British and European Union officials will meet on Wednesday to discuss post-Brexit plans to slap a tariff on electric vehicles from the U.K., as a deadline on whether to delay the move nears.
EV rules of origin, which are due to be phased in for trade between Britain and the bloc and have become key area of contention in the ongoing relationship, are on the agenda for a half-day meeting of the U.K.-EU Trade Specialised Committee.
At stake is whether EVs traded between the U.K. and the EU will attract a 10 percent tariff from next year if less than 45 percent of their value comes from the region, as stipulated under the post-Brexit Trade and Cooperation Agreement.
“Representation has been made and continues to be made because we know the deadline is coming up but I am optimistic that the right decision will be taken,” U.K. Industry Minister Nus Ghani said in an interview with Bloomberg.
Electric vehicles have become a major focal point of global trade tensions in recent weeks. The U.K.’s hope that the EU will opt to delay the introduction of tariffs is partly driven by the EU’s decision to open a review of the impact of Chinese cars imports into the EU market, Ghani said.
U.K. Prime Minister Rishi Sunak and European carmakers want to extend the planned phase-in period by three years, allowing more time for the region’s battery supply chain to develop. Sunak has enrolled German Chancellor Olaf Scholz to help delay the tariffs.
But so far, EU officials and member states have been split over the matter, even after diplomats discussed the issue Monday, a person familiar with the discussion said.
The auto industry has said the move could cost the sector 4.3 billion euros ($4.6 billion) and benefit Chinese competitors. Stellantis has said its British Vauxhall plants could close with the loss of thousands of jobs unless the Brexit deal is renegotiated.