No Deal Brexit tariffs could cause skyrocketing car prices
A No Deal Brexit and inevitable tariffs imposed in the UK could send car prices would rocketing by as much as £1,500 (€1,725).
Even though 87% of goods arriving into the UK from Europe will be tariff-free, the UK plans to put 10.6% tariffs on "fully finished" cars imported from the EU. If the back-stop happens there would be a border right down the middle of the Irish Sea.
Under a no-deal Brexit, car prices are expected to increase, making the cost of an average family hatchback in the United Kingdom to rise by £1,500.
These moves come after Theresa May's Brexit deal was voted down for the second time in the UK Parliament.
The UK currently enjoys a tariff-free relationship with the European Union as it is a member but if Brexit goes ahead next week, the cost of importing some goods from the EU will rise.
Although imports from the EU may increase after Brexit, the cost of bringing in goods from most of the rest of the world will most likely fall. Currently, about 80% of all imports into the United Kingdom arrive without tariffs, but that may rise to 87%, as the UK slashes tariffs elsewhere. The director general of the British Chambers of Commerce, Adam Marshall, said:
"If the tariffs announced today were to come into effect, there would be winners and losers across UK industry overnight.
"The abruptness of changes to tariff rates in the event of a no-deal exit from the EU would be an unwelcome shock to many of the businesses affected."
The Republic of Ireland has a 310-mile border with Northern Ireland and it is still unsure as to the effects of imports and exports across this frontier.
Despite all the potential threats of tariffs, The UK government says that car manufacturers based in the UK would not face extra tariffs. They really fear a mass exodus of car manufacturers out of the UK.
As they are currently a member of the EU, the United Kingdom enjoys zero tariffs but this is due to end in just seven days on March 29.
If the border between Northern Ireland the Republic is to be kept open after Brexit, there would have to be two different tariff zones created within the UK in order to keep open the border open. UK Trade Minister George Hollingbery said:
“Our priority is securing a deal with the EU as this will avoid disruption to our global trading relationships.
“However, we must prepare for all eventualities.
“If we leave without a deal, we will set the majority of our import tariffs to zero, whilst maintaining tariffs for the most sensitive industries.
“This balanced approach will help support British jobs and avoid potential price spikes that would hit the poorest households the hardest.”
Northern Ireland Secretary Karen Bradley said:
“The Government has been clear that a deal with the EU is the best outcome for Northern Ireland.
“But we will do what we can to support people and businesses across Northern Ireland in the event that we leave without a deal.”