The relief that followed the government’s announcement that the UK was first to agree a deal with the US to lower the worst of president Donald Trump’s tariff hikes on imported cars has been tempered by concern in the industry that the details are still hazy.
The so-called US-UK economic prosperity deal agreed that the tariffs of 27.5% on UK cars imported to the US would be cut to 10% on a maximum of 100,000 cars per year.
But the wording of the agreement showed that the deal remains in principle only, with details to be thrashed out “following a reasonable period of negotiation”.
UK car makers including Lotus, Bentley and JLR are now pressing for concrete answers as they reset their US businesses following the significant upheaval caused by the tariff changes in the past couple of months, including the halting of shipments.
“The headline numbers are out there, but actually the specifics behind it still haven't been clarified,” new Lotus Europe CEO Matt Windle told Autocar. “There's product that's ready to ship… but what we don't want to do is jump the gun and end up getting clobbered on tariffs.”
Perhaps the biggest question is who qualifies for the 100,000-car quota and who pays when it’s reached, which it almost certainly will be.
Last year, the UK shipped around 107,000 cars to the US, according to figures published by the Society of Motor Manufacturers and Traders (SMMT), and car makers were hoping to improve on that to counter the shrinkage that all luxury brands are experiencing in China.
For example, JLR sales grew 27% last year in the US to 120,279. (Not all JLR models come from the UK – for example, the Defender and the Discovery.)
“How it works is the big question,” Bentley CEO Frank-Steffen Walliser told the audience at the recent Financial Times Future of the Car conference. “Anyone in the room know? If it’s 100,000 cars for Bentley, I can live with that,” he joked, before adding: “[The deal] was highly appreciated. But it's still not operational. There is a long list of open questions at the moment for sure.”
In his announcement in May at the JLR Solihull plant, UK prime minister Sir Keir Starmer said he hoped to increase that quota.
SMMT chief executive Mike Hawes was similarly relaxed. “Exactly how the 100,000 is allocated is still to be determined,” he told the audience at the SMMT's annual test day. “[But] ultimately we view this as a floor rather than a ceiling.”
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