Jaguar Land Rover warns US tariffs will hit profit margins
JLR, which is owned by India's Tata, said it expects margins on underlying profits of between 5% and 7% this financial year.
It had previously pointed towards 10% for the year, while it posted an underlying profit margin of 8.5% for the year to March.
Jaguar Land Rover said US tariffs and uncertainty could weigh on trading this year (Matt Crossick/PA)
The firm is the UK's largest employer in the automotive sector, with facilities in the West Midlands and Merseyside building its Range Rover SUV models across the UK.
JLR, which manufactures its Defender models in Slovakia, halted all shipments to the US in April after President Trump's administration imposed an additional 25% tariff on car imports.
It restarted shipments last month after the UK reached an agreement to export 100,000 cars a year to the US at a reduced 10% tariff.
The company told investors it is seeking to offset tariffs by reallocating vehicles 'to accessible markets' and potentially increasing prices in the US.
Free cashflow for this financial year is also expected to be close to zero due to financial pressures, the company added.
Bosses stressed that the company is still committed to its long-term investment plans and still expects a 'resilient financial performance' in the face of wider uncertainty.
Tata Motors shares dropped by 3.8% on Monday as a result.
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NBC News
40 minutes ago
- NBC News
Retailers avoided a worst case scenario in Vietnam. But executives say Trump's trade deal could still hit consumers.
The retail industry is breathing a sigh of relief after it appeared to avoid the worst case scenario on Vietnam tariffs. But some executives believe the tentative trade deal President Donald Trump announced Wednesday is still bad for business and could have a chilling effect on consumer spending. 'It's a lot better news than where we were on Liberation Day,' one CEO of a popular consumer brand told CNBC after Trump said tariffs on Vietnamese imports would be 20%, down from the 46% levy he proposed on April 2, then later suspended. The new rate would be double the 10% duty currently in place. Another executive called the news 'bad' but agreed that a 20% tariff was better than the 46% duty Trump originally imposed, however unrealistic the proposed rate was. 'I guess Trump needs 'positive' news,' a third executive said. 'I think things are going to evolve. Let's see if this is definitive.' Trump's announcement on Wednesday came only days before the 90-day suspension of the steep tariffs he proposed in April expires next week, and as his administration scrambles to strike agreements with dozens of trading partners. Even so, he did not say when the deal with Vietnam would take effect, or whether both sides have agreed to the tariff rates. In the months between Trump's April 2 tariff rollout and his announcement on Wednesday, retail executives in the apparel and footwear industries fretted over the potential that Vietnam imports could face tariffs nearly as high as the cumulative 55% duties for Chinese imports. Over the last decade, some of America's top retailers, including Gap, American Eagle and Nike, have all reduced their reliance on China to shield themselves from both high tariffs and the region's geopolitical turbulence. Many sought refuge in Vietnam, where the factories, some owned by Chinese businesses, are known to produce products at a similar quality and price as China. They also started manufacturing in other countries in southeast Asia, such as Cambodia, Bangladesh and Malaysia. Those countries were facing tariffs of 49%, 37% and 24%, respectively, under Trump's April plan, but are subject to a 10% duty for now. Vietnam is now the second largest supplier for footwear, apparel and accessories sold into the U.S. market, according to the industry trade group the American Apparel & Footwear Association. It has become an essential part of the footwear supply chain, on pace to become the largest supplier of shoes to the U.S. in 2025, according to the Footwear Distributors and Retailers of America, another industry trade group. If Trump's proposed 46% tariff on Vietnam had taken effect, it would mean much of the industry's work to leave China would have been for naught. Some companies are relieved the tentative deal would set the levy at 20% and the announcement agreement is also a sign that Cambodia, Malaysia and Bangladesh could reach similar frameworks. 'Twenty percent is a sigh of relief,' said Sonia Lapinsky, a partner and managing director at AlixPartners who advises fashion brands. 'There's some positivity and some optimism that this is manageable. So at least there's that. This isn't business destroying, which is great. However, this does have real implications, right?' Most companies have plenty of tools to offset the impact of tariffs, such as working with their suppliers to share costs. But to avoid major hits to their profit margins, many including Nike are planning to raise prices. It's still unclear how those hikes will affect consumer spending because it will take time for the increases to trickle down in the supply chain. AlixPartners previously created pricing models for CNBC that examined how the price of Vietnamese-made sweaters and shoes could rise under Trump's proposed tariffs — if retailers do not pass any of the cost on to suppliers or shoppers. At a 10% levy, the cost of a $95 pair of men's shoes could rise by $7.42 to $102.42. With a 20% duty in place, the cost increase would be even larger. Many executives worry any tariff hike of this magnitude will be bad for businesses and consumers. Paul Cosaro, the CEO of Picnic Time, a supplier to top retailers like Target, Kohl's and Macy's, said if the clocks were wound back to April and Trump said there'd be a 20% tariff on Vietnamese imports, 'no one would've been happy.' 'There could be threats of a 46% tariff and you come back with 20 and it's going to sound better but… it's just more money coming out of the consumers' pockets at the end of the day and they have less money to spend on picnic baskets and coolers and things like that,' said Cosaro, who raised his prices between 11% and 14% earlier this year to offset the cost of China tariffs. 'It's not good for the consumer. Ultimately, it's just increasing the prices … I don't think that's good news.'
The Independent
an hour ago
- The Independent
CBS News anchor swipes at parent company for settling Trump lawsuit ‘it said is without basis in law and fact'
John Dickerson ended Wednesday's broadcast of CBS Evening News by subtly swiping at the network's corporate boss Paramount for shelling out $16 million to settle Donald Trump's lawsuit over a 60 Minutes interview, noting that the company itself said the president's case 'is without basis in law and fact.' The veteran anchor's commentary was even more pointed on the show he hosts for the network's streaming platform, as he noted that the settlement 'poses a new obstacle' for the network's journalists. 'Can you hold power to account after paying it millions? Can an audience trust you when it thinks you've traded away that trust?' Dickerson pondered. Journalists and free speech advocates have absolutely pilloried Paramount for capitulating to the media-bashing president in a case that legal experts described as frivolous and the network's own lawyers said was completely without merit, warning that it sets an increasingly dangerous precedent. 'Behavior that gets rewarded gets repeated,' the Foundation for Individual Rights and Expression stated. 'This settlement will only embolden the president to continue his flurry of baseless lawsuits against the press — and against the American people's ability to hear the news free from government intrusion.' Beyond that, the company is facing the threat of civil litigation and congressional probes over allegations that it violated anti-bribery statutes, as Paramount needs the Trump administration to approve its massive $8.4 billion merger with Skydance Media. Paramount, for its part, has insisted that the lawsuit is 'completely separate from, and unrelated to' the transaction and the FCC approval process. At the end of Wednesday's telecast of CBS Evening News, Dickerson delivered a fairly straightforward recap of the settlement and what led up to it, which was the editing of a 60 Minutes interview with then-Democratic presidential nominee Kamala Harris just ahead of the 2024 election. 'Under the terms of the settlement worked out with a mediator, Paramount will pay $16 million to cover Mr. Trump's legal costs. Whatever's left will go to his presidential library. No money will be paid directly to the president,' Dickerson noted. 'The settlement does not require an apology or expression of regret for the editing of the interview, which was done in accordance with long-held CBS News standards and widely accepted journalistic practices.' The news host also pointed out that despite Trump's allegations that CBS ran a different portion of Harris' answer to a question during a Face the Nation promotional clip to make her look better, the network has repeatedly denied this. Additionally, Dickerson explained that the 60 Minutes transcript revealed that the president falsely claimed the network had pulled a response from another question asked of Harris and 'deceptively edited' it in. After telling viewers that a senior Paramount executive told shareholders this week that the corporation only settled to avoid what he called the 'high and somewhat unpredictable costs of legal defense, Dickerson brought up that this took place as the company is looking to close the Skydance merger. 'That deal needs Trump administration approval,' he concluded. 'The corporation said the settlement of the Trump lawsuit is completely separate from and unrelated to the merger. In the end, Paramount decided to settle a suit it said is without basis in law and fact and an affront to the First Amendment.' Over on CBS Evening News Plus, which airs on Paramount's streamers, Dickerson was even less sparing in his criticism of the network's corporate overlords. 'We pride ourselves on our BS detector, so it ought to work on ourselves, too. When it doesn't, the stakes are real, a loss of public trust, the spread of misinformation,' he said in a monologue focused on Paramount's payoff to the president. 'A visitor to our newsrooms might wonder why we debate a single word for so long, why it takes hours to answer the simple question, what is this story about, why there's a cry of frustration when a detail is off by an inch,' Dickerson continued. 'That is what it looks like when it is deeply felt, when the audience's concerns become ours, passed by bucket brigade from the subjects of our stories to correspondents, to producers, to editors, fact-checkers, and writers.' Noting that the 'obstacles to getting it right are many,' he then declared that the settlement 'poses a new obstacle' before asking: 'Can you hold power to account after paying it millions? Can an audience trust you when it thinks you've traded away that trust?' In the end, he pointed out, 'the audience will decide that' and that job of CBS News' journalists is 'to show up' and 'honor what we witness on behalf of the people we witness it for.' The conglomerate, which is hoping to complete its merger later this month, could soon be staring down lawsuits and investigations over claims that it 'bribed' the president in order to push the Skydance deal through. 'Today is a dark day for press freedom. Paramount's spineless decision to settle Trump's baseless and patently unconstitutional lawsuit is an insult to the journalists of '60 Minutes' and an invitation to Trump to continue targeting other news outlets,' Freedom of the Press Foundation said in a statement. The advocacy group is also gearing up to pursue legal action on behalf of shareholders to 'stop this affront' and hold the company's board accountable. Sens. Ron Wyden (D-OR) and Elizabeth Warren (D-MA), who had warned Paramount in May that a settlement could potentially violate laws against bribery, promised to challenge the settlement in both Congress and the courts. 'This looks like bribery in plain sight,' Warren said on Wednesday. 'Paramount folded at the same time it needs Trump's approval for a billion-dollar merger. I'm calling for an investigation into whether any anti-bribery laws were broken, and I'm working on a new bill to rein in this kind of corruption.' Meanwhile, CBS News staffers past and present are expressing despair and fear over what the settlement means for the once-revered network and its newsmagazine, which has already lost two respected newsroom leaders due to tensions surrounding the company's handling of the lawsuit. 'No one is a fan of Shari right now,' one network staffer told The Independent, referencing Paramount chair Shari Redstone, who was the driving force behind the decision to settle. 'People are still angry and frustrated and morale is very low.' Former CBS News correspondent Armen Keteyian called the settlement 'the nadir for the network' and 'a breach of the public trust Murrow, Cronkite, Hewitt and thousands of us worked decades to build.'
Reuters
2 hours ago
- Reuters
US factory orders rebound in May on strong aircraft demand
WASHINGTON, July 3 (Reuters) - New orders for U.S.-manufactured goods surged in May on strong demand for aircraft and business spending on equipment appeared to be strong halfway through the second quarter. Factory orders increased 8.2% after a downwardly revised 3.9% drop in April, the Commerce Department's Census Bureau said on Thursday. Economists polled by Reuters had forecast factory orders rebounding 8.2% after a previously reported 3.7% decline in April. They increased 3.2% on a year-on-year basis in May. Manufacturing, which accounts for 10.2% of the economy, remains constrained by President Donald Trump's aggressive tariffs on imported goods. An Institute for Supply Management survey on Tuesday showed anxiety over trade policy among manufacturers in June, with manufacturers variously describing the business environment as "hellacious" and "too volatile" for long-term procurement decisions. Trump sees the tariffs as a tool to raise revenue to offset his promised tax cuts and to revive a long-declining industrial base, a feat that economists argued was impossible in the short term because of labor shortages and other structural issues. Commercial aircraft orders soared 230.8%. That reflected at least 150 aircraft from Qatar Airways placed with Boeing (BA.N), opens new tab during Trump's visit to the Gulf Arab country in May. Orders for motor vehicles, parts and trailers rose 0.8%. Orders for computers and electronic products increased 1.5%, while those for electrical equipment, appliances and components rose 0.7%. Machinery orders gained 0.4%. The government also reported that orders for non-defense capital goods excluding aircraft, which are seen as a measure of business spending plans on equipment, rebounded 1.7% in May as estimated last month. Shipments of these so-called core capital goods rose 0.4%, revised down from the 0.5% reported last month. Non-defense capital goods orders jumped 49.5%. They were previously reported to have accelerated 49.4%. Shipments of these goods dipped 0.1% instead of being unchanged as previously reported.
