The maker of Jaguar and Land Rover cars is pausing shipments to the U.S. as Britain's struggling auto industry begins to respond to the 25% tax on vehicle imports imposed by President Donald Trump.
Jaguar Land Rover Automotive, one of Britain’s biggest carmakers, said Saturday that the pause would take place this month.
“The USA is an important market for JLR’s luxury brands,” the company said in a statement. “As we work to address the new trading terms with out business partners, we are taking some short-term actions including a shipment pause in April, as we develop our mid- to longer-term plans.”
Analysts said they expect other British carmakers to follow suit as the increased tariffs heap more pressure on an industry that is already struggling with declining demand at home and the need to retool their plants for the transition to electric vehicles.
“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 number of cars made in the U.K. dropped 13.9% to 779,584 vehicles last year, according to the SMMT. More than 77% of those vehicles were destined for the export market. U.K. factories export cars such as Nissan's Qashqai and Juke, BMW Mini, and Toyota Corolla, as well as Land Rover and Jaguar models.
“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. “SMMT is in constant contact with the 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.”
U.K. carmakers have already taken steps to lessen the immediate impact of the tariffs by building stockpiles in the U.S. before the increase took effect. SMMT figures show that exports to the U.S. jumped 38.5% from a year earlier in December, 12.4% in January and 34.6% in February.
"This was manufacturers like JLR trying to get ahead of the game in terms of getting inventory to the U.S. before the tariffs were implemented,'' Bailey said.
British carmakers shipped 8.3 billion pounds ($10.7 billion) worth of vehicles to the U.S. in the 12 months through September, making cars the single biggest goods export to the U.S., according to government statistics.
But cars make up a relatively small part of overall trade between Britain and the U.S., which is heavily weighted toward services.
Britain exported 179.4 billion pounds ($231.2 billion) of goods and services to the U.S. in the year through September, with services making up 68.2% of that figure.
President Donald Trump announced a 25% tariff on all auto imports, including cars built in Mexico and Canada. But even if you aren’t in the market to buy a new car, you may still feel the impact. Edmunds’ head of insights Jessica Caldwell shares what you need to know.
