LONDON (AP) — The British maker of Jaguar and Land Rover cars is pausing shipments to the U.S. as it works to mitigate the impact of a 25% tax on vehicle imports imposed by the Trump Administration.
Jaguar Land Rover Automotive, one of Britain’s biggest carmakers, said Saturday that the pause would take place this month.
“The USA is an important market for JLR’s luxury brands,” the company said in a statement. “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.”
The U.K. automotive industry is expected to be hit hard by the new tariffs, which come at a time when British carmakers are struggling with declining demand at home and the need to retool their plants for the transition to electric vehicles.
“The industry is already facing multiple headwinds and this announcement comes at the worst possible time,” Mike Hawes, chief executive of the U.K.’s Society of Motor Manufacturers and Traders, said last week. “SMMT is in constant contact with 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.”
The number of cars made in the U.K. 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.
U.K. carmakers have already taken steps to lessen the immediate impact of the tariffs by building stockpiles in the U.S. before the increase took effect.
SMMT figures show that exports to the U.S. jumped 38.5% from a year earlier in December, 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,’’ said David Bailey, an professor of business economics at the University of Birmingham.
British carmakers shipped 8.3 billion pounds ($10.7 billion) worth of vehicles to the U.S. in the 12 months through September, making cars the single biggest goods export to the U.S., according to government statistics.
But cars make up a relatively small part of overall trade between Britain and the U.S., which is heavily weighted toward services.
Britain exported 179.4 billion pounds ($231.2 billion) of goods and services to the U.S. in the year through September, with services making up 68.2% of that figure.
