Jaguar Land Rover (JLR), the British luxury car manufacturer, announced on Saturday that it will temporarily halt shipments to the United States in April. The company is responding to the 25% tariff on vehicle imports that was imposed by the Trump administration, as it works on long-term strategies to mitigate the financial impact of the new trade conditions.
“The USA is an important market for JLR’s luxury brands,” the company stated. “As we work to address the new trading terms with our business partners, we are taking some short-term actions, including a shipment pause in April, while developing our mid-to-longer-term plans.”
The UK automotive sector is expected to feel the brunt of these tariffs, with British carmakers already grappling with declining domestic demand and the need to upgrade plants for the transition to electric vehicles, as AP reported.
“The industry is already facing multiple headwinds, and this announcement comes at the worst possible time,” said Mike Hawes, CEO of the UK’s Society of Motor Manufacturers and Traders (SMMT). “SMMT is in constant contact with government and will be looking for trade discussions to accelerate as we need to secure a way forward that supports jobs and economic growth on both sides of the Atlantic.”
In 2023, UK car production fell 13.9% to 779,584 vehicles, with more than 77% of those cars destined for export. To combat the impending tariff impact, UK carmakers, including JLR, have been stockpiling vehicles in the US ahead of the tariff increase. This proactive strategy led to a 38.5% increase in exports to the US in December, 12.4% in January, and 34.6% in February.
David Bailey, a business economics professor at the University of Birmingham, noted, “This was manufacturers like JLR trying to get ahead of the game in terms of getting inventory to the US before the tariffs were implemented.”
Despite these efforts, the new tariffs on vehicles could significantly affect the UK car industry’s export strategy. The US remains a vital destination for British-made vehicles, with car exports valued at £8.3 billion ($10.7 billion) over the 12 months through September, according to government statistics. However, cars make up a small portion of the overall trade between the two countries, which is dominated by services.