Tata Motors shares rally 2%: What does the US-EU trade deal mean for the auto major?

On Sunday, the US struck a framework trade deal with the European Union, imposing a 15% import tariff on most EU goods. The rate is half of the earlier threatened 30%.

US President Donald Trump and European Commission President Ursula von der Leyen announced the deal in Scotland, following months of negotiations.

The 15% tariff also includes cars. The earlier levy on automobiles was at 27.5%. The agreement came before a Trump administration deadline to impose tariffs on August 1.

“I think this is the biggest deal ever made,” Trump told reporters, lauding EU plans to invest some $600 billion in the United States and dramatically increase its purchases of US energy and military equipment.

The US officials said the EU had agreed to lower non-tariff barriers for automobiles and some agricultural products, though EU officials suggested the details of those standards were still under discussion.

Reports suggested that the European Union car manufacturers exported cars worth $46 billion to the US in 2024.

The deal brought some relief to the market investors, as Tata Motors’ Jaguar Land Rover (JLR) has a significant market share in the US.

In April this year, Tata Motors’s JLR unit had paused shipments to the US. The company had taken the step to mitigate the impact of a 25% tax on vehicle imports imposed by the Trump administration.

“The USA is an important market for JLR's luxury brands. As we work to address the new trading terms with our business partners, we are taking some short-term actions, including a shipment pause in April, as we develop our mid- to longer-term plans,” the company had said.

UK-based Jaguar Land Rover (JLR) had faced a 10% tariff on exports from the UK, as a deal with the US was signed earlier. The UK is no longer a part of the European Union.

The auto major had reported a 9% decline in its total global sales to 299,664 units in the June quarter for FY26. The company had sold 329,847 units in the April-June quarter of FY25. Global wholesale of passenger vehicles was lower by 10% year-on-year (YoY) at 124,809 units in the first quarter.

Jaguar Land Rover dispatches stood at 87,286 units in the April-June quarter, a drop of 11% over the same period last fiscal year.

Global wholesale of all Tata Motors commercial vehicles and the Tata Daewoo range in Q1 FY26 was 87,569 units, a decline of 6% over Q1 of FY25.

Tata Motors shares were trading at ₹688.40 apiece on NSE, rising 0.15%. It has touched an intraday high of ₹700.5 per share, which is 2% higher than the previous close.

The auto company’s share has been under pressure for some time. For a six-month period, it has declined over 5.5%, while year-to-date it has tumbled over 8%.

For a year’s time, Tata Motors’ shares have nosedived 39%. Its market capitalisation stands at ₹2.53 lakh crore.