JCB has warned it could lose “hundreds of millions of pounds” after the US government unexpectedly extended tariffs on steel and aluminium to cover finished goods, dealing a blow to one of Britain’s best-known engineering firms.
The Trump administration confirmed on Monday that the 25 per cent tariffs already applied to components would now include all machines exported to the US containing steel or aluminium. The move is expected to hit every one of the 30,000 diggers and construction vehicles JCB ships across the Atlantic each year.
Graeme Macdonald, JCB’s chief executive, described the measures as “hugely punitive” and said they would force the company to rethink its North American strategy. “The tariffs as they now stand are hugely punitive and they catch every machine that we ship to the US,” he said. “It will make us have to reconsider how we trade with North America.”
The impact dwarfs earlier forecasts. JCB had anticipated a $3 million hit under the previously flagged tariff regime, but now expects losses in the hundreds of millions. Particularly galling for the Staffordshire-based manufacturer is that the tariffs will also apply to a $45 million contract it secured last week to supply backhoe loaders to the US Marine Corps.
The blow comes despite JCB’s recent pledge to invest in the US by opening a new plant in San Antonio, Texas, capable of producing 20,000 machines a year. The facility, due to open in 2026, was intended to support expansion in North America while freeing UK capacity for exports to Europe and the Middle East.
JCB has urged the UK government to intervene and seek an exemption similar to that secured by Rolls-Royce for its aeroengines. Industry insiders said the Department for Business and Trade had been “blindsided” by the new measures, which were not anticipated during recent tariff negotiations.
While the UK has avoided the 50 per cent levies imposed on steel and aluminium goods from other countries, thanks to an existing trade deal with Washington, ministers conceded that the expansion of Section 232 tariffs had taken them by surprise.
A government spokesperson said: “Thanks to our trade deal with the US, the UK is still the only country to have avoided 50 per cent steel and aluminium tariffs. But we are committed to going further to give industry the security they need, protect vital jobs, and put more money in people’s pockets. We will continue to work with the US to get this deal implemented as soon as possible and in industry’s best interests.”
The tariff expansion highlights the vulnerability of UK manufacturers heavily reliant on exports to the US. Ashtead, the London-listed plant hire group and JCB’s largest customer, is expected to be among those most affected.
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JCB warns of huge losses as new US tariffs hit British exports