British industry calls for a tariff-free Brexit deal

The UK's Society of Motor Manufacturers and Traders (SMMT) has made a formal request for its government to maintain tariff-free trade with the European Union after Brexit.

The lawsuit comes as Prime Minister Boris Johnson lacks a majority in the House of Lords. He has also just seen his attempts to rig the Brexit agreement thwarted by the removal of clauses designed to allow him to unilaterally break the deal with the EU.

Billionaire loss alert

According to the SMMT (Society for the Study of the Masses), a no-deal Brexit would cost the UK automotive sector up to £47.000 billion . These substantial losses would be incurred in just the five years following the UK's departure. This is equivalent to €52.700 billion at the current exchange rate.

Furthermore, this industry association states that, as a whole, the sector has spent over £735 million (€824 million) preparing for the UK's departure from the EU. Of this, £235 million (almost €264 million) has been spent so far in 2020.

Uncertainty with Brexit until the last moment

The SMMT adds that 67% of UK automotive-related businesses are taking steps to address the customs procedures that will come into effect on January 1. However, around 86% of these steps are hampered by a lack of clarity regarding the UK's future relationship with the EU.

According to the association, this is compounded by the fact that 60% of companies are "spending more on storage and 52% are hiring customs agents." These extra expenses are a result of the current uncertainty and must be added to other Brexit-related blows, such as the loss of Tesla's megafactory and the decline in car manufacturing in the UK.

Toyota and Nissan put the UK on the ropes for Brexit

The SMMT reiterates, as it has done so many times before, that a fair trading model depends heavily on customs processes being swift and without significant delays . It has called on the government to clarify the terms and conditions that companies will have to meet in transactions.

Coronavirus crisis aggravated if there is no agreement

The possibility of very high tariffs being introduced without a transition period "would exacerbate the impact of the coronavirus crisis, which is already costing the UK sector losses of £27.500 billion."

SMMT Chief Executive Mike Hawes said: “As negotiations between the UK and the EU come to an end, it is time for both sides to deliver on their promises to safeguard the automotive industry. Securing the deal is absolutely critical."