Home Economy News UK car industry says failure to clinch Brexit deal could cost $74 billion by 2025

UK car industry says failure to clinch Brexit deal could cost $74 billion by 2025

imageEconomy22 minutes ago (Nov 24, 2020 09:20AM ET)

(C) Reuters. FILE PHOTO: Workers assemble cars at the plant for the Mini range of cars in Cowley, near Oxford

By Nick Carey

LONDON (Reuters) – Britain’s car industry body on Tuesday called on Brexit negotiators to clinch a deal by the end of 2020, saying failure to do so could cost the sector 55.4 billion pounds ($74 billion) in tariffs by 2025 and undercut its ability to develop the next generation of zero-emission vehicles.

The Society of Motor Manufacturers and Traders (SMMT) said a “no deal” Brexit would cut UK vehicle production by two million units over the next five years.

“With scant time left for businesses to prepare for new trading terms, the sooner a deal is done and detail communicated, the less harmful it will be for the sector and its workers,” the SMMT said in a statement.

British and EU negotiators are working to sign a new trade deal by Jan. 1, 2021. Failure to do so could leave car manufacturers paying World Trade Organization (WTO) tariffs on parts and vehicles imported and exported into and out of Britain.

The British car industry group said that WTO tariffs of up to 55.4 billion pounds by 2025 would come on top of the immense cost to UK manufacturers of the coronavirus pandemic.

The SMMT’s appeal for a deal on Brexit comes less than a week after the UK government said it would ban the sale of new petrol and diesel cars and vans from 2030 as part of a “green revolution” to cut emissions to net zero by 2050.

The industry group said WTO tariffs would add an average 2,000 pounds to the cost of British-built electric cars sold in the EU, “making UK plants considerably less competitive and undermining Britain’s attractiveness as a destination for inward investment.”

It said tariffs would add 2,800 pounds to the price tag of an imported EU-built electric car, “all but cancelling out” the UK government’s 3,000 pound zero-emission car subsidy.

($1 = 0.7486 pounds)

UK car industry says failure to clinch Brexit deal could cost $74 billion by 2025

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