According to a report in the Financial Times, Jaguar Land Rover (JLR) has suspended all car shipments to the U.S. for the month of April as fallout from President Donald Trump’s sweeping new tariffs spreads across the global auto industry.
The British luxury carmaker, owned by India’s Tata Motors (TATAMOTORS), said in a statement it is “enacting short-term actions including a shipment pause” while reviewing its longer-term strategy. The move comes in response to Trump’s 25% import tariff on foreign-assembled vehicles, which was announced last week. While Mexico and Canada received partial exemptions, the duty affects all other vehicle imports.
Choosing Slovakia was a Bad Move
The U.S. is one of JLR’s largest markets, accounting for nearly a quarter of its global sales. However, the company has no factories in the U.S., making it highly vulnerable to the new tariffs. People familiar with the matter said JLR had previously considered building a plant in the U.S. but instead chose Slovakia before Trump’s first term.
JLR isn’t alone. Automakers across the globe are rushing to adjust. Stellantis (STLA), the maker of Chrysler and Jeep, furloughed 900 U.S. workers after pausing production in Mexico and Canada. Volvo, owned by China’s Geely (GELYF), is now considering adding a second model to its U.S. plant in South Carolina.
Nissan (NSANY) is also rethinking its supply chain. The company said it would stop taking new U.S. orders for two Infiniti models built in Mexico on Friday. It’s also preparing to shift some production of its Rogue SUV from Japan to its plant in Tennessee.
Toyota in the Crosshairs
The situation could worsen. A second wave of tariffs, this time on imported auto parts, is expected to take effect on May 3. Analysts at Wedbush estimate the tariffs could cut U.S. new car sales by up to 20% and increase prices by $5,000 to $10,000 per vehicle.
Even Toyota (TM), the world’s largest automaker, is under pressure. Trump accused Japan of being the “worst violator” in trade, singling out Toyota for selling 1 million foreign-made cars in the U.S. yearly. With factories, suppliers, and consumers all caught in the crossfire, the global auto industry is facing a major reset, and the old model of global supply chains is starting to look like a thing of the past.
