JCB Now Gears Up for a Showdown Over US Tariffs

UK construction equipment giant JCB has issued a stark warning about the financial impact of new US tariffs, estimating costs in the “hundreds of millions” due to recent trade changes.

On August 18, the Trump administration unexpectedly extended its 25% tariffs on steel and aluminium components to include all finished goods imported from the UK to the US. 

This shift broadens the scope of the tariffs under Section 232, which were originally imposed on raw materials. JCB, a privately owned company, is among the firms most affected.

Graeme MacDonald, JCB’s chief executive, described the expanded tariffs as “punitive” in an interview with The Times. He explained that the tariffs apply to every one of the 30,000 construction machines the company exports annually to the US, including a $45 million contract recently awarded to supply backhoe loaders to the US Marine Corps.

“The tariffs as they now stand are hugely punitive and they catch every machine that we ship to the US,” MacDonald said. “It will make us have to reconsider how we trade with North America.”

Despite the difficulties posed by the new tariffs, JCB is pressing ahead with its plans to grow in the US. Earlier this year, the company revealed it would double the size of its new factory in San Antonio, Texas, expanding it to 1 million square feet.

At the same time, JCB has asked the UK government to step in and seek a tariff exemption like the one Rolls-Royce won for its jet engines, hoping to ease trade pressures.

The firm also calls for broader discussions on the tariffs’ future.

A UK government spokesperson acknowledged ongoing efforts, stating: “Thanks to our trade deal with the US, the UK is still the only country to have avoided 50% 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.”

The spokesperson added that the government will continue working with the US to implement the deal as quickly as possible, aiming to serve the best interests of UK industry.

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