US president Donald Trump today dropped the existing 25 percent tariffs on imports of British cars to 10 percent in a move that could provide a lifeline for luxury carmakers.

For Jaguar Land Rover especially, today’s tariff carve-out could be highly welcome, perhaps even essential. The UK company was facing the prospect of $27,000 price hikes on some high-end Range Rover models and had put a pause on its UK Jaguar sales until 2026and temporarily halted exports to the US following the tariffs. The US will also be the key target market for Jaguar's relaunch EV, the first vehicle being based on the Type 00 revealed in Miami at the end of last year.

The crucial caveat on this tax cut, however, is that it applies only to the first 100,000 cars imported from the UK. This could cover the lion’s share of the UK car industry’s exports to the US if they do not grow: According to the UK’s Society of Motor Manufacturers and Traders, British auto factories exported 101,000 cars to the US last year; and in the first quarter of 2025, 30,200 cars have been shipped from the UK to the US. Most of these exports are made up of premium or luxury cars.

JLR’s own figures show it sold almost 95,000 cars to North America in the 2023–24 financial year, although some of those will be made in plants outside of the UK. (The company declined to provide WIRED with a breakdown of how many cars are sent specifically from its UK plants to the US. The Land Rover Defender is made in Slovakia.)

The 25 percent tariff on vehicle imports into the US was implemented in early April and was extended to auto parts last week, a move that affected the car market as Britain’s largest export to the US, worth about $12 billion to the UK economy last year.

JLR, owned since 2008 by India’s Tata Motors, relies heavily on exports of its cars to the US. The US market accounts for $8.6 billion of JLR’s $35 billion annual revenues, more than any other global market. The company suspended shipments of its cars to the US throughout most of April, although deliveries recently restarted. The latest batch will arrive around May 20 and will now not include what might have been deal-breaker price hikes.

JLR is the UK’s biggest car manufacturer, employing 38,000 people in several plants, especially in the West Midlands region, historic home to Britain’s car industry. Adrian Mardell, JLR’s chief executive officer, said that the deal secures “greater certainty for our sector and the communities it supports” but did not elaborate on what this means for the company.

About one in four JLR vehicles is sold in the US, including the Land Rover Defender and Range Rover Sport. Rolls-Royce and McLaren were also affected by US tariffs. Still, their higher price points make them less vulnerable to short-term price sensitivity: Essentially, people in the market for, say, a $429,000 Rolls-Royce Spectre, the company’s first electric vehicle, can supposedly afford to pay even more for their luxury fix.

However, last month, Aston Martin, another luxury brand, suspended its exports to the US, saying it would be “currently limiting imports to the US while leveraging the stock held by our US dealers.”

Unlike Mercedes-Benz, which makes cars for the US market in the US—the company has a mammoth plant in Alabama—JLR makes its cars in Europe, a business model that, until today’s carve-out, looked dicey.

William Bain, the head of trade policy at the British Chambers of Commerce, says the US-UK trade deal will be met with a “huge sigh of relief” by British businesses, especially in the steel, aluminum, and automotive industries, which had been “left reeling” by Trump’s protectionist tariffs.

Auto companies have been holding cars at Baltimore Port as tariffs take effect.

Photograph: Win McNamee/Getty Images

Late last year, the brand unveiled its Type 00 concept EV as part of its complete rebrand and shift from internal combustion to electric-only autos. This muscular electric supercar with an elongated Art Deco silhouette is most attuned to a US audience. It was unveiled at an event in Florida, and its dimensions—5 meters long, just under 2.5 meters wide, and 1.3 meters high—make it impractical for generally narrower European roads.

Sales of JLR’s present range have dropped by two-thirds in five years, and having to factor in the planned 25 percent tariffs on cars destined for the US must have been a major concern for the company’s executives.

The tariff carve-outs, while not a full-fat trade deal, are of immense symbolic importance for the UK, and UK prime minister Kier Starmer was keen to portray his government as a savior of the British car industry.

Visiting the India-owned JLR plant in the West Midlands last month, Starmer described the Coventry-based company as “our leading exporter of goods,” manufacturing cars that made him “proud to be British.” Starmer told assembled workers then that the British government would “back [them] to the hilt” and described tariffs as a “huge challenge to our future” with “global economic consequences [that] could be profound.”

Visiting the plant again today, and from where he held a video conference with Trump, Starmer said the partial deal was “an incredible platform for the future.”

Speaking in front of car assembly plant workers, Starmer said the deal “reduces massively from 27.5 percent to 10 percent of tariffs on the cars that we export—[which is] so important to JLR, actually to the sector generally, but JLR in particular, who sell so many cars into the American market.”

The carve-out for British exports—excluding most food, which is a sore point in the UK, with consumers steadfastly opposed to imports of US “chlorine-washed” chickens and hormone-fed beef (US secretary of agriculture Brooke Rollins said at the Oval Office press conference that the deal is “going to exponentially increase our beef exports” but likely not of the hormone-fed variety)—is being lauded as a Brexit benefit by those in favor of the UK exiting the European Union and who believe the UK should cleave more to the US.

Writing on his social media website, Truth Social, in the early hours and ahead of the deal’s official unveiling in the Oval Office, President Trump wrote that the trade agreement with the UK, a “big, highly respected country,” is a “full and comprehensive one that will cement the relationship between the United States and the United Kingdom for many years to come.”

According to a board on “reciprocal tariffs” displayed in the Oval Office the UK would be reducing its tariffs on the US from 5.1 percent to 1.8 percent. A White House fact sheet on the “Historic Trade Deal” says it will “usher in a golden age of new opportunity for US exporters and level the playing fields for American producers.”

The two sides worked to agree to lower tariff quotas on steel and autos exported from the UK. In return, Britain agreed to lower its tariffs on US cars. It’s also expected that the UK will spike a 2 percent digital sales tax that impacts US tech titans such as Meta, Google, Apple, and Amazon.

European automakers, especially German ones, may well be peeved that the Trump administration, for now, continues with its threat to impose 25 percent tariffs on cars made in the EU. In 2018, Trump told French president Emmanuel Macron that he wanted no more Mercedes rolling down New York’s Fifth Avenue. Then, in November last year, German chancellor Angela Merkel told Italian news outlet Corriere Della Sera that Trump was “obsessed with the idea that there were too many German cars in New York.”

European automakers will be looking on jealously while preparing to move forward with an EU-wide deal. Stellantis, Volvo, and Mercedes withdrew their financial guidance for the year last month, blaming the uncertainty around changing US policy on import levies. Stellantis is headquartered in Amsterdam but is also partly American, and it is an example of how many car brands are now comingled internationally. It owns Fiat of Italy but also Chrysler and other supposedly all-American brands Dodge, Jeep, and Ram Trucks.

The US is the number one export destination for EU-made cars. In 2023, European car manufacturers exported $58 billion worth of vehicles and components to the US, accounting for 20 percent of the EU’s total automotive export value and supporting almost 14 million European jobs.

Trump’s tariff war isn’t just impacting overseas automakers. General Motors has warned of an up to $5 billion hit from the levies, despite Trump offering relief to carmakers to soften the impact of his tariffs. Yesterday Volvo announced that it would cut 5 percent of jobs at its Charleston, South Carolina, factory as it continues to assess the impact of the tariffs.