One of the biggest private sector employers in Liverpool city region, Jaguar Land Rover, breathes a sigh of relief amid UK-US tariffs reset this week – but it still faces a hit to its profits. Tony McDonough reports
Carmaker Jaguar Land Rover (JLR) will be breathing a sigh of relief this week as the new UK-US trade deal on tariffs comes into effect.
American is the biggest single market for JLR, which employs more than 3,500 people at its car assembly plant at Halewood in Merseyside. It exports around 100,000 vehicles to the US every year, 25% of its global sales and worth £6.5bn.
Along with other UK carmakers, JLR was stunned earlier this year when US President Donald announced 25% tariffs on imported cars. This caused JLR to temporarily suspend exports across the Atlantic.
However, weeks later the UK and US Governments reached an agreement that would limit tariffs on car imports into the US to 10%. This change saw JLR resume exports to the US.
Those new tariffs have come into effect this week. While it is a relief for the UK automotive sector JLR admitted in mid-June that tariffs will still likely push down its full-year profit margins.
It lowered its fiscal 2026 earnings before interest and taxes margins forecast to 5%to 7% from the previous forecast of 10%. This revised EBIT margin forecast is also below JLR’s reported 8.5% margin for the previous fiscal year which ended March 31, 2025.
The UK is the only country to have secured this deal with the US, saving manufacturers hundreds of millions each year and protecting hundreds of thousands of jobs.
At the same time, the aerospace sector has seen the removal of 10% tariffs on goods such as engines and aircraft parts, helping make companies such as Rolls Royce more competitive and allow them to continue to be at the cutting edge of innovation.
Prime Minister Keir Starmer said: “Our historic trade deal with the US delivers for British businesses and protects UK jobs. From today, our world-class automotive and aerospace industries will see tariffs slashed.
“We will always act in the national interest – backing British businesses and workers, delivering on our Plan for Change.”
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Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, added: “The implementation of the new trading agreement between the UK and US is good news for US customers and a huge relief for the UK automotive companies that export to this critically important market.
“It immediately slashes the punitive tariffs that brought the US export market to a standstill and threatened the viability of some of the most famous names in British manufacturing.
“Securing the deal – the first and, so far, only automotive deal in place with the administration – is a diplomatic coup and provides a foundation on which to grow trade in the future.”