Jaguar Land Rover has said its “business is resilient” after US President Donald Trump imposed a 25% tariff on vehicles sent to the US.
The automobile company, which has a plant in Castle Bromwich in Solihull, has released a statement in response to the tariff saying their ‘priorities’ will be to address the new US trading terms.
A Jaguar Land Rover spokesperson said: “Our luxury brands have global appeal, and our business is resilient, accustomed to changing market conditions.
“Our priorities now are delivering for our clients around the world and addressing these new US trading terms.”
This comes after the US president announced a 10% tax on UK goods imported to the US, on top of previously announced tariffs on cars and steel.
The UK and the US were holding intensive negotiations in a bid to secure an economic deal to spare British exporters, but a deal failed to get across the line ahead of the president’s announcement.
There are concerns about how the tariffs will impact the UK economy, as the US is the UK’s largest export partner.
What are tariffs and how do they work?
Tariffs are effectively taxes placed on imports – they can be used to raise revenue for the government or to force people in a country to turn towards local goods by making foreign products more expensive.
Most tariffs are set as a percentage of the value of the goods in question and in general, the importer pays the tariff.
Exporters often have to cut their prices to remain competitive.How will cars be affected?
Whilst the UK car industry had already learned its fate, with a 25% tariff on vehicles sent to the US announced last month, Wednesday’s announcement led to further dismay.
One industry body warned that UK car manufacturers may have to “review output” and reduce the number of vehicles they make in response to a reduced demand.
Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT), described the US president’s announcement as “deeply disappointing and potentially damaging”.
The US president’s policy, which he confirmed on Wednesday, could “completely destabilise the UK car manufacturing industry,” the Institute For Public Policy Research (IPPR) said.
They warned that the tariffs on UK cars could cost an estimated 25,000 jobs in the UK.
Researchers warned that employees at Jaguar Land Rover and Mini are some of the most exposed.
The Society of Motor Manufacturers and Traders Ltd, Chief Executive Mike Hawes said: “The announced imposition of a 10% tariff on all UK products exported to the US, whilst less than other major economies, is another deeply disappointing and potentially damaging measure.
Our cars were already set to attract a punitive 25% tariff overnight and other automotive products are now set to be impacted immediately. While we hope a deal between the UK and the US can still be negotiated, this is yet another challenge to a sector already facing multiple headwinds.
“These tariff costs cannot be absorbed by manufacturers, thus hitting US consumers who may face additional costs and a reduced choice of iconic British brands, whilst UK producers may have to review output in the face of constrained demand.
“Trade discussions must continue at pace, therefore, and we urge all parties to continue to negotiate and deliver solutions which support jobs, consumer demand and economic growth across both sides of the Atlantic.”
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