Industry News: Jaguar Land Rover Gets Lifeline in the form of a UK Tariff Exemption

[Drew Dowdell]

The United States and United Kingdom have reached a deal on vehicle import tariffs into the U.S. that could serve as a model for future deals between the U.S. and other countries. 

As part of a larger trade deal, the UK will get preferential treatment on auto tariffs for the first 100,000 vehicles imported.  Import tariffs, which started on April 3rd for UK vehicles, are currently at 25-percent and will be reduced to 10-percent on that first 100,000 units annually.  The U.K. conversely agreed to lower its tariffs from 5.1-percent to 1.8-percent. The U.S. also dropped tariffs on U.K. steel.

While 10-percent on vehicles is still four times the 2.5-percent charged prior to April 3rd, it is likely to still be a lower tax than those levied on many vehicles imported from Mexico or Canada that contain only 50-percent U.S. made parts.

The 25-percent Tariffs on auto parts appear to remain in place.

While Jaguar and Land Rover are the obvious benefactors of this trade agreement, Nissan has manufacturing facilities in the U.K. that could be utilized for production in North America.  Previously, the Nissan plant in Sunderland, England produced the Infiniti QX30 for North America.  The plant currently produces the Nissan Juke and Nissan Qashqai (Rogue Sport), neither of which are still sold in the U.S.  Honda closed their UK manufacturing facility in 2021.

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[G. David Felt]

I can see this deal helping Jaguar Land Rover as I would be surprised if they sold 100,000 autos in the US.

@drew, do you know if they do or not?

As for any mass produced auto that sells well, I cannot see this deal being that great.

[smk4565]

First 100,000 total cars or first 100,000 per manufacturer?  Still 10% is higher than the old 2.5% so prices will go up, from before.  And if this is foreshadowing, are they going to put a 10% tariff on the first 100k cars from Mexico and Canada?  And it used to be 0, so no matter what, the 2026 car prices are going way up.

[Drew Dowdell]

2 hours ago, smk4565 said:

First 100,000 total cars or first 100,000 per manufacturer?  Still 10% is higher than the old 2.5% so prices will go up, from before.  And if this is foreshadowing, are they going to put a 10% tariff on the first 100k cars from Mexico and Canada?  And it used to be 0, so no matter what, the 2026 car prices are going way up.

First 100k from the UK. The fact that there’s only one major manufacturer in the UK that exports in volume kinda makes it moot. 

[smk4565]

2 hours ago, Drew Dowdell said:

First 100k from the UK. The fact that there’s only one major manufacturer in the UK that exports in volume kinda makes it moot. 

Mini and Rolls is probably 30k units a year.  Land Rover is the most since Jaguar is near zero at this point.  It could create a weird race for BMW to push out a year's worth of Mini's in Q1 to try to beat Land Rover to get the lower tariff.

[G. David Felt]

3 hours ago, smk4565 said:

Mini and Rolls is probably 30k units a year.  Land Rover is the most since Jaguar is near zero at this point.  It could create a weird race for BMW to push out a year's worth of Mini's in Q1 to try to beat Land Rover to get the lower tariff.

No matter what, this is a terrible deal and I honestly see no reason for it as while #47 can say it is a great deal as he got 1.8% on U.S. products, the world is turning their back on his Bully approach to others and even if some U.S. manufacturers are able to sell into the U.K., eventually this will become U.K. saying they are being abused by the U.S. as the Tariff is higher to get into the U.S.

All a matter of semantics, but no matter what, the U.S. standing has been tarnished, and it will take decades to rebuild the relationship as even this deal will be questioned due to the inconsistent way this administration flip flops on things based on the whim of a child man.

[Drew Dowdell]

9 hours ago, smk4565 said:

Mini and Rolls is probably 30k units a year.  Land Rover is the most since Jaguar is near zero at this point.  It could create a weird race for BMW to push out a year's worth of Mini's in Q1 to try to beat Land Rover to get the lower tariff.

Most US Minis are built in Austria.