Range Rover, built in Solihull, is one of JLR’s best sellers in the US
New American president has said the UK is “out of line” when it comes to trade with the US
Predicting which country US president Donald Trump will target with tariffs next is probably a fool’s errand, but the real fool is one who isn’t fully braced for impact.
With that in mind, what is the likely outcome for the British car industry if the US decides to charge companies more for the price of entry?
Trump has said the UK is “out of line” when it comes to trade as part of broader, more visceral rant against the European Union (“they take almost nothing and we take everything from them”).
The comment was strange, given that in 2023 (the most recent year the Office for National Statistics provides figures for), the UK imported more goods from the US than we exported.
That changes, however, when it comes to cars. In 2023, the value of British car exports were £7.8 billion, while the amount of American cars imported had a value of only £1.1bn.
In fact, the US was our biggest car export market by value in 2023, according to the ONS, a long way ahead of the next biggest markets of China, Germany, France and Belgium.
The 2024 figure could be even higher after the US’s appetite for our mainly premium and luxury exports increased, offsetting an alarming sales dip in China.
The UK’s biggest automotive exporter to the US, JLR, saw its sales there climb last year by 29% to 116,294. From that you have to knock off around 33,000 sales of the Slovakian-built Land Rover Defender, but the figure includes more than 50,000 high-value Range Rover and Range Rover Sport models, according to data from Automotive News.
Other exports are higher value still: around 9000 Rolls-Royce, McLaren, Bentley and Aston Martin cars were sold in the US in 2024.
Since the exit of Honda from UK, the only other car maker exporting in any volume is BMW-owned Mini, which sold just over 14,600 examples of the Cooper there last year.
A hypothetical 10% additional tax on top of the 2.5% that car makers already pay in terms of duties to land their products in the US isn’t going to bother the luxury guys, argues Ian Henry, who runs consultancy AutoAnalysis.
“For the super-luxury brands selling £200,000-plus cars, plus the customisation, it won’t make a massive difference,” he told Autocar. “However, Mini and JLR’s smaller models could be badly hit.”
So far, Trump has hinted that a deal with the UK to avoid tariffs could be “worked out” – but nothing is certain with this president.
“I think he will want to differentiate the UK from the EU as a means of increasing division,” Henry said.
JLR avoided referring directly to potential US tariffs on its most recent earnings call (29 January), but CFO Richard Molyneux did register the issue, saying: “Tariffs and a progressive breakdown of global free trade are a concern.”
Trump has complained that Europe doesn’t import American cars, and he’s partly right. The cars Europe does import from the US are mostly those made by European car makers – mainly BMW and Mercedes-Benz but also Volvo.
SUVs from BMW’s vast South Carolina plant and from Mercedes’ Alabama plant are likely to form the bulk of the £1.1bn worth of US car imports to the UK in 2023, along with a handful of Ford Mustangs.
One of Trump’s aims with his tariff threats is to bring more manufacturing to US. However, JLR is unlikely to see value in following its German rivals and moving production there, especially given China’s recent decision to hike import duties on big-engined cars out of the US, reducing its usefulness as an export hub.
Given Brits’ love of premium cars, it’s not a surprise to discover that Germany is far and away the biggest supplier of cars to the UK, with a value of £26.2bn in 2023, followed by China at £5.9bn and France at £5.7bn.
One genuine beef that Trump could raise with the UK and EU is the fact that American cars already pay a 10% import tax ahead of sale on European soil.
BMW CEO Oliver Zipse recently took the opportunity to call for that to be lowered to the same 2.5% that European car makers pay to sell cars in the US, according to a Reuters report.
Ratings agencies S&P and Moody’s both expect EU tariffs on cars to be raised to 10% – a figure that would inevitably raise the price of JLR’s best-selling Defender in the US.
For the UK, however, the best policy is probably one already being employed by prime minister Keir Starmer: flatter the president and pray his attention shifts elsewhere.