British and European Union officials are scheduled to meet on Wednesday to discuss what happens next with electric vehicle tariffs after Brexit. They’re faced with a decision on whether to delay the imposition of tariffs.
The topic at hand is the “EV rules of origin,” which are part of the trade agreement between the UK and the EU. These rules have become a major point of contention in their post-Brexit relationship. The meeting, held by the UK-EU Trade Specialised Committee, will focus on these rules.
The main issue at stake is whether electric vehicles traded between the UK and the EU will be subject to a 10% tariff starting next year. This tariff will apply if less than 45% of the vehicle’s value is sourced from the region, as outlined in the post-Brexit Trade and Cooperation Agreement.
The automotive industry has voiced concerns, estimating that this tariff could cost the sector around 4.3 billion euros (approximately $4.6 billion) and potentially give Chinese competitors an advantage.
“We’ve been making our case, and we’re continuing to do so because we’re aware that the deadline is approaching. However, I’m optimistic that the right decision will ultimately be made,” said Nus Ghani, the UK’s Industry Minister, during an interview with Bloomberg on Monday.
Lately, electric vehicles have become a significant focus of global trade tensions. The UK is hopeful that the EU will agree to postpone the implementation of tariffs. Part of this hope stems from the EU’s decision to review the impact of Chinese car imports into their market, according to Ghani.
UK Prime Minister Rishi Sunak and European car manufacturers are advocating for a three-year extension to the planned phase-in period. This extension would provide more time for the battery supply chain in the region to develop. Sunak has even sought the assistance of German Chancellor Olaf Scholz in pushing for the tariff delay, as reported by Bloomberg in July.
However, EU officials and member states have been divided on this issue, even after discussing it on Monday, as per information from a knowledgeable source.
