Trump trade war threat to West Midlands car industry
Jaguar Land Rover, which makes its engines in the Black Country, could find itself caught in the crossfire of a trade war between Europe and the USA.
President Donald Trump's proposal for tariffs on steel and aluminium imported from Europe – aimed at protecting the USA's own steel industry – has now seen him threatening to slap additional taxes on the import of cars from Europe.
As well as hitting German car makers like BMW and Mercedes-Benz, that threatens Jaguar Land Rover's access to one of its biggest global markets. The USA and Canada account for more than a fifth of Jaguar Land Rover's 490,000 sales worldwide in its financial year so far – second only to the Chinese market.
It would also be bad news for another West Midlands carmaker – Aston Martin. The resurgent luxury sportscar firm has just unveiled its first profits for a decade after soaring sales partly driven by rising demand in North America.
And it would also threaten hundreds of West Midlands component manufacturers that supply car makers both in the UK and in Europe.
President Trump has said the US "will simply apply a tax" on cars made in Europe if the European Union retaliates against the trade penalties he is seeking on imports of steel and aluminium.
The EU is promising retaliation against American exports if Mr Trump follows through on his idea – as he says he will this week.
Mr Trump responded on Twitter: "If the EU wants to further increase their already massive tariffs and barriers on US companies doing business there, we will simply apply a Tax on their Cars which freely pour into the US. They make it impossible for our cars (and more) to sell there. Big trade imbalance!"
Adding to the cost of luxury Jaguar and Land Rover cars would almost certainly hit demand in the US. And it would not be good news for the launch of the newest Jaguar, the all-electric Ii-Pace, which goes on sale this month.
With sporting performance – 0-60 mph in 4.5 seconds – and a 298 mile range for its lithium-ion battery, the car's price starts from £63,495 and JLR will be hoping to win a significant slice of the US executive 'green' car market, up against rivals such as Tesla, as the company moves towards a more electric-powered future.
Just to add to the bad news, Jaguar Land Rover took a harder hit than most to its UK sales in February, according to the latest figures from the Society of Motoring Manufacturers and Traders (SMMT).
Even in a traditionally slow month for the West Midlands-based company, it took a 15 per cent hit to both its Jaguar and Land Rover brands.
Like most carmakers it will have taken a blow as the public turns away from diesel vehicles, but JLR's engine factory on Wolverhampton's i54 site makes both diesel and petrol engines.
Now the busiest and most productive car engine factory in the UK – it produced more than 300,000 engines last year – the £1bn plant is undergoing a transformation as it is doubled in size to 2 million sq ft. Although JLR is remaining tight lipped on industry speculation is that the newest building will house production of hybrid engines.
