Even with a trade deal, the proportion of non-UK components in Toyota and Nissan cars assembled in the UK will make them liable for 10% tax when sold in the EU. This is an under-reported elephant in the room.**
Quote:
Toyota, Nissan to seek reimbursement from UK if Brexit talks fail - Nikkei
The companies are bracing for an additional 10% EU tax on automobile imports from Britain and are demanding that the government pays for such additional customs costs, the report [in Nikkei] said, without citing sources...
Nissan has a manufacturing plant in Sunderland, northern England, that employs 7,000. That would be "unsustainable" if Britain leaves the EU without a trade deal, Nissan said in June.
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More details of that under-reported elephant in the room:
Quote:
In a letter to the auto industry, David Frost conceded that he had failed to convince Brussels to take a more flexible approach when it came to assessing how cars manufactured using non-EU parts could qualify for zero-tariff access to the bloc under a trade deal.
The UK has been pushing during trade negotiations for manufacturers to be able to count, or “cumulate” Turkish, Japanese or other non-EU inputs as “local” for the purposes of exporting under the agreement but Brussels has rejected the request.
Under standard EU trade rules, a vehicle must typically be 55 per cent “locally made” in order to qualify for zero-tariff access to the bloc.The letter raises fears in the industry that a lopsided trade deal will allow European cars from Germany or France to be imported to the UK without tariffs, but that British-built models will be penalised for not meeting the rules — pressuring manufacturers to raise prices or shift production to the continent to remain competitive.
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https://www.ft.com/content/4fa4732b-...4-c8ae1cd80a78