The plans of Donald Trump, the US president-elect, to impose massive tariffs on imported cars could have an impact on UK fleet markets.
During his campaign for the presidency, he promised to impose tariffs of up to 200% on vehicles imported into America, and 60% on all Chinese products, which directly affected electric vehicles (EVs), made in China.
According to UK’s Association of Fleet Professionals, if implemented such a tariff increase would have a drastic effect on the global vehicle and van market, particularly for EVs.
Paul Hollick, AFP chairman, stated that “tariffs of this level would effectively render imported cars unsellable in the US, and of course there have been some substantial tariffs recently imposed by the EU.”
He admitted that it was unclear whether the tariffs were part of Trump’s actual plans or a gambit for negotiating more favorable trade deals.
Hollick added that “all of this production aimed towards the US, especially large numbers Chinese EVs, will inevitably find its way to freer markets around the world. The UK is one of them.” “So far, new Chinese entrants’ actions have been measured, but there will be an enormous temptation to dump a large number of cars and vans at low prices here, causing high disruption levels.”
He stated that the UK government might decide to introduce tariffs in order to protect domestic manufacturers, or they could simply step back and allow the market to find its level.
He said, “The future looks very murky.”
He explained that UK fleets will be in a very difficult situation, as vehicle purchasing decisions become extremely risky.
On the one hand, access to a cheap supply of Chinese EVs could be beneficial for fleets as they transition to net zero and would also boost the retail EV industry. This will come at a cost of stability, and a volatile marketplace is a bad market where, for instance, it is difficult to forecast accurate residual values.
He said the imposition by a major Western country of tariffs of the magnitude promised was almost unheard of in modern times, and that it would be difficult to predict the impact. He added that “some economists make quite dire predictions.” “We are awaiting the results with some trepidation.”
It is also difficult to predict the effect of the second hand fleet EV market.
Hollick, a Fleet Manager, said that fleet managers will be closely watching Trump’s remarks over the coming weeks.
Subscribe to our weekly HR news and guidance
Every Wednesday, receive the Personnel Today Direct newsletter.
Personnel Today has the latest HR job openings.
Browse Human Resources Jobs
