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U.S. issues new tariff threat, this time against British-built cars

WASHINGTON — Britain is the United States' closest ally but their long friendship may be sorely tested as the two countries try to forge a new trade agreement after Britain's exit from the European Union. U.S. Treasury Secretary Steven Mnuchin said on Saturday in London that he was optimistic that a bilateral deal with Britain could be reached as soon as this year. But Mnuchin gave up no ground after a second meeting with his UK counterpart, Sajid Javid. Javid has insisted that Britain will proceed with a unilateral digital services tax, despite a U.S. threat to levy retaliatory tariffs on British-made autos. Mnuchin told reporters after Saturday's meeting that such taxes would discriminate against big U.S. tech companies like Alphabet Inc's Google, Apple, Facebook and Amazon. The UK Treasury declined to comment on the private meeting. The divide highlights the challenges ahead as the Trump administration seeks a new bilateral agreement with Britain, part of a broader push to rebalance relations with nearly all its major trading partners. The stakes are high — British Prime Minister Boris Johnson has pegged the trade deal with United States as a way to ease the pain of breaking with Europe, Britain's largest trade partner. U.S. President Donald Trump, has promised a "massive" trade deal to support Brexit, the product of a populist movement similar to his "America First" agenda. The goodwill and special relationship the two countries have enjoyed for decades may not count for much, experts say. "Trump is not going to be doing Johnson any favors," said Amanda Sloat, a senior fellow with the Brookings Institution in Washington. "He's not going to give him a trade deal without major concessions." Even before the digital tax issue arose, the Trump administration threatened to tax foreign car imports, which could hit British-made Jaguar, Land Rover, Mini, and Honda Civic hatchback cars. Stiff U.S. trade demands include increased access for U.S. farm goods, concessions that will be difficult for Britain's entrenched natural food culture to swallow. The United States also wants Britain to change the way its National Health Service prices drugs and allow in more U.S. pharmaceuticals, which could prove politically unpopular for Johnson's government. Washington's demand that London block Chinese telecoms equipment maker Huawei Technologies Co Ltd for national security reasons could also cloud talks.

The Jaguar E-Pace shows off a rather cab-forward look in these spy shots

It seems the Jaguar F-Pace may be getting a little sibling soon. A smaller crossover, which we expect will be called the E-Pace, has been caught during winter testing. The SUV seen here appears to be sized like compact luxury crossovers such as the Audi Q3 and BMW X1. This also fits with Jaguar's brand director's statements that it has been considering an SUV for this class. Much of the car is well camouflaged, but taking a close look, this E-Pace has a surprisingly short dash-to-axle ratio. It's not as drastic as the electric I-Pace concept, but there's so little space between the bumper and the base of the windshield that we sincerely doubt that a longitudinal inline-4 or V6 could be lurking under the hood. And, if the E-Pace does in fact use a transverse-mounted engine, it probably doesn't share a platform with any of its rear-drive-based stablemates. It may seem strange that a company known for its rear-drive cars is considering a transverse, front-drive-based vehicle, but there are reasons it may be going this way. For one thing, Jaguar's brand director said he wasn't sure that the company's existing platforms could be scaled down far enough for such a compact crossover. That would seem to preclude using an existing rear-drive platform or developing a totally new one. In fact, it only leaves one real option in the Jaguar Land Rover line for this vehicle: the Range Rover Evoque platform, which is also shared with the Discovery Sport. It's a small SUV platform with a transverse layout. It's also currently available and should be cheap to adapt; perfect for capitalizing on the hot crossover market. We just hope Jaguar can inject some more fun into it than Land Rover did with the Discovery Sport. Using that platform also means Jaguar would probably borrow one or more engines from the Evoque and Discovery Sport. In the US, both models are only offered with a turbocharged 2.0-liter inline-4 making 240 horsepower. Overseas, both vehicles are available with 2.0-liter turbodiesel four-cylinders, making either 150 or 180 horsepower too. Considering that the 180-horsepower diesel model will arrive in the US under the hood of the Jaguar XE, it's possible that it will show up in the E-Pace as well. Don't expect any of the overseas manual transmissions to make the trip, though. Jaguar only offers a manual on the F-Type sports car in the US, so there really isn't any reason to add one to a small crossover.

Jaguar XE SVR to challenge M3, C63 with supercharged V8 power

Jaguar has a healthy powertrain range lined up for its new XE, including an array of four-cylinder engines and a supercharged 3.0-liter six that will, for now, serve as the range-topping offering in the XE S. But Car and Driver claims to have it on good authority that an even more powerful eight-cylinder version is in the works, as well. According to C/D, the XE's engine bay has been designed to accommodate the company's ubiquitous 5.0-liter V8 engine, which in the larger XF is offered in several states of tune, including the XF Supercharged with 470 horsepower, the XFR with 510 hp and the flagship XFR-S with 550 hp. Just which version (or versions) would be offered in the XE remains to be seen, but even in its lowest-spec supercharged form, the 470-hp version would already be enough to challenge the 425-hp BMW M3 and the base 469-hp version of the new Mercedes-AMG C63. If Jaguar wants to take on the C63 S, however, it will need to shoehorn in one of the more powerful versions. In the end, Coventry's new Special Vehicle Operations division may opt to offer two versions, like it does with the XFR and XFR-S. Expect the top version, however much muscle it packs, to wear the British automaker's new SVR badge. It just may take a few years before it does so.