► JLR pauses US imports in wake of Trump tariffs
► Carmakers undecided on how to deal with cost
► All cars made outside the US face 25% tariff
Audi is the latest car manufacturer to halt importing cars into the United States, as car brands work out how to overcome Donald Trump’s new 25 per cent tariffs on imported cars. The brand is heavily influenced by the US tariff situation, as its models are either build in Europe or Mexico.
Reuters reports that the brand has 37,000 cars in stock, equivalent to around two months of stock for the country. The news follows on from Jaguar Land Rover (JLR) that, too, is pausing shipments to the US.
It comes as global automotive manufacturers respond to a significant shake-up in the second largest car market in the world, leaving some firms footing the bill and others unsure of how to proceed.
While JLR is the first to announce a temporary pause of imports, others are expected to follow. All new foreign cars brought to the US now face a 25 per cent levy, introduced on April 3, rather than the 10 per cent tariff applied to other goods.
In a statement, JLR said: “The USA is an important market for our luxury brands. As we work to address the new trading terms with our business partners, we are enacting our planned short-term actions, including a shipment pause in April, as we develop our mid- to longer-term plans.”
The Lotus Emira has also been impacted, with US owners awaiting their cars taking to forums to say that vehicles are further delayed because of ‘globally sourced parts’. Lotus has been approached for comment.
CAR has also asked other British car manufacturers, such as Mini, Aston Martin and McLaren, to see what impact the tariffs are having on them and their customers. The US is the second largest export market for the UK automotive industry after the European Union.
A Bentley spokesperson said the company had ‘no plans to pause imports’ to the carmaker’s largest market, but that it was ‘still undecided’ as to whether to absorb the 25 per cent tariff itself or pass this on to customers through the cost of the car.
While Morgan’s sports car sales are small fry compared to others on this list, the US is still one of its biggest export markets. The British firm said it wasn’t planning on pausing shipments, but that it had a ‘number of cars on the water already that will land and be subject to the tariffs’.
A spokesperson added that it was talking to its dealers and customers about ‘sharing the tariffs’ but that the Morgan Motor Company (MMC) was ‘taking the burden’.
‘For customers going forwards, we have changed margin structures and price of options to help mitigate the full tariff cost, sharing it between MMC, dealers and some burden to the customer.’ they added.
Hyundai’s president and CEO Jose Munoz last week said at the Seoul Mobility Show that the company had ‘no plans to raise prices in the United States’ and that its car prices would ‘always remain competitive’.
The UK government has also softened its ZEV mandate and subsequent electric vehicle targets in response to Trump’s tariffs. Fines for non-compliant vehicles have been reduced, while full hybrid vehicles, including the UK-built Toyota Corolla, can now be sold in the period between 2030 and 2035.
Prime Minister Keir Starmer said: ‘Global trade is being transformed so we must go further and faster in reshaping our economy and our country through our Plan for Change.
‘Today I am announcing bold changes to the way we support our car industry. This will help ensure home-grown firms can export British cars built by British workers around the world and the industry can look forward with confidence, as well as back with pride.’
‘What we are going to be doing is a 25 per cent tariff on all cars that aren’t made in the United States,’ says Trump while at his desk in the Oval Office when initially announcing the measures. ‘We started off with a 2.5 per cent base – that’s where we’re at – and we’ll go to 25 per cent.’
Trump says enacting these tariffs will mean ‘incentivising companies – and even countries – to come into America and build.’
Tesla, led by Elon Musk who has a role in Trump’s government, will be affected, too. Musk confirmed on X: ‘Important to note that Tesla is NOT unscathed here. The tariff impact on Tesla is still significant.’
Others, meanwhile, have already been busy increasing their stake in US manufacturing. Hyundai Motor Group, for example, has recently announced $21bn in investment and has opened up ‘Metaplant America’ in Georgia that’s designed to assemble both cars and batteries for EVs for Hyundai, Kia and Genesis vehicles.
On top of that, the President announces that his government intends to offer interest relief on those looking to buy a new car that’s US-made. ‘If you borrow money to buy a car, you will be allowed to deduct interest payments for the purposes of income tax, but only if the car is made in America.’
Canadian Prime Minister, Mark Carney, says the tariffs are ‘a very direct attack,’ according to the Associated Press.
European Commission president, Ursula von der Leyen, says in a statement: ‘tariffs are taxes – bad for businesses, worse for consumers equally in the US and the European Union.’ That is, of course, after von der Leyen led initiatives to impose tariffs on cars from China that reach the EU.
Not everyone is displeased, though. United Auto Workers, a huge union for car industry employees in the United States, applauded the news. UAW president, Shawn Fain, says ‘ending the race to the bottom in the auto industry starts with fixing our broken trade deals, and the Trump administration has made history with today’s actions.’