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Jaguar Land Rover has halted all car shipments to the US for a month, in response to US President Donald Trump’s tariffs on vehicle imports causing disruptions in global automakers’ supply chains.
The British automaker has stopped shipments temporarily while it devises a strategy to address the 25% tariffs on vehicle imports. These tariffs apply to all cars assembled outside the US, with some exceptions for Mexico and Canada.
“The USA is a crucial market for JLR’s luxury brands. As we navigate the new trade terms with our partners, we are implementing short-term measures including a shipment pause in April,” the company stated.
Known for producing the Range Rover and Land Rover Defender, JLR, owned by Tata Motors of India, is heavily impacted by the tariffs as it generates nearly a quarter of its sales in the US without any local manufacturing facilities in the country.
Sources familiar with the situation revealed that JLR had previously considered establishing a plant in the US but opted for a plant in Slovakia before Trump’s presidency began.
This move by the British automaker highlights the disruption caused by Trump’s tariffs on the global car industry, which relies on intricate supply chains built on the foundation of free trade.
This development follows Stellantis, the parent company of Chrysler and Jeep, announcing the temporary furlough of 900 employees in the US after suspending production in Mexico and Canada.
The CEO of Volvo, a Swedish automaker, mentioned considering adding production of another car model to its US plant in South Carolina, with a capacity of 150,000 cars per year. The company, owned by Geely of China, recently reappointed former CEO Håkan Samuelsson to navigate the geopolitical challenges arising from the global tariff disputes.
Japan’s Nissan is also exploring options to restructure its supply chains in response to the tariffs.
On Friday, Nissan disclosed that it would not accept new US orders for two models from its Infiniti luxury range manufactured in Mexico. The company also plans to maintain two shifts at a production line in its Smyrna plant in Tennessee, after initially planning to reduce to one shift for cost-saving purposes.
Nissan is said to be considering shifting production of the Rogue SUV from its Japanese plant in Kyushu to Smyrna, although the company declined to comment on these plans.
The reshaping of car supply chains comes amid a sharp decline in equity markets this week, with the S&P 500 experiencing a 10% drop in just two days.
The impact of the tariffs on the auto industry could be substantial, especially if the 25% tariffs on various imported parts go into effect on May 3, in addition to the tariffs on finished cars imposed earlier.
Wedbush analysts estimate that the tariffs could lead to a decrease of up to 20% in new car purchases and an increase of $5,000 to $10,000 in the prices of typical cars for US consumers.
Nissan’s decision to move production out of Japan could be politically sensitive, given the challenges faced by numerous small and medium-sized car suppliers grappling with rising wage costs.
Similarly, JLR’s shipment pause raises concerns about the future of the British car industry, where about one-sixth of all exported cars are destined for the US.
Toyota, the world’s largest automaker, has indicated to suppliers its intention to reduce manufacturing costs in response to the tariffs to prevent price hikes for consumers.
Trump singled out Toyota in his speech unveiling “reciprocal” tariffs, citing the 1 million foreign-made cars the company sells in the US annually. He criticized Japan as the “worst violator” in trade, emphasizing the need for fairer trade practices.
With many Japanese automakers already having plants in the US, there are concerns about the feasibility of significant investment packages due to high costs and labor availability concerns in the country.