Anand Menon: Brussels may levy post-Brexit trade tariffs
The European Union has been slammed by European car manufacturers over incoming tariffs on electric vehicles.
The tariffs dictate a car must have 45 percent of its parts originate from the UK or EU.
If cars do not comply with the rules of origin, the manufacturers will be hit with 10 percent tariffs.
Mercedes Benz chief Ola Källenius said the rules would pose a “major challenge” to the competitiveness of the European car industry.
Meanwhile, the German car industry’s lobby group VDA called for the EU to “urgently make adjustments” to the regulation.
It said the European battery industry had not developed fast enough to handle the tariffs, as they would place “a significant competitive disadvantage for the European car industry in relation to its Asian competitors in the so important UK market.”
The EU has also faced calls to delay the start date of the post-Brexit legislation, which is meant to come into force from January 2024.
The European Automobile Manufacturers’ Association said it is “calling on the European Commission to extend the phase-in period for the rules of origin for batteries beyond January 2024, as the establishment of a fully integrated battery supply chain in Europe is simply not taking off quickly enough to keep in line with more restrictive rules.”
Meanwhile, Jaguar Land Rover – which is considering setting up a factory in Dorset – called the timing “unrealistic and counterproductive.”
At the time of the Brexit vote in 2016, Leave advocates hoped German carmakers would step in to EU-UK negotiations to protect their own sales – a wish that has been fulfilled by their most recent intervention over tarriffs.
Downing Street told the Financial Times that ministers are engaging with Brussels in an attempt to extend the 2024 tariff “cliff edge” for carmakers.
A source said: “We have raised it with the European Commission.
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“We recognise it’s a problem, not just for us but for them too. We need to find a solution.”
But an EU official claimed Brussels is “not open to changes to the rules of origin.”
They added: “Stakeholders have been given the time to adapt, and they are advised to use the transition time provided.”
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