One of Britain’s biggest carmakers Jaguar Land Rover (JLR) has taken the short-term action of putting all United States shipments on ice for a month.
The manufacturer of luxury brands - including Jaguars, Defenders and Range Rovers - JLR is putting a hiatus on exports to America while it figures the most appropriate approach to President Donald Trump’s 25% tariff on all foreign cars imported into the country effective last Thursday.
JLR’s decision to halt U.S. shipments in April follows plans by car giants to raise prices, impose import fees, pause production and even lay off staff in response to new tariffs.
Escalating trade wars are expected to materially impact the global car industry, especially in light of the highly globalised supply chains and the heavy reliance on manufacturing operations across North America.
JLR does not have manufacturing plants in the UU
An "important market” for its luxury brand, JLR, sells around a fifth of its cars in the U.S.
In its financial year ending March 2024, the company sold around 95,000 cars and reported £6.5 billion in revenue from sales in the U.S.
JLR expects these new tariffs to add thousands of dollars to the full cost of the price of its cars.
Other British carmakers to follow suit
Analysts expect other British carmakers to follow suit.
“I expect similar stoppages from other producers as firms take stock of what is unfolding,” said David Bailey, an automotive industry expert and professor of business economics at the University of Birmingham.
“The industry is already facing multiple headwinds and this announcement comes at the worst possible time,” Mike Hawes, chief executive of the U.K.’s Society of Motor Manufacturers and Traders, said last week.
The auto tariffs also change the table for other British luxury carmakers, including Bentley and Aston Martin, due to their small production numbers. As a result, manufacturing in the U.S. simply isn’t commercially viable, making tariffs more difficult to circumnavigate.
Ongoing trade arrangements
Meanwhile, U.K. Prime Minister Keir Starmer has said his government would endeavour to negotiate more favourable trade arrangements with the U.S.
To put the significance of British car exports into the U.S. into context, The U.S. is the largest single-country export market for British cars, with 6.4 billion pounds ($8.3 billion) worth of vehicles shipped there in 2023.
That’s about a tenth of Britain’s overall exports of goods to the U.S.
While the U.S. is Britain’s second-largest trading partner, that trade is easily eclipsed by the flow of goods and services between Britain and the European Union (E.U.).
According to the British Office for National Statistics, in 2023, Britain imported about £58 billion of goods and exported about £60 billion to the U.S.
Shares in Tata Motors, the Indian parent company of Jaguar Land Rover, dropped more than 9 percent this past week and are trading at their lowest level since mid-2023.
