and internal combustion engine (ICE) vehicles. While EVs have long been seen as the future of mobility, the shift has not been without growing pains and many automakers are still working closely with ICE models throughout the long transition period. While EVs typically have lower maintenance costs, combustion engines, transmissions, and complex electronics are vulnerable to wear and require more frequent repair.

The US tariffs, followed by retaliatory increases from other nations such as the EU may result in a global rise in import duties. This could put pressure on UK-based suppliers of car parts, potentially driving up costs for both manufacturers and consumers, while the increased cost of importing car parts may create financial pressure for UK garages and repair shops, passing the additional costs onto car owners.

Supply chain challenges