No-deal Brexit will see 10 per cent tariff on cars imported from EU
Official guidance suggests vast majority of new cars in the UK will attract an extra charge
Cars imported into the UK from the European Union will attract a 10 per cent tariff if the country crashes out of the EU without a deal.
After Theresa May’s Brexit deal was defeated in the Commons last night, the government has published temporary tariffs that will come into force in the event of a no-deal Brexit.
The scheme will see zero tariffs applied to 87 per cent of goods, but imports of cars from the EU will have a 10 per cent tariff – the maximum rate currently imposed by the EU on cars imported from outside the European Union.
This could see thousands of pounds added to the price of a typical vehicle – and manufacturers aren’t likely to absorb the extra cost. The Volkswagen Group has already said it would pass the additional 10 per cent on to customers, while its performance brand Porsche pre-empted the tariffs by announcing that an identical surcharge could be applied.
The UK builds around 1.5 million cars each year but 1.2 million of them are exported. That means the vast majority of the two million-plus vehicles bought in 2018 were imported.
On the plus side for UK car manufacturing, however, was the news that car parts won’t be subject to import tariffs. This should mean that manufacturing in the UK can stay competitive, although potential delays at the border are still a sticking point for large factories that operate on a ‘just-in-time’ delivery system.
Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, said the announcement “does not resolve the devastating effect a ‘no-deal’ Brexit would have on the automotive industry.”
He continued: “No policy on tariffs can come close to compensating for the disruption, cost and job losses that would result from ‘no deal’.
“It’s staggering that we are in this position with only days until we are due to leave. Every day ‘no deal’ remains a possibility is another day companies pay the price in expensive contingency measures. ‘No deal’ must be taken off the table immediately and permanently.”
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