Carmakers warn Burnham over EU tariffs

By the Editorial Team · Wednesday, July 1, 2026

The British automotive industry has urged Andy Burnham to take immediate action to prevent severe disruptions from new EU trade rules that could impose tariffs and restrict UK-made electric vehicles in European markets. Failure to address these measures threatens to marginalize UK carmakers and harm the closely integrated UK-EU automotive supply chain starting in January.

The British automotive industry has issued a stark warning to Andy Burnham, a leading contender to head the next Labour government, urging immediate action to avert significant disruption caused by upcoming European Union trade rules. The Society of Motor Manufacturers and Traders (SMMT) cautioned that new tariffs and regulatory measures set to take effect in January could severely impact both UK and EU carmakers.

The changes apply to rules of origin for electric vehicles (EVs) under the delayed portions of the post-Brexit trade agreement. Specifically, vehicles must meet requirements stipulating that a minimum percentage of their components be sourced from Europe to qualify for tariff-free access to the EU market. If UK-built cars fail to comply, they will be subject to a 10 percent tariff when exported to the EU.

In addition to tariffs, the EU's recently introduced “Made in Europe” policies are expected to further restrict the presence of UK-assembled vehicles within European markets. According to the SMMT, these measures include limitations on subsidies, fleet purchasing programs, and other financial incentives designed to prioritize European-made products. The trade group warned that these combined factors risk marginalizing British manufacturers from a market to which they have long been closely integrated.

Mike Hawes, chief executive of the SMMT, described the potential impact as “one of the most spectacular own goals in history.” He emphasized that excluding UK producers from “Made in Europe” would not only harm British carmakers but also pose a threat to the broader European automotive sector. Hawes noted the extensive interdependence between UK and EU industries, highlighting that the UK serves as the EU’s largest market for cars and automotive components.

This urgent appeal from the automotive sector follows the postponement of a planned EU-Britain trade summit, a delay linked to Sir Keir Starmer’s announcement that he would resign as Labour leader. The SMMT has called on the future Labour government, expected to be led by Burnham, to prioritize negotiations with Brussels to mitigate the adverse effects of the new trade rules.

At the time of publication, the UK government had not issued a response to the SMMT’s warnings.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.