Reform UK leader Nigel Farage said retaliatory tariffs would be “absolutely counter productive in every way”.
He urged Britain to make the most of its post-Brexit freedoms as global economies are reeling from Donald Trump's tariff blitz last week.
Speaking to reporters in Doncaster, Mr Farage said: “This is the moment to recognise that, as an independent nation with its own trade policy, we can actually benefit out of this. Certainly in the way the European Union can’t. That positioning is right.
“Where I disagree fundamentally with the Prime Minister is that he’s making a big speech today about the state of the car industry. It is nothing to do with the tariffs that last year was our lowest level of car production since 1954.
“The EV mandates that were put on by the last Conservative government have been destroying the car industry and all the Prime Minister is doing this afternoon, frankly, is fiddling around the edges. Even without America and tariffs our car industry is in crisis.”
The government has announced a relaxation of electric vehicle sales targets to help the car industry in the face of trade tariffs from the US.
A ban on producing new petrol and diesel cars will still come into effect in 2030, but manufacturers will now have more flexibility on annual targets and face lower fines.
Mr Farage said he believed Mr Trump’s global tariff policy is part of a wider negotiation strategy by the US president.
He said: “I still think that this big tariff threat globally … It’ll look different in three months time. He’ll use it as a big negotiating tool. I think we’re better positioned to come out of this with a deal than almost any other country.
“So, short term it’s painful, but what it does do, it expose the fact that not being in the European Union does have advantages and ones that we ought to use.”
US President Donald Trump has imposed a 25% levy on cars imported to the US, which is a major export market for the UK motor industry.
It came into force last week and is separate to a 10% tax on nearly all UK products announced by Trump on Wednesday.
