Jaguar and Land Rover to suspend US deliveries amid tariff changes, as Britain’s struggling auto industry responds to a 25% tax on vehicle imports.
Jaguar and Land Rover Maker Pauses US Shipments Amid Post-Tariff Plans
The maker of Jaguar and Land Rover cars has paused shipments to the US as Britain‘s struggling auto industry begins to respond to a 25% tax on vehicle imports imposed by President Donald Trump. The pause, which will take place this month, is part of Jaguar Land Rover Automotive’s efforts to address new trading terms with its business partners.
Tariffs are taxes imposed on imported goods by a country's government.
They aim to protect domestic industries, generate revenue, and influence trade balances.
The World Trade Organization (WTO) regulates tariffs under its rules.
Countries can impose tariffs as retaliatory measures or to comply with WTO agreements.
Tariff rates vary widely, from 0% to over 200%.
Importers often absorb tariff costs, which can lead to higher prices for consumers.
Industry Response to Tariffs
Analysts expect other British carmakers to follow suit as the increased tariffs put more pressure on an industry already struggling with declining demand at home and the need to retool 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.
Impact on UK Car Export Market
The number of cars made in the UK 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. The industry is already facing multiple headwinds, and this announcement comes at the worst possible time.
Pre-Tariff Stockpiling
UK carmakers have taken steps to lessen the immediate impact of the tariffs by building stockpiles in the US before the increase took effect. SMMT figures show that exports to the US jumped 38.5% from a year earlier in December, 12.4% in January and 34.6% in February.
Trade Balance
Cars make up a relatively small part of overall trade between Britain and the US, which is heavily weighted toward services. Britain exported 179.4 billion pounds ($231.2 billion) of goods and services to the US in the year through September, with services making up 68.2% of that figure.
The UK’s automotive industry is facing significant challenges, including declining demand at home and the need to adapt to electric vehicles. The recent imposition of tariffs by President Trump has added another layer of complexity to an already challenging situation.
