Jaguar Land Rover (JLR) has announced a suspension of all car shipments to the United States for a month in response to the recent imposition of tariffs by US President Donald Trump on vehicle imports. The disruption to global automakers’ supply chains has prompted the British company to reassess its strategy in light of the 25% tariffs now applied to all vehicles assembled outside the US, with partial exemptions for Mexico and Canada.
In a statement, JLR, whose luxury brands are significantly impacted by the new tariffs, emphasized the importance of the American market. The company stated it is taking short-term measures, including a halt to shipments in April, while adjusting to the new trade conditions with partners.
JLR, owned by India’s Tata Motors, faces considerable exposure to these tariffs as nearly a quarter of its sales occur in the US, without any local manufacturing facilities in the country. Individuals familiar with the topic noted that JLR previously considered constructing a plant in the US but opted to establish another facility in Slovakia before Trump’s presidency began.
The decision by JLR highlights the turmoil ensuing in the global car industry due to the tariffs, which have disrupted complex supply chains previously sustained by free trade. The automaker’s move follows the recent announcement by Stellantis, the company behind Chrysler and Jeep, which furloughed 900 US employees following a temporary halt of production in Mexico and Canada.
Moreover, Volvo’s chief executive disclosed that the Swedish car manufacturer is contemplating adding another model to its South Carolina plant, which has an annual capacity of 150,000 cars. Volvo, owned by China’s Geely, brought back its former CEO, Håkan Samuelsson, to steer the company through the geopolitical challenges stemming from the global tariff conflict.
Japan’s Nissan is also reevaluating its supply chains in response to the tariffs. The company announced it would cease accepting new US orders for two models from its Infiniti luxury line produced in Mexico. Additionally, Nissan plans to maintain two shifts at its Smyrna, Tennessee plant, reversing a previous decision to reduce to one shift to lower expenses.
Nissan has reportedly devised strategies to shift some production of the Rogue SUV from its Kyushu plant in Japan to Smyrna, although the company declined to comment on these plans. The endeavor to modify car supply chains coincides with a steep decline in equity markets, with the S&P 500 dropping 10% over two days.
The tariffs on the automotive sector could have severe repercussions, potentially worsening with the impending implementation of a 25% tariff on various imported parts on May 3. Analysts at Wedbush predict these tariffs could decrease new auto purchases by up to 20% and increase the price of a standard car for US consumers by $5,000 to $10,000.
Nissan’s decision to relocate production from Japan is anticipated to be politically sensitive, given the mounting pressures on small and medium-sized car suppliers, whose profit margins are already strained by rising labor costs.
The pause by JLR is also likely to heighten concerns regarding the future of the British automotive industry, where around one in six exported cars is destined for the US. In response to the tariffs, Toyota, the world’s largest carmaker, has indicated plans to suppliers to cut manufacturing costs to prevent price increases for consumers.
During his announcement of the “reciprocal” tariffs, President Trump specifically criticized Toyota, stating that the company sells 1 million foreign-made vehicles annually in the US. He described Japan as the “worst violator” and implied that trade relations with allies might, in some cases, be more problematic than with adversaries.
Analysts suggest many Japanese automakers, which already possess manufacturing facilities in the US, may be hesitant to embark on major investment initiatives, given concerns over high costs and labor availability in the United States.
