New Delhi, July 24 -- Jaguar Land Rover (JLR) is staring at a fresh wave of geopolitical and policy-driven turbulence, with China slapping a 10% tax on most luxury cars and the European Union (EU) proposing tariff relief only for automakers that manufacture in the US. For the Tata Motors-owned brand, which does not have a manufacturing base in the US, these twin developments could complicate recovery efforts and further squeeze profit margins.

Starting July 20, China imposed 10% luxury consumption tax on cars priced over 900,000 renminbi. This covers most of the models sold in the Chinese luxury car market. Earlier, only cars priced above 1.3 million renminbi attracted the levy from the Chinese government.

The timing of the twin hits co...