Jaguar Land Rover is building a factory in China. Its first factory outside of the UK. The reasons are many but trade policy may be at the centre.
China maintains significant tariff and non-tariff trade barriers on imported automotive vehicles and parts. Since China has become the number one market for JLR, the imports of all vehicles and all service parts into China may have become untenable. .
There remains significant uncertainty surrounding the Brexit negotiations and what the trade situation will be for the U.K. post-Brexit. Uncertainty is never a good thing in such multi-billion pound investments. With Germany, Korea, and Canada all in the top 10 markets for JLR and all with trade preferences in place on U.K.-origin goods due to FTAs under the EU umbrella, diversifying production beyond the U.K. is smart business and a necessity.
Brexit may have been originally motivated by nationalist and protectionist sentiments but it's becoming more clear that its impact will have the opposite affect than that intended. More jobs leaving the UK. More manufacturing jobs leaving the U.K. in particular. Note also that JLR’s parent company is India’s Tata Group.
So explain to me again how global trade hurts domestic economies and results in job loss? I didn't think so…🤔