British engineering giant Rolls-Royce is reportedly preparing to increase manufacturing production in the United States to avoid tariffs imposed by President Donald Trump.
London’s Daily Telegraph reported that Rolls-Royce is currently drafting contingency plans to avoid the impact of trade restrictions imposed by the Trump administration. The plans are said to include ramping up production in America and hiring more workers in the United States.
According to the report, the aerospace and defence company is considering shifting production from countries impacted by the trade war, such as China, Canada, and Mexico, where it currently has around 6,000 workers.
A source told the British broadsheet, “If you are making something in countries like China, then you’ll be looking at whether you can do it in the US instead.”
Additionally, Rolls is also considering potentially shifting production from the UK and Europe should tariffs threaten its manufacturing sites in the regions.
In a message to shareholders, the firm said that trade restrictions “could lead to increased costs and consequently realign the global supply chain”.
“Market exposures are being monitored, and we are adapting supply chain strategies to ensure resilience amid potential protectionist measures and evolving trade dynamics.”
The United States is a critical market for the British firm, accounting for around a third of its global turnover. Top buyers include the U.S. Department of Defence, Boeing, and Lockheed Martin.
Last year, Rolls took in £5.94 ($7.67) billion from its North American operations, compared to £2.6 ($3.36) billion from the United Kingdom and £6.5 ($8.4) billion throughout Europe.
Therefore, it may be advantageous for the company to shift production to the United States amid President Donald Trump’s efforts to rebalance global trade to bring back manufacturing to America.
A Rolls-Royce spokesman said: “We have additional capacity within some of our U.S. operations and continuously seek to explore options to ensure that our global internal supply chain is optimised for delivery to customers in the U.S.”
The report comes ahead of what President Trump has dubbed “Liberation Day” on April 2, when “fair and reciprocal” tariffs will be enacted.
“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,” he said last week.
The Trump White House’s trade actions have already borne some fruit, with major firms such as Apple, Oracle, and Taiwan Semiconductor Manufacturing Co. (TSMC) already announcing billions in investments in manufacturing projections in the United States.
There have also been reports that major car manufacturers, including Honda, Hyundai, Kia, and Audi, are looking at moving production to the U.S. to avoid the impact of tariffs.
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