- Lower tariffs save JLR jobs in the UK
British Prime Minister Keir Starmer yesterday announced a trade deal between the UK and the US. The agreement reduces tariffs on vehicles exported to America from 27.5% to 10%. The immediate result: hundreds of jobs will be saved at Jaguar Land Rover (JLR), especially at the Solihull plant in central England.
A breath of fresh air for the British car industry
The British ambassador to the United States, Peter Mandelson, confirmed to CNN that this agreement avoids the planned layoffs at JLR. "This deal has saved those jobs," he said. On the company side, CEO Adrian Mardell hailed "a move that will bring greater stability to our industry and the communities that depend on it.
The Society of Motor Manufacturers and Traders (SMMT), which represents the U.K.'s auto industry, also welcomed the diplomatic breakthrough, noting that the deal avoids "an immediate and serious threat" to U.K. auto exporters.
From 27.5% to 10% tariffs
As a result of the agreement, British vehicles shipped to the U.S. will be subject to a reduced tariff of 10% instead of 27.5%, for a limit of 100,000 vehicles per year. This figure is slightly lower than the 102,000 models exported to the US last year, indicating that the limit could be quickly exceeded - a possible quota increase is being considered, according to Starmer.
Critical US market for Jaguar Land Rover
The U.S. market accounts for 32% of JLR's global sales, with 128,988 units sold in the fiscal year ended March 30. When a 25% tariff was introduced on April 3, JLR halted exports to the US before resuming them on May 4 thanks to this new agreement.
By 2024, 27% of the UK's £9 billion of automotive exports to the US will be high-end vehicles. The importance of this market is clear.
Some models still face high prices
However, the Land Rover Defender and Discovery produced at JLR's Slovakian plant (in the European Union) are not covered by the agreement and will continue to face a 27.5% tax. The European Union, for its part, is still trying to reach a similar agreement with Washington.
Some British manufacturers, still uncertain about the management of the quota and who will have to pay the 25% tariff once the limit is reached, prefer not to comment publicly on the agreement.
A context of growth, despite China
Since 2022, UK vehicle exports to the US have increased by 39%, suggesting that the 100,000-vehicle quota could be exceeded as early as this year. For JLR, the US is a lifeline, especially as sales in China have fallen by 10% and 29% in the last quarter alone.