Car makers stopping shipments to the US amid tariff trouble as Aussie dollar falls

Automotive tariffs in the United States have had an almost instant global impact – with car makers including British brand Jaguar Land Rover ‘pausing’ shipments amid the chaos.

The 25 per cent automotive tariffs on all cars brought into the US came into effect at midnight on 3 April 2025.

They’re in addition to so-called ‘reciprocal tariffs’ applied to specific countries’ goods coming into the United States.

For Jaguar Land Rover (JLR) – which has been owned by Indian giant Tata since 2008 – that means a 10 per cent tariff on top of the automotive 25 per cent whack on cars it manufactures in the United Kingdom (UK).

It also builds cars in Brazil – subject to a 10 per cent tariff – as well as Austria and Slovakia, included in 20 per cent tariffs applied to all countries in the European Union.

“The USA is an important market for JLR’s luxury brands,” the car maker said in a statement.

“As we work to address the new trading terms with our business partners, we are enacting our short-term actions, including a shipment paid in April, as we develop our mid- to longer-term plans.” 

While BMW, Mercedes-Benz and Audi have factories in the US, JLR’s only facility in North America is a Research centre in Portland, Oregon. 

Its other factories include China, which supplies the Chinese market and would be subject to a 34 per cent tariff on top of the 25 per cent if they were shipped to the US – as well as an assembly plant in India. 

India has a 27 per cent ‘reciprocal tariff’ in addition to the automotive tariff for imports into the US.

Around 20 per cent of JLR’s global annual sales are in North America – with the brand posting a 94 per cent year-on-year increase in 2024 selling 94,994 vehicles there.

Yet given it’s s a low-volume car maker – selling a relatively small 431,733 vehicles globally last year – the cost of setting up manufacturing in the US may not make as much sense as brands such as Toyota, which sell more than 10 million vehicles each year.

The Jaguar brand is also in the midst of its most significant transformation since it changed from SS Cars to officially become ‘Jaguar’ in 1945.

The rejuvenated Jaguar plans produce even fewer cars, at higher prices and greater profit per vehicle, aiming to become an upmarket rival to brands such as Bentley and Porsche.

Audi, too, is in the midst of refreshing its line-up after slow sales globally – and is also looking to push further upmarket – but has also stopped shopping Mexican-made models to customers due to the new tariffs.

Mexico was not given any additional tariffs on 3 April, but Mexican-made cars are still subject to the 25 per cent automotive tariffs despite a Free Trade Agreement (FTA) it has with the US.

Audi builds the Q5 SUV – its most popular model in the US – at the San Jose Chiapa plant in Mexico, where 144,223 cars were made in 2024.

While some Mexican-made cars get a break from the tariffs if they use enough US-made parts, the Q5 does not qualify for any concessions. 

Steps by other car makers include iconic US brand Chrysler pausing its Canada production, where it builds the Pacifica/Voyager people-mover -the only model it currently offers in US new-car showrooms. 

In response to the tariffs, Chrysler’s parent company Stellantis also furloughed 1000 workers in the US, including factories in Michigan and Indiana.

Nissan-owned luxury brand Infiniti has paused Mexico production of its QX50 and QX55 SUVs for US showrooms, manufactured alongside the Mercedes-Benz GLB at the joint-venture factory, too.

The future of the factory – and the Infiniti models it builds – is now in doubt, but the GLB may become a US-made vehicle instead with Mercedes-Benz looking to ramp up production in US factories, including its Alabama plant.

Impacts on Australian showrooms are yet to be understood, with the value of the Australian dollar – falling drastically upon the Australian Stock Exchange (ASX) opening 7 April 2025 – expected to heavily influence new-car prices.