The US and UK Will Have a 10 Percent Tariff on Car Imports

Everyone remembers the drama that unfolded earlier this year when the US surprised the world by imposing tariffs on imports and trade coming into the US. It sent all American imports throughout the world into limbo, leaving businesses stranded and unsure how to proceed. Well, finally, after months of negotiations back and forth, President Trump has signed an order that states the UK will have a 10 percent tariff on car imports. 

What Do Tariffs on Car Imports Really Mean?

For people who do not understand the tariffs and what they mean, they are an extra tax that the US is now putting on countries that want to import their products into America. Every country has to negotiate its own deal, with the percentage of tariffs varying depending on where your company is based. This is something that China has been doing for years, and President Trump is replicating their thinking.  

Relief for UK Carmakers

For the UK, this tariff will be applied to the first 100,000 vehicles made in Britain that will subsequently be imported to America every year. Now that it is all done and dusted, carmakers can undo any temporary suspensions they have put on shipments and start shipping their products across the Atlantic again. The automotive companies can now breathe a sigh of relief, as America is the biggest market for a lot of businesses.  

Many automakers welcome the signing of a permanent deal, which ends the higher tariffs suddenly imposed earlier this year. Those tariffs had thrown their customer market into chaos—especially in the United Kingdom, now outside the European Union. Many automotive CEOs have reached out to pass on their delight. SMMT boss Mike Hawes detailed that the signing of this deal is “great news for the UK automotive industry, helping the sector avoid the severest level of tariffs and enabling many manufacturers to resume deliveries imminently.” 

While this news excites both automotive companies and customers worldwide, officials still need to finalize key details and plan to announce them in the coming weeks. These details include the final tariff on steel and aluminum. Negotiators have already agreed in principle to reduce the aluminum tariff to zero, but they have yet to confirm it in writing.

EU-Made Cars Face Higher Tariffs

At the moment, this ten percent tariff only applies to British-made cars, so if you are more inclined to EU-made cars such as German BMWs or Audis, then they will be subject to the higher percentage tariff of 25 percent. This higher tariff is forecasted to reduce the popularity of these cars in America, as the higher price tag will not be viable for some customers.

A Sigh of Relief for Businesses and Car Lovers

Overall, this announcement means that many companies can relax as they now know their international business expenses going forward, and they can mould their business matrix and marketing accordingly.  For the many American car lovers waiting for their British-made import since the start of the year, well, whoo hoo, your purchase is finally on the way!