The UK automotive sector is navigating choppy waters. This time, it’s not COVID, a semiconductor crunch or Brexit, but tariffs. New US trade policies, including a 25% levy on imported cars and parts, will compound existing pressures on a sector already navigating tight margins, decarbonisation deadlines, and a fragile global supply chain. These levies will hit UK manufacturers particularly hard, especially as the US remains the country’s largest single export market, worth £186.7 billion in 2023.[1]
Simon Thompson, VP Northern Europe at JAGGAER
In this article, Simon Thompson, VP Northern Europe at JAGGAER, discusses how technology can ease the pain of the imposition of US tariffs.
With the UK’s official economic forecaster warning that such tariffs could shave up to 1% off national growth, the scale of disruption is serious.[2] The automotive sector, which exported over 101,000 vehicles worth £9 billion to the US in 2024, [3] will be disproportionately affected. On top of that, UK manufacturers that import American-made parts such as specialist drivetrains or electronics could see their costs balloon, with price increases cascading through the supply chain and possibly passed on to the consumer.
The stakes are high and Jaguar Land Rover, for one, has already paused shipments while it reviews the implications of potential tariffs.[4] While government lobbying is underway, OEMs and Tier 1 suppliers must focus on what’s within their immediate control: mitigating the commercial impact using the smartest tools available. That’s where supply chain technology comes into play.
As the complexity of global trade escalates, procurement and logistics teams can’t afford to rely on siloed legacy systems, disconnected spreadsheets, or manual processes. Automated supply chain systems are already capable of generating real-time customs documentation, tracking changes in import/export duties, and simulating the financial impact of trade policy shifts. AI-enabled platforms go even further, offering predictive insights and recommending action plans based on up-to-the-minute geopolitical developments.
With the US tariffs potentially taking effect as soon as this year, manufacturers will need this level of agility just to stay operational, let alone competitive.
One key challenge of the new tariff regime is how quickly and frequently the rules might change. As trade negotiations unfold, customs codes, exemptions, and duty thresholds may be updated in near real-time. Manual tracking is simply not feasible for organisations with hundreds or even thousands of Stock Keeping Units (SKUs) moving across borders.
At the same time, automotive manufacturers still need to ensure that they are continuing to keep track of the sustainability credentials of supplier base. This means knowing where every part originates, how it’s transported, and what border it crosses, and being able to pivot quickly to an equally sustainable item, if any part of that journey becomes unviable due to trade sanctions or levies.
Image: JAGGAER
Tech-enabled supply chain visibility platforms provide exactly that. Whether it’s evaluating the risk of sourcing electronic modules from a US-based supplier or identifying which production line will be impacted by tariff-hiked imports, transparency gives decision-makers the confidence and agility to respond with speed.
Furthermore, these tools help manufacturers identify previously hidden dependencies — for example, a sub-supplier in the US making a critical component for an EU-based part. That’s exactly the kind of hidden exposure that could turn into a margin-killer if left unaddressed.
Another often overlooked area where AI is proving invaluable is contract management. Tariffs will inevitably affect supplier agreements, from pricing structures and delivery schedules to penalty clauses. Reviewing and renegotiating these contracts manually is time-consuming and prone to error.
AI-driven contract analysis tools can rapidly review thousands of documents, highlight affected clauses, and suggest renegotiation terms based on real-time economic conditions. This kind of intelligent automation allows legal and procurement teams to respond to policy changes in days, not months.
The industry is watching closely for new developments. Industry bodies such as the SMMT are lobbying hard for a government support package or diplomatic resolution, but as negotiations drag on, manufacturers cannot afford to wait. Those who act quickly to digitise procurement, automate compliance, and gain end-to-end supply chain visibility will be best placed to absorb the shock, protect margins, and emerge stronger on the other side. For an industry used to adapting under pressure, the message is clear: now is the time to treat supply chain technology not as an IT project, but as a strategic imperative.
[1] ONS, https://www.ons.gov.uk/
[2] BBC, UK car firms urge help as Trump tariffs loom, 28th March 2025, https://www.bbc.com/news/articles/crlxl34gznxo
[3] Ibid.
[4] The Guardian, Jaguar Land Rover pauses US shipments to assess impact of Trump’s tariffs, April 5th 2025, https://www.theguardian.com/business/2025/apr/05/jaguar-land-rover-us-shipments-trumps-tariffs
