As INEOS looks to grow in the US, it must deal with Trump's tariffs and the 'Chicken Tax' on trucks
Enter the INEOS Grenadier. The brainchild of billionaire Jim Ratcliffe, founder of London's INEOS Group, the Grenadier is the spiritual successor of those older British off-roaders.
The rugged Grenadier went on sale in the US last year, and things started well, with decent sales of around 8,000 units, starting at $78,900, and targeted sales growth of 50%. But then, INEOS got hit with President Trump's tariffs.
INEOS builds its vehicles in France, and that means it's under EU trade restrictions and gets hit with a 25% US auto sector tariff, which could be more if the EU doesn't get a deal done with the White House by Aug. 1.
'We find ourselves right in the eye of the storm,' INEOS CEO Lynn Calder told Yahoo Finance. 'So even once there was a tariff deal negotiated ... between the UK and the US, that meant nothing for us.' Currently, UK auto imports to the US "only" face a 10% tariff rate.
Read more: What Trump's tariffs mean for the economy and your wallet
In April, INEOS said it would be capping tariff price increases at 5% on its vehicles. While a 15% proposed tariff on EU goods like autos sounds better than the alternative of 25% and up, a peculiar issue affects INEOS with regard to its latest product, the pickup truck version of the Grenadier known as the Quartermaster.
'The Quartermaster is also a European-made pickup truck that also attracts [a] 'chicken tax.' So we've taken an absolute double whammy on this vehicle, which is a perfect car for the US market,' Calder said.
The "chicken tax" is a remnant of trade policy originating in the 1960s. Following European tariffs on US poultry, the US imposed a 25% tariff on foreign-made light trucks — a trade policy that still stands today. At the time, the tariffs on light-duty trucks were a protectionist measure against Volkswagen (VWAGY).
This means there is a 50% tariff right now on the Quartermaster, Calder said, which currently starts at $92,900.
A quick trade resolution can't come fast enough for European automakers like INEOS. If and when that comes to pass, INEOS can focus on its next offering in the US, the midsize Fusilier SUV, which will come in both EV and range-extending hybrid options and likely have a lower starting price.
And looking beyond that, Calder said the option of building INEOS vehicles in the US is on the table. Assuming it's feasible, the move would make sense for an automaker targeting the lion's share of its sales in the States.
INEOS is going to need all the help it can get.
It is competing in a hyper-competitive luxury SUV market in the US dominated by Cadillac (GM), BMW (BMW.DE), Mercedes (MBGAF), and Land Rover. A hybrid, midsize SUV like the Fusilier, made in the US, would help make INEOS a bigger player in an SUV-crazed market.
Chicken tax or no chicken tax.
Pras Subramanian is the lead auto reporter for Yahoo Finance. You can follow him on X and on Instagram.
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