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Rolls-Royce Explores Shifting Engine-Making To US To Counter Trump Tariffs

Bosses draw up emergency plans after warning of 'rising protectionism' under new US president

Rolls-Royce could hire more American workers to lessen the impact of tariffs

Rolls-Royce may seek to hire more American workers to dampen the impact of tariffs Credit: Rolls-Royce

Luke Barr Assistant business editor. Melissa Lawford Economics Reporter

23 March 2025 7:00am GMT

Rolls-Royce is preparing to ramp up production in the US as it seeks to counter damage wrought by Donald Trump's escalating trade 

war.

The UK engineering giant is drawing up emergency contingency plans to lessen the impact of tariffs, which is likely to involve 

hiring more US workers and expanding its North American operations.

Bosses are racing to complete a review after the US president slapped levies on Canada, China and Mexico, while also issuing 

threats against the UK and Europe.

To avoid the most damaging effects of the trade war, Rolls is exploring how much production can be transferred from the targeted 

countries to the US, where it employs 6,000 workers across 11 sites.

This will allow Rolls to take on more new work without being subject to tariffs.

Rolls warned investors earlier this month about the impact of "rising protectionism", which has been brought about by Mr Trump's 

return to the White House.

A source said the Derby-based manufacturer was "tipping the balance" towards the US in response to the tariffs.

"If you are making something in countries like China then you'll be looking at whether you can do it in the US instead, " they 

said.

Tariffs to hurt UK growth

Effect of US tariffs on UK GDP

Percentage points difference from base

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NiGEM simulations

This will no doubt be seen as a victory for Mr Trump, who has said tariffs will boost American manufacturing, protect jobs and 
improve the economy.

It comes ahead of the president's "liberation day" on April 2, when Mr Trump plans to reset global trade by unleashing reciprocal 
tariffs on countries around the world.

"We're getting back to some of the wealth that very, very foolish presidents gave away because they had no clue what they were 

doing, " Mr Trump said last week.

While Rolls is only considering moving production out of countries currently hit by tariffs, the company cannot rule out 

transfers from UK and European sites should the White House expand its trade war.

In a warning to shareholders, Rolls said tariffs against key trade partners "could lead to increased costs and consequently 
realign the global supply chain".

It said: "Market exposures are being monitored, and we are adapting supply chain strategies to ensure resilience amid potential 

protectionist measures and evolving trade dynamics."

The so-called feasibility assessment is currently being carried out at Rolls, which will determine how much the company can 

increase capacity in the US.

"It will enable us to look at the art of the possible, " said a Rolls insider.

Rolls generated £5.94bn of its revenues in North America last year, up from £4.67bn the year prior.

America accounts for a third of the company's total turnover, with the US Department of Defence, Boeing and Lockheed Martin among 
its largest clients.

US aerospace giant Boeing is among Roll-Royce's largest clients Credit: Edgar Su/REUTERS

The nature of its supply chain is that many products made in the US are destined for US customers, meaning they will not be hit 
with export tariffs.

"If we're delivering it in the States then we will try to make it in the States, " the source added.

In recent years, Rolls has ramped up investment across its US operations, including $1bn in its Indianapolis site.

Outside of the US, Rolls generates £2.6bn of revenues in the UK and £6.5bn in Europe last year.

A Rolls spokesman said: "We have additional capacity within some of our US operations and continuously seek to explore options to 
ensure that our global internal supply chain is optimised for delivery to customers in the US."

It comes amid warnings of the impact that the UK will suffer if the president follows through with this threat to impose tariffs 
on the EU.

John Denton, secretary general of the International Chamber of Commerce (ICC), said: "If you end up with blanket 25pc tariffs on 
Europe and you see Europe move into economic contraction, potentially a recession, the UK would be a loser."

Taken as a bloc, the EU is the UK's largest trading partner, buying 41pc of its exports in goods and services combined.

The US, which is the UK's largest individual trading partner, buys 22pc of the UK's exports.

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"Trump Derangement Syndrome" Is a Real Mental Condition
All you need to know about "Trump Derangement Syndrome," or TDS.
"Trump Derangement Syndrome (TDS) is a mental condition in which a person has been driven effectively insane due to their dislike 
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Justin Raimondo, the editorial director of Antiwar.com, wrote a piece in the Los Angeles Times in 2016 that broke TDS down into 
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The history of Trump Derangement Syndrome actually goes back to the early 2000s - a time when the idea of Trump as president was 
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