Donald Trump’s tax threat has Jaguar Land Rover worried

Jaguar Land Rover’s latest offering, the I-Pace, is electric. So too are the company’s sales in America.

Last year JLR sold 114,000 cars in the US, a record number.

But if the trade spat between the US and the EU escalates into something more serious then Britain’s biggest car-maker has a lot to lose.

President Trump says trade wars are good and easily won, but the CEO of Jaguar Land Rover disagrees.

"Wars are never good and therefore I hope that every war can be avoided," Sir Ralf Speth told ITV News.

If Trump were to follow through with his threat to raise taxes on imported cars from the EU then Speth believes "it goes without saying" that JLR’s sales would be damaged. The company employs 40,000 people in the UK.

In total, car-makers in the European Union sent 1.1 million vehicles across the Atlantic last year.

But US car-makers only sold 233,000 vehicles in the EU.

Currently the US charges a tariff of 2.5% on cars imported from Europe but the EU hits American cars with a 10% tariff

Germany exports more cars to the US than anyone else in Europe. BMW, Mercedes and VW would be significantly affected by higher tariffs although they’re not keen to talk about them.

The bosses of all three made speeches here at the Geneva Car Show. None mentioned Trump or trade.

The hope appears to be that if you ignore a potential problem it may never come to pass.

Jaguar's new all-electric car the I-Pace. Credit: ITV News

Higher tariffs on imported cars on both sides of the Atlantic are likely to lead to higher prices and even job losses.

Ford is an American company, but it's out of step with its President.

Ford believes America has little to gain from a trade dispute with the EU.

Roelant de Waard, Vice President of Ford Europe, is unsettled by the aggressive language politicians are using, but hopes for the best.

"This could spark a trade war or it could spark higher commodity prices," de Waard told ITV News.

"We are a pro-free-trade company. These things could escalate. We hope that everyone stays wise and it doesn’t."

Once again, Trump is threatening to tear up the rule book. Once again, everyone is trying to work out of he’s bluffing.