A 25% levy on car imports came into force on Thursday, one of several measures announced by US President Donald Trump which have sent shockwaves through global supply chains
Jaguar Land Rover has announced it will “pause” all shipments to the US as it works to “address the new trading terms” after tariffs were imposed earlier this week. A 25% levy on car imports came into force on Thursday, one of several measures announced by US President Donald Trump which have sent shockwaves through global supply chains.
The US is the second largest export market for the UK’s car industry, after the European Union. In a statement, a Jaguar Land Rover spokesperson said the company was “taking some short-term actions including a shipment pause in April, as we develop our mid to longer-term plans”.
The Coventry-based car manufacturer – which also has sites in Solihull and Wolverhampton – said the US is an “important market for JLR’s luxury brands”. More cars are exported to the US from the UK than any other good. In a 12-month period up to the end of the third quarter of 2024, the trade was worth £8.3bn, according to the UK trade department.
An initial wave of tariffs on cars came into effect from 3 April, with import taxes on auto parts due to follow next month. A separate 10% tariff will be imposed on all other UK imports, with higher rates in place for some other major economies. Global stock markets have incurred heavy losses in recent days as firms grapple with how to adapt to the new trading environment.
The FTSE 100 – which measures the performance of the 100 leading firms listed on the London Stock Exchange – plummeted by 4.9% on Friday, its steepest fall since the start of the pandemic. Exchanges in Germany and France also saw similar declines. Starmer has said the UK will take a calm approach to the trade tariffs and has ruled out “jumping into a trade war”.
The prime minister spoke to his French counterpart Emmanuel Macron on Saturday, the first of several discussions planned between Sir Keir and European leaders over the weekend. Downing Street said Sir Keir and Macron had agreed “a trade war was in nobody’s interest” but “nothing should be off the table”. On Thursday, the prime minister warned the global economy was “entering a new era” and said there would “clearly” be an impact on the UK.
The government is consulting on products it could impose retaliatory measures on but talks between UK and US officials continue on a possible trade deal which the British governments hopes would see tariffs relaxed. Starmer is holding talks with other European leaders to discuss how to respond to the White House’s trade moves.
A JLR spokesperson said: “The USA is an important market for JLR’s luxury brands. As we work to address the new trading terms with our business partners, we are enacting our short-term actions including a shipment pause in April, as we develop our mid to longer-term plans.”
JLR, which is owned by India’s Tata Motors, is one of Britain’s biggest producers, selling 400,000 Range Rover Sports, Defenders and other models annually. Exports to the US account for almost a quarter of those sales and JLR is at the centre of Britain’s car industry, accounting for £1 in every £8 of the country’s exports.
The Sunday Times reported that JLR is thought to have a couple of months’ supply of cars already in the US, which will not be subject to the new tariffs. Shipping vehicles across the Atlantic takes about 21 days. A pause in shipments will add to fears over the impact of tariffs on Britain’s car industry, which employs about 200,000 people in manufacturing.
The Institute for Public Policy Research (IPPR) thinktank has said more than 25,000 direct jobs in the car manufacturing industry could be at risk as exports to the US are predicted to fall.
The US is the second biggest importer of British-made cars after the European Union, with nearly a 20% share, data from the Society of Motor Manufacturers and Traders (SMMT) shows. Britain has said it is focused on trying to secure a trade deal with Washington. Keir Starmer is expected to spend the weekend speaking to foreign leaders about the tariffs, after calls with the Australian prime minister, Anthony Albanese, and the Italian prime minister, Giorgia Meloni, on Friday in which the leaders agreed that an all-out trade war would be “extremely damaging”.
After the announcement of the tariffs, Mike Hawes, the SMMT chief executive, said: “The announced imposition of a 10% tariff on all UK products exported to the US, whilst less than other major economies, is another deeply disappointing and potentially damaging measure.
“Our cars were already set to attract a punitive 25% tariff overnight and other automotive products are now set to be impacted immediately. While we hope a deal between the UK and US can still be negotiated, this is yet another challenge to a sector already facing multiple headwinds.”
