British engineering giant JCB has warned it could face losses running into the “hundreds of millions of pounds” after the US government unexpectedly broadened tariffs on steel and aluminium, in a move that threatens to upend the company’s North American business.
On Monday, the Trump administration confirmed that the existing 25 per cent tariffs on steel and aluminium components would now apply to finished goods containing the metals. The change means every one of the 30,000 diggers and construction vehicles JCB exports to the US each year will be subject to the levy.
Graeme Macdonald, JCB’s chief executive, called the measures “hugely punitive,” warning that they could force the Staffordshire-based firm to rethink its entire 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 is expected to be far greater than previously feared. JCB had anticipated a $3 million hit under the earlier regime, but now estimates the expanded tariffs will result in losses in the hundreds of millions. Particularly damaging is the fact that the measures will also apply to a newly secured $45 million contract to supply backhoe loaders to the US Marine Corps.
The announcement comes despite JCB’s recent commitment to the American market. The company has pledged significant investment in a new plant in San Antonio, Texas, scheduled to open in 2026. Designed to produce up to 20,000 machines a year, the facility was meant to underpin JCB’s expansion in North America while freeing up UK production capacity for exports elsewhere.
Industry sources said the UK government had been “blindsided” by Washington’s decision, which was not expected during recent tariff negotiations. The Department for Business and Trade is now under pressure to secure exemptions similar to those granted to Rolls-Royce for its aeroengine exports.
A government spokesperson acknowledged the setback but stressed Britain’s position compared to other countries. “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 statement said.
The tariff extension underscores the vulnerability of UK manufacturers reliant on US markets. Analysts warn the move could also hit JCB’s biggest customer, London-listed plant hire group Ashtead, which depends heavily on the company’s machinery for its American operations.
For JCB, the development poses a serious dilemma: either absorb punishing costs or overhaul its transatlantic trade strategy just as it was preparing for one of its biggest expansions in the US.
