Jaguar Land Rover (JLR) is hitting pause on all car shipments to the US. Why? Because new tariffs introduced by Donald Trump are shaking up the global car trade.
From Thursday, a 25% tax now applies to all foreign cars entering the US. On top of that, a broader 10% tariff on other imported goods came into force on Saturday.
JLR says it needs time to figure out how to deal with the new rules. "The USA is an important market for JLR's luxury brands,' the company said in a statement" the company said. "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."
This news comes as global markets take a hit. The UK car industry is feeling the pressure, especially with falling demand at home and the costly shift to electric vehicles.
Mike Hawes, who heads the Society of Motor Manufacturers and Traders, put it bluntly: "The industry is already facing multiple headwinds and this announcement comes at the worst possible time."
Last year, UK car production fell nearly 14%, with over 77% of those cars destined for export—many of them to the US. In fact, cars are the UK’s biggest export to America, worth around £8.3 billion in just 12 months.
Some carmakers tried to soften the blow by rushing shipments to the US before the tariffs kicked in. But there's still a lot of worry—especially in places like Solihull, home to one of JLR’s biggest factories and over 9,000 workers.
Locals are scared. Former industry consultants and retired engineers say the knock-on effects could be massive, potentially costing jobs and damaging the wider community that depends on JLR.
Trump’s move is part of a bigger push to get car companies to move production to the US. But JLR doesn’t currently build any cars in America, making it one of the most vulnerable brands affected by the tariffs.
The UK government says it's trying to strike a deal with Trump to soften the blow, but also warned it’s considering retaliatory tariffs if things don’t change soon. For now, officials are staying calm and keeping options open.
Meanwhile, Trump defended the decision with his usual bravado, claiming the US had been taken advantage of by other countries for too long. He even said Keir Starmer, the UK’s Prime Minister, was “very happy” with the new tariffs — though there’s no real sign that’s true.
Financial markets didn’t take it well. The FTSE 100 had its worst trading day since the start of the pandemic, dropping nearly 5%. The Dow Jones in the US also tanked, and China fired back with its own 34% tariff on US goods starting April 10.
Economists warn this could slow down the UK’s already struggling economy even more. There’s even talk that the Bank of England may cut interest rates to try and keep things steady.
All in all, JLR’s decision to pause US shipments shows just how seriously the car industry is taking this. And with tensions rising, this could just be the start of a much bigger global trade showdown.
