Jaguar Land Rover, the company behind the well-known British car brands, is stopping shipments to the U.S. this month. This comes as a response to the 25% tax on car imports put in place by President Donald Trump, affecting Britain’s already struggling car industry.
Jaguar Land Rover, one of the top car manufacturers in the U.K., explained the pause in a statement: “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 taking some short-term actions including a shipment pause in April, as we develop our mid- to longer-term plans.”
Experts believe other carmakers in Britain may soon do the same, as the new tariffs add to existing problems, like falling demand in the local market and the pressure to upgrade factories for electric car production.
“I expect similar stoppages from other producers as firms take stock of what is unfolding,” said David Bailey, a business economics professor and automotive expert at the University of Birmingham.
According to the Society of Motor Manufacturers and Traders (SMMT), the U.K. produced 779,584 cars last year, a drop of 13.9%. Over 77% of those cars were meant for export. U.K. factories produce models like the Nissan Qashqai and Juke, the BMW Mini, the Toyota Corolla, and various Jaguar and Land Rover vehicles.
New cars are parked at Royal Portbury DocksMike Hawes, chief executive of SMMT, said last week, “The industry is already facing multiple headwinds and this announcement comes at the worst possible time. 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.”
To reduce the effect of the tariff hike, U.K. carmakers started sending more cars to the U.S. in advance. According to SMMT, exports to the U.S. rose by 38.5% in December compared to a year earlier, 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.
Over the 12 months ending in September, British carmakers exported £8.3 billion ($10.7 billion) worth of cars to the U.S., making vehicles the largest goods export from the U.K. to the U.S., according to government data.
However, cars still make up only a small part of the trade relationship between the two countries. The U.K. exported £179.4 billion ($231.2 billion) in goods and services to the U.S. over that same period, with services accounting for 68.2% of the total.
