British Carmakers Hit by Punishing Brexit Tariffs

U.K. carmakers will have an additional 6% tariff slapped on their vehicles exported to Canada from next week.

The punitive import duties are the result of failed trade negotiations between the two Commonwealth partners following the expiration of the U.K.’s European Union Trading terms post-Brexit, BBC News reports.

New tariffs are determined by whether the U.K. products exported to Canada use EU parts and materials. Tariff limits that had been waived while the two countries sought to work out a new agreement are now applied and car exports no longer qualify for zero-tariff trade.

In 2023, 1.3% of British-built cars were exported to Canada, the U.K.'s eighth-largest market, according to the auto industry’s representative body the Society of Motor Manufacturers and Traders (SMMT).

Negotiations stalled earlier this year largely over the U.K.’s refusal to accept Canada’s hormone-infused beef, which the larger EU market does not have to accept in its tariff-free trade with Canada owing to its greater economic clout.

SMMT chief executive Mike Hawes describes the new tariffs as “disappointing,” noting carmakers “can only do so much” to mitigate the higher costs for consumers. He adds: “Given Canada's importance as a market for U.K. automotive exports, and the detriment this tariff will have on Canadian consumers, we urge all parties to be pragmatic, to resume negotiations on an upgraded trade deal.”