Jaguar Land Rover is pausing shipments to the US as it works to “address the new trading terms” in the wake of Donald Trump’s 10 per cent tariff on British goods coming into force.
Sir Keir Starmer was expected to spend the weekend making back-to-back phone calls to world leaders about the tariffs, after talking with the Australian prime minister, Anthony Albanese, and the Italian PM, Giorgia Meloni, on Friday. In those calls the leaders agreed that an “all-out trade war would be extremely damaging”.
Sir Keir was “clear the UK’s response will be guided by the national interest” and officials would “calmly continue with our preparatory work, rather than rush to retaliate”, a No 10 spokesperson said.
On Saturday afternoon, Jaguar said it was “taking some short-term actions including a shipment pause in April, as we develop our mid- to longer-term plans”.
JLR stressed that the US is an “important market” for its cars, and the difficult decision comes as businesses continue grappling with the new trade rules, and the fallout on the global stock markets.
The prime minister has so far been reluctant to retaliate after Mr Trump imposed the tax on UK exports to the US, promising instead to take a “cool-headed and pragmatic approach” to the conflict.
And, with business groups backing the PM’s approach so far, he is holed up this weekend on diplomatic calls as world leaders coordinate their response to the tariffs.
The standard 10 per cent US tariff on goods imported from around the world came into effect shortly after 5am on Saturday UK time. Other countries will see their tariff rates increase above that next week, including the EU, which will be hit with a 20 per cent rate.
A 25 per cent tax on all imported cars came into effect on Thursday.
The start of what promises to be a trade war saw the FTSE 100 suffer its worst day since the start of the pandemic, falling 4.95 per cent on Friday. Global markets also tumbled, with Wall Street’s Dow Jones index dropping 5.5 per cent and European and Australian stocks plummeting.
In the latest of his calls with world leaders, Sir Keir spoke with French president Emmanuel Macron on Saturday, with the pair agreeing a trade war “is in nobody’s interests”.
But, in a sign the pair are prepared to ramp up their response to the US president, a Downing Street spokesman said they agreed “nothing should be off the table”.
The spokesperson added: “The prime minister and president also shared their concerns about the global economic and security impact, particularly in South East Asia.”
Downing Street also said that in Sir Keir’s talks with Mr Albanese and Ms Meloni on Friday, he had “been clear the UK’s response will be guided by the national interest”.
A spokesperson said officials will “calmly continue with our preparatory work, rather than rush to retaliate”.
The spokesperson added: “He discussed this approach with both leaders, acknowledging that while the global economic landscape has shifted this week, it has been clear for a long time that like-minded countries must maintain strong relationships and dialogue to ensure our mutual security and maintain economic stability.”
Sir Keir will make further calls to counterparts around the world over the weekend, while talks about a trade deal with the US are ongoing.
Business secretary Jonathan Reynolds said he hopes a new trade agreement with the US will see the 10 per cent tariff rate on the UK lowered or dropped altogether. Officials had hoped a deal could be struck before the tariffs came into force, but will continue trying to strike a deal in the coming days and weeks.
Mr Reynolds also warned ministers will look at “possible retaliatory action” as officials work through 417 pages of products they could target in a list that includes everything from bourbon whiskey to motorbikes.
Mr Reynolds, who set a deadline of early May for the consultation, said any action would be “paused” if a trade deal was struck.
Chancellor Rachel Reeves said on Friday the government is “determined to get the best deal we can” with Washington.
“Of course, we don’t want to see tariffs on UK exports, and we’re working hard as a government in discussion with our counterparts in the US to represent the British national interest and support British jobs and British industry,” the chancellor said.
The Liberal Democrats have said that the government’s “attempts to appease the White House” are not working, and called on ministers to coordinate a response with allies.
“We need to end this trade war as quickly as possible,” Lib Dem foreign affairs spokesman Calum Miller said.
He added: “The best way to end this crisis is to stand shoulder to shoulder with our European and Commonwealth friends. We must coordinate our response and strengthen our trading relations with our reliable allies. That’s how we can protect our economy from Trump’s bullying.”
In a post on TruthSocial, Mr Trump said the United States needed to “hang tough” in the face of the trade changes.
“Big business is not worried about the Tariffs, because they know they are here to stay, but they are focused on the BIG, BEAUTIFUL DEAL, which will SUPERCHARGE our Economy,” he wrote.