Could lower UK tariffs see a huge influx of American cars?

The UK could be on the brink of seeing a huge influx of American cars, after the Government hinted that it might lower import tariffs on vehicles from the US in an attempt to broker a trade deal with President Trump. 

The US currently imposes a 25 per cent tariff on all imported vehicles and vehicle parts, which has had a huge impact on the UK car industry, with JLR having paused exports to the States while it considers the situation.

However, UK Chancellor Rachel Reeves told the BBC: “I want to see tariff and non-tariff barriers reduced between the UK and the US.” Her comment came after it emerged that White House documents circulated among business groups suggested that the UK and US are working on a deal which could see UK import tariffs on American-made cars reduced from the current 10 per cent to just 2.5 per cent.

This could see a significant increase in the numbers of American-made cars being imported to the UK; while a handful, such as the Ford Mustang, Jeep Wrangler and even some high-end BMWs such as the X5, already make their way across the pond, we could soon see more cars, particularly SUVs, sold here in the UK.

Such a scenario could, for example, see the return of the likes of Chevrolet, which stopped selling cars in the UK a decade ago (with the exception of the Corvette). Of course, there is the barrier of converting left-hand drive American cars to right-hand drive for the UK market, something that may deter some brands from selling across the pond due to additional manufacturing costs.

Nevertheless, the arrival of more brands into the market would put even more of a strain on European manufacturers, who are already having to fight off an influx of Chinese vehicles. More cars on sale ultimately means more competition which could, in theory, drive down prices for consumers.

At this stage, it’s not yet clear whether a deal with the US can be struck – particularly given the volatility and inconsistency of President Trump. Nevertheless, while Reeves said the UK is “not going to rush into a deal”, she did try to reassure Brits by saying that the Government “want[s] to get the right deal for Britain, to better support our industry, our jobs and consumers”.

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