The UK just reached an important new trade deal.
Following the United Kingdom's decision to leave the European Union, also known as Brexit, there was great uncertainty surrounding the country's automotive industry. Home to well-known luxury brands, the UK's automakers would be severely impacted if forced to pay tariffs when selling cars to the EU. German-owned marque Bentley had already started planning for the worst changing their supply chains but it now appears that those backup plans won't be needed.
The UK and the EU have reached a trade deal that Prime Minister Boris Johnson estimates is worth around £660 billion ($893 billion). The deal still requires ratification by the UK parliament and the 27 EU member states but the feared no-deal scenario is now off the table.
It is a "comprehensive Canada-style free trade deal," said Prime Minister Johnson. It will "allow UK goods and components to be sold without tariffs and without quotas in the EU market." This is fantastic news for automakers like Jaguar Land Rover that saw disruptions to production. The negotiations' full details haven't been revealed yet but are generally believed to be good for both sides.
Early reports claim that the deal includes zero tariffs for goods, a new requirement for UK citizens to have a visa to work in the EU, border checks, a shared commitment to protect the environment, and stipulations for the fishing industry.
"It was a long and winding road, but we have got a good deal to show for it. It is fair, it is a balanced deal, and it is the right and responsible thing to do for both sides," said European Commission president Ursula von der Leyen. "As we knew, in any case, if there would have been a hard Brexit, it would not have been good for both sides, but it would have hit the United Kingdom harder than the European Union with all its might of 450 million citizens. And therefore, from a position of strength, we were able to come forward with the most comprehensive agreement we've ever had."
As the details of the deal emerge, UK automakers can likely rest easy. 2020 was already a tough year due to the Covid shutdowns, but the UK still managed to pump out important new vehicles like the 2020 Aston Martin DBX, the brand's first SUV model.