Positive dialogue between the EU and USA this week resulted in a “new phase” in trading relations between the two economic superpowers. The easing of tensions and talk of working towards zero tariffs and non-tariff barriers is welcome, as is a change in language on both sides of the Atlantic.
But, as ever, the devil is in the detail. No ‘deal’ has yet been struck. Talks are only at the beginning, and with no direct mention of the automotive sector from either Jean-Claude Juncker or President Trump, which reflects the sensitivity of the issue. In addition, tariffs on steel and aluminium remain in place so the situation appears more truce than treaty.
Our sector is committed to free and fair trade and we urge negotiators to explore mutually beneficial options to avoid restrictive measures on automotive trade and solve any ongoing tensions. It’s important that parties on both sides find a long-term solution as the US is one of UK Automotive’s most important global partners, with cars and components flowing both ways.
While it’s important to maintain good relations with the US, we can’t lose focus elsewhere. 80% of cars made in the UK are exported, to 160 markets around the world. Automotive accounts for 12.8% of total UK exports in goods, worth some £44 billion. While a deal between the EU and US is important, we need a deal between the EU and UK that secures free and frictionless trade, and ensures the ongoing global competitiveness of Britain’s motor industry.
With time fast running out until we leave the EU, preparing for Brexit will be very much on the agenda at the next SMMT Regional Forum. It takes place at Pride Park Stadium, Derby on Wednesday 10 October and is free for SMMT members. More than 150 delegates from OEMs, tier 1, medium and small suppliers are expected to attend and you can find more information here: https://www.smmt.co.uk/events/regional-events/
Finally, on a sad note, this week saw the untimely passing of Sergio Marchionne at the age of 66. A global leader in the automotive industry, his legacy to FCA is immense and he will be missed by many. We extend our heartfelt condolences to his family, friends and colleagues.
