AFP: UK fleets at risk from Trump tariffs

Plans mooted by US president-elect Donald Trump to impose major tariffs on imported vehicles could have a direct impact on the UK fleet market, according to the Association of Fleet Professionals (AFP).

During his election campaign, Trump repeatedly promised tariffs of amounts varying from 100% to 200% would be imposed on all vehicles imported into the US, as well as 60% on all Chinese goods. This would directly affect electric vehicles (EVs) made in China, which includes those of several European manufacturers.

Chair of the AFP Paul Hollick believes that, if implemented, any of these moves could have a dramatic effect on the global car and van market, especially for EVs.

“There seems to be some confusion whether these tariffs are actual plans by the Trump administration or some kind of gambit to negotiate more advantageous trade deals,” Hollick said.

“However, tariffs at this kind of level would effectively make imported cars unsaleable in the US and, of course, there have also been sometimes substantial tariffs recently imposed in the EU.”

Hollick added that many vehicles intended for US markets – especially large numbers of Chinese EVs – would inevitably be diverted towards freer global markets, the UK being one. “So far, the actions of new Chinese entrants have been quite measured but there will be a huge temptation to dump large numbers of cars and vans here at low prices, causing high levels of disruption.”

The effect of such action is difficult to predict, Hollick believes. “At the extremes, our government might decide that domestic manufacturers need similar protection and introduce tariffs of its own, step back and let the market find its level, or any of a hundred points in-between. The future view looks quite murky.”

Unpredictable market

Any such action could put UK fleets in a difficult position, with a domestic market that will be tricky to read, and vehicle buying decisions that could be hugely risky.