UK’s suspension of trade talks with Canada risks tariffs, warns British car industry

(Aanchal Nigam / Red Maple)


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The UK's decision to abandon talks with Canada on a free trade deal creates risk for tariffs being imposed on Britain-made cars sold in Canada, warned the British car industry on Friday.

Society of Motor Manufacturers and Traders (SMMT), in a statement, urged both sides to restart the negotiations. 

Mike Hawes, the chief executive of the Society of Motor Manufacturers and Traders said in a statement, “If UK car exports can’t use EU parts and components to avoid additional duties it creates a risk that tariffs, potentially charged on top of luxury goods taxes, could be reintroduced.”

“Canada is an important market for UK car exports and, given the close ties between our two countries, the suspension of trade talks is especially disappointing and sends a signal that the UK’s world-class automotive products are not welcome in Canada,” he added.

It is to mention that under the current Brexit deal with Canada came into effect after UK’s exit from the European Union (EU). Under this, UK manufacturers have until April of this year to export vehicles containing EU-manufactured parts to Canada. 

However, on Thursday, Britain suspended negotiations on Canada amid dissatisfaction on both sides about the lack of access to agricultural markets. Since Brexit in 2020, UK has been trying to forge bilateral deals across the globe. Presently, Canada is working on a bilateral deal with India.