Confirmed: 10% import tax on new European cars announced

Brexit sees government switch to World Trade Organisation rules, tariff on new EU cars could change if deal is struck

Cars imported into the UK from European Union countries will be subject to a 10% import tariff from the start of next year, the government has confirmed. 

Revealed by the Department for International Trade as part of its wide-reaching announcement on the country’s post-Brexit trade tariffs, the default to World Trade Organisation (WTO) terms means cars built within the EU will be subject to the same tariff rate as cars from elsewhere in the world. 

Currently, there is zero import levy applied to EU-built models. The 10% levy will apply unless the UK is able to strike a trade deal with Brussels before this date. 

The UK government sees tariffs on sectors such as the automotive industry as essential to “help support businesses in every region and nation in the UK to thrive”, including manufacturing. Jaguar Land Rover is one brand that could benefit as prices of dominant premium German opposition are hiked up. 

It is unlikely that EU manufacturers will be able to absorb the additional cost, meaning in most cases it will be passed on to consumers. Porsche, for example, confirmed last year that customers would have to pay 10% more for its models under a no-deal Brexit. 

Contrasting to the retained 10% levy on imported cars, Secretary of of State for International Trade Liz Truss has actually reduced  or removed current tariffs on a number of products, including dishwashers and freezers, cooking products, sanitary products and Christmas trees. Over £30bn of imports will see tariffs removed in total, the government claims.

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