Carmakers mull action over tariffs as JLR pauses car exports to US

Jaguar Land Rover has announced it will "pause" all shipments to the US as it works to "address the new trading terms" after tariffs were imposed earlier this week.

A 25% levy on car imports came into force on Thursday, one of several measures announced by US President Donald Trump which have sent shockwaves through global supply chains.

The US is the second largest export market for the UK's car industry, after the European Union.

In a statement, a Jaguar Land Rover spokesperson said the company was "taking some short-term actions including a shipment pause in April, as we develop our mid to longer-term plans".

The Coventry-based car manufacturer - which also has sites in Solihull and Wolverhampton - said the US is an "important market for JLR's luxury brands".

More cars are exported to the US from the UK than any other goods. In a 12-month period up to the end of the third quarter of 2024, the trade was worth £8.3bn, according to the UK trade department.

An initial wave of tariffs on cars came into effect from 3 April, with import taxes on auto parts due to follow next month.

Car maker Nissan is thinking about moving some of its production of US-bound vehicles from Japan to the US as early as this summer, financial newspaper Nikkei has reported.

Earlier this week Nissan said it would keep two production shifts at its plant in Tennessee, after announcing plans to scale back operations there in January.

Meanwhile, carmaker Stellantis has said it will temporarily shut down its assembly plant in Windsor, a Canadian city on the US border, next week due to the new tariffs.

The United Auto Workers union - which represents those working in car manufacturing in the United States and southern Ontario, Canada - has applauded the introduction of tariffs, saying the move "signals a return to policies that prioritise the workers who build this country, rather than the greed of ruthless corporations"

A separate 10% tariff will be imposed on all other UK imports, with higher rates in place for some other major economies.

Global stock markets have incurred heavy losses in recent days as firms grapple with how to adapt to the new trading environment.

The FTSE 100 - which measures the performance of the 100 leading firms listed on the London Stock Exchange - plummeted by 4.9% on Friday, its steepest fall since the start of the pandemic.

Exchanges in Germany and France also saw similar declines.

Sir Keir Starmer has said the UK will take a calm approach to the trade tariffs and has ruled out "jumping into a trade war".

He warned "the world as we knew it has gone" but said he was prepared to use industrial policy to "shelter British business from the storm".

Writing in the Sunday Telegraph, Sir Keir said he will continue to seek a trade deal with the US to avoid some tariffs, but mooted state intervention to protect the national interest.

Sir Keir is holding talks with other European leaders to discuss how to respond to the White House's trade moves.

The prime minister spoke to his French counterpart Emmanuel Macron on Saturday, the first of several discussions planned between Sir Keir and European leaders over the weekend.

Downing Street said Sir Keir and Macron had agreed "a trade war was in nobody's interest" but "nothing should be off the table".