Brexit tariffs ‘would cost car industry 4.5 billion pounds a year’
LONDON: Brexit-related tariffs would add at least 4.5 billion pounds ($5.6 billion) a year to the cost of car imports and exports between Britain and the European Union, an industry body said, urging Britain to remain in the single market after it leaves the EU.
Britain exported just under 80 percent of the 1.6 million cars it built last year and imported over 85 percent of the 2.6 million cars sold in the country. Without single market access, cars could face World Trade Organization tariffs of 10 percent, unless a special deal is struck for the sector.
The Society of Motor Manufacturers and Traders said on Tuesday that tariffs could add up to 1,500 pounds to the average cost of an imported car and its president told the car body’s annual dinner that the government needed to maintain free trade.
“You, our members, have told us what you want: membership of the single market, consistency in regulations, access to global talent and the ability to trade abroad free from barriers and red tape,” Gareth Jones said.
Britain’s overwhelmingly foreign-owned car industry has been lauded by politicians as a manufacturing success story in recent years, but the sector backed remaining in the European Union and has expressed concern at the prospect of any barriers to trade.
Worries about Britain’s future trading arrangements prompted Nissan to ask for a pledge of compensation for any Brexit-related costs before making a major investment in the country’s biggest car plant last month.
Prime Minister Theresa May has said she wants Britain to have the best possible access to the EU single market, which comprises more than 500 million consumers, whilst controlling immigration, a key concern among many UK voters.
A document photographed in the hands of a Conservative Party official on Monday said Britain would be unlikely to stay in the single market but the government denied on Tuesday that the notes accurately reflected its plans for forthcoming EU divorce talks.
If it loses full access to the single market, Britain may still hope to reach special deals for key sectors like car manufacturing to avoid WTO tariffs on EU trade.
Supporters of Brexit have long argued that British-built cars would not be subjected to tariffs as the large number of French and German models sold in Britain would mean neither side would want to impose any financial barriers to trade.
Popular continental brands such as Volkswagen, Peugeot and Renault do not build in Britain.