Why Jaguar Land Rover workers in West Midlands are pinning hopes on government trade talks over Trump's shocking tariffs

Around 25,000 jobs have been put at risk in the UK auto industry in the wake of the tariffs, with potentially worrying times ahead for workers at the region's big car manufacturers.

Eight in every 10 cars produced in Britain are exported, with high-end manufacturers much more reliant on the US market to secure sales.

Midlands car-maker Jaguar Land Rover is believed to be the biggest exporter of cars to the US from the UK.  In total, UK passenger car exports to the US were worth £7.6 billion in 2024. 

The Coventry-based firm, which has huge manufacturing bases alongside the M54 near Wolverhampton and Telford as well as in Solihull, was putting a brave face on it this morning, stressing the brand's 'resilience' in the face of the tariffs in a brief 21-word statement.

"Our luxury brands have global appeal and our business is resilient, accustomed to changing market conditions," said a JLR spokesperson. 

"Our priorities now are delivering for our clients around the world and addressing these new US trading terms."

Warwickshire-based Aston Martin employ around 3,200 people globally but announced a 5% reduction in its workforce earlier this year, while Malvern luxury car company Morgan employs a much smaller workforce of around 250 people in the region.

Aston Martin generated around a third of its £1.6bn revenue for 2024 in the US, outstripping the revenue it made in the UK and Asia Pacific combined.

According to the Society of Motor Manufacturers and Traders(SMMT), the automotive manufacturing industry employs some 198,000 people directly and 813,000 in total across the wider sector.

Prof David Bailey, of  Birmingham Business School,  says the  West Midlands is the "number one exporting region" of cars to the US.

As well as JLR, Aston Martin and Morgan, there is Bentley, which is based in nearby Crewe, as well as Rolls Royce which has a site in Solihull.

He said:  "It is the kind of premium and luxury end of things that are really affected, they have sold very well in the United States," Prof Bailey said. 

He described JLR as "the jewel in the crown" of the UK car industry and said one in four of its cars were currently sent to the US.

"The US is the second biggest market for the UK's industry after the European Union," Prof Bailey continued.

"Cars are the UK's number one goods export to the United States. This is a real problem for the industry," he told the BBC.

Mike Hawes, Chief Executive of the SMMT believes the costs are likely to be passed on to customers, resulting in a "reduced choice of iconic British brands" for the US market.

"The announced imposition of a 10% tariff on all UK products exported to the US, whilst less than other major economies, is another deeply disappointing and potentially damaging measure," he said. 

"Our cars were already set to attract a punitive 25% tariff overnight and other automotive products are now set to be impacted immediately. While we hope a deal between the UK and US can still be negotiated, this is yet another challenge to a sector already facing multiple headwinds.

"These tariff costs cannot be absorbed by manufacturers, thus hitting US consumers who may face additional costs and a reduced choice of iconic British brands, whilst UK producers may have to review output in the face of constrained demand. Trade discussions must continue at pace, therefore, and we urge all parties to continue to negotiate and deliver solutions which support jobs, consumer demand and economic growth across both sides of the Atlantic."

Pranesh Narayanan, research fellow at policy thinktank the  Institute for Public Policy Research (IPPR) said the imposition of a 25% tariff will put "extreme pressure" on the UK car manufacturing industry, potentially threatening jobs and economic growth. But he added that the UK was now "well placed" to take advantage of an upturn in electric vehicle sales.

“Trump’s tariffs have huge potential to completely destabilise the UK car manufacturing industry, affecting tens of thousands of jobs and putting the government’s growth plans at jeopardy," he said.

"However, as one door closes another one opens. There is huge untapped potential in manufacturing green planes, trains and automobiles and selling them at home and abroad. If the government use the upcoming industrial strategy to drive investment in these sectors, this could be the spark that leads to thousands of new consumers to start buying British and buying green."

JLR in particular will be hoping to tap in to that untapped potential, having announced a £15 billion plan to go all-electric in 2023. That was followed by a huge investment in the company's manufacturing works in the region, at Wolverhampton and Solihull, which is ongoing.

At Prime Minister's questions this week, Kier Starmer said a potential trade war with the USA was in "nobody's interest" and said the government would be taking a "pragmatic approach" to a trade deal.

“Constructive talks are progressing to agree a wider economic prosperity deal with the US. That is why we are working with all industries and sectors likely to be impacted," he said.

“Our decision will always be guided by our national interests, and that’s why we have prepared for all eventualities, and we will rule nothing out.”

And while the industry's long term prospects undoubtedly lie in electric production, the UK's car makers will be waiting with baited breath to see if the Government can negotiate a better deal with a protectionist US administration in order to secure their short term future.