Classic car enthusiasts and collectors will have sighed in relief at news that vehicles of a particular vintage evade Donald Trump's 'reciprocal' 25 per cent tariffs on motor imports introduced last week - but there could be a huge catch coming next month.
Vehicles over the age of 25 years will not be subject to the levies announced on 2 April as part of the US President's 'Liberation Day' strategy, protecting one of the UK's most important industries that contributes £8.7billion of aggregate Gross Value Added (GVA) to the economy each year.
While the rest of the auto industry comes to terms with the impact of tariffs, the sparing of historic and classic cars has been described as 'common sense prevailing' by the Historic and Classic Vehicles Alliance (HCVA).
If classic cars had not been exempted from the tariffs, the results could have been catastrophic to such a vital UK industry, as the US remains one of the largest buyers of European classic cars.
However, there's growing concerns that a second wave levy will sting the classic vehicle sector.
That's because an additional 25 per cent tariff will hit auto parts from 3 May - and it looks likely they will be applied to classic car components too.
How will that impact the industry and is the classic car industry our automotive sleeping giant?
Classic car enthusiasts sighed in collective relief at news that vehicles of a particular vintage evade Donald Trump's 'reciprocal' 25% tariffs - but there could be a huge catch coming next month Pictured: A classic Aston Martin V8 Vantage Volante parked on the street in Washington
Dale Keller, CEO of the HCVA, said: 'Historic vehicles and parts are by nature already built, classified and valued and there is no ability to recreate them as newly manufactured in the USA.
'Applying a penalising tariff would have served no policy objective.'
A 25 per cent tariff added to the purchase and shipping costs of imported classic cars to the US would increase the expense significantly, making it impossible for many mid-range collectors to pay the premium.
It would leave many US buyers turning to stock that's already stateside - not only pushing up prices significantly across the pond, but removing a serious chunk of UK classic car buyers from the market.
Dmitriy Shibarshin, director of marketing at West Coast Shipping told This is Money: 'It is a huge relief that classic cars are exempt from the tariff increase.
'If classic cars were to be taxed at 25 per cent into the US instead of 2.5 per cent, it would not only drive down the demand for classic car imports, but it would have signaled the disconnect of the US classic car market from the world.
'Values for cars already in the US would go up, but the flow of imports would drop off drastically.
'Everyone in the classic car industry is extremely grateful that the US government continues to allow for a low import tax on classics, which supports the idea that classic cars are a piece of history which should continue to be supported and cherished. '
A tit-for-tat situation could easily snowball too; the UK and EU offers preferential import duty and VAT rates for historic vehicles compared to modern cars due to their cultural significance.
For any car 30 years or older, the UK and EU allow for 5 and between 5.5 and 10 per cent import duty respectively, as long as certain criteria are met.
All classic cars over the '25-year-rule' will be exempt from Trump's 'Liberation Day' 25% tariffs
While classic vehicle imports evade the levies, it's not yet clear whether parts supplied for them will be. If so, it could cause havoc to the UK specialist companies
Will classic car parts still be subject to tariffs?
It remains unclear whether classic car parts will be subject to imports or not.
However, if given the green light, the impact could be catastrophic to small and medium-size businesses.
Companies that sell restoration parts for American classics are a smaller part of the automotive ecosystem but still significant, not least to preserve history and heritage as well as jobs.
Established classic car parts makers such as Rimmers, SNG Barratt, Britpart and Introcar export a large amount to US enthusiasts but these are made outside the USA and could subject to the tariffs.
The US Government has announced a second wave of tariffs that will begin on 3 May 2025.
These will target certain auto parts classified under various subheadings in Chapters 40, 70, 73, 83, 84, 85, 87, 90, and 94 - all fall under new subheading 9903.94.05.
This applies to parts of passenger vehicles (sedans, sport utility vehicles, crossover utility vehicles, minivans, and cargo vans) and light trucks classified under the following USHTS codes.
It means vehicle parts will be subject to the 25 per cent duty rate - but there is yet to be clarification about the 25-year rule for these sections.
The HCVA told This is Money that it believes its members involved with exporting parts are referring to the import agencies in the US for guidance.
At the moment, it seems that parts will be subject to the new tariff and there is no mechanism for separate classification of historic parts.
However it appears there's scope to add additional parts categories as written in the executive order but due to the complexity it will need import agencies with specialist staff to advise on specific importation cases and changes.
At the very least it will be an enormous admin headache for classic car parts importers.
This is Money's been informed that there will be a meeting on Tuesday (today) to talk about the issue.
The US loves European classic cars: it's estimated that the US imported over €600million (£515m) classic and collectors' vehicles from Europe in 2023 alone. Pictured: A vintage Aston Martin DB4 leading a procession of classic American muscle cars in Newport, Rhode Island
How big is the US classic car market – how many classic cars does it import?
The US is a place of car worshippers, with 69 million individuals in the US considered 'enthusiasts', insurer and classic car expert Hagerty claims.
It's also the world's largest importer of cars – nearly half of all cars sold in the US last year were imported, GlobalData found.
John Mayhead, editor of Hagerty UK, told us: 'The UK classic car industry is estimated to be worth over £8billion to the UK economy, of which over £1billion comes from outside the country.
'The US is a big part in that, especially at the top end of the market as many £1million-plus cars are regularly sold in and out of America.
'In total, Hagerty have tracked 23,646 classic cars over 25 years old being shipped by sea into the US over the past 5 years, with the Nissan Skyline R33 GT-R the most numerous import, followed by the Land Rover Defender.
'The UK accounts for 12.5 per cent of all classic cars shipped into the US, with only Japan more numerous at 56 per cent. In numbers, that's 2,940 cars from the UK, 13,146 from Japan.'
On top of that is air transported classic cars, although Hagerty says this is likely to be extremely small due to the cost.
Even a few years ago the Hagerty US Market has 43million collector cars with a total combined value estimated at $1trillion.
The UK Heritage motor sector has an aggregate turnover of £18.3billion, with a total of 3.1million classic and historic vehicles in the UK, the Centre for Economics and Business Research found
The Society of Motor Manufacturers and Traders (SMMT) says the auto sector is the UK's largest exporter of manufactured products in 2024, with shipments of cars, vans and components worth almost £47billion.
The HCVA estimated that 115,000 people work in the classic car industry in the UK - the same staff size as the nation's ports and twice that of the whisky industry.
The UK Heritage motor sector has an aggregate turnover of £18.3billion, with a total of 3.1million classic and historic vehicles in the UK, the Centre for Economics and Business Research found.
The total spend of £3.15billion per annum for new parts, maintenance and repair of classic vehicles supports over 25,000 FTE jobs.
Specific skills that classic car maintenance and restoration workers possess are estimated to be worth at least £335 per annum to the UK economy.
The collectible vehicles market represents £65billion to £77billion in annual revenue
A 2025 report by McKinsey & Company put the global value of the existing stock of collectible cars to around €800billion (£685bn) in 2024.
Collectible vehicles were defined 'as those that have been out of production for at least five years and valued at €20,000 (£17k) or more that have intangible characteristics'.
For automotive industry stakeholders along the value chain, the collectibles market represents an opportunity worth €76billion (£65bn) to €90billion (£77bn) in annual revenue.
It is perhaps unsurprising then that the Trump Administration has chosen to keep the 25 year rule in place and exempt classics.
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