How Britain and Germany worked together to defeat France over electric car tariffs

Years ago, Brexiteers referred to the UK as “a treasure island” that brought Berlin billions of dollars in revenue each year.

It was prophesied that one day, the German Chancellor will convince Brussels to give in to British demands and protect these sales.

This prediction, which was made more than seven-years ago by Britons who voted to leave Europe, may finally have come true.

The European Commission announced on Wednesday that it would grant a three-year exemption for Brexit tariffs to be applied on vehicles imported from across the Channel.

The European manufacturers warned that the 10pc levies would cause them to incur excessive costs. They could lose up to €4.3bn and reduce production by almost 500,000 electric cars between 2024-2027.

As of next year, the UK and EU will be required to source 45pc or their parts from either market . If not, they may face the tariff negotiated in the post-Brexit agreement.

The German auto industry warned that the new rules would put the entire European Union, and not just the UK, at a competitive disadvantage compared to their Chinese competitors.

Kemi had spent nine months lobbying to get a reprieve. He brought up the topic in every meeting he held with EU officials, according to a source close the the Business Secretary.

According to an insider, she said: “This is not just a UK problem, it’s about the European auto industry.”

France, however, stood in the UK’s way to be offered more lenient trade terms. Paris claimed that any delay on tariffs could set a precedent which the UK could exploit to get further changes made to the Brexit agreement.

A European source stated that “the French believe it is better to remove the plaster now”, referring to Paris wanting to end the Brexit effects on both sides.

It is not yet certain that France will be supportive of the proposed deal with Britain, which would postpone the introduction tariffs on electric vehicles.

Signing off on a deal requires a qualified majority vote from the 27 member countries, whose voting weights are based on their sizes.

Officials believe that the French opposition has no relevance because Germany is worth 18.5pc and there are 20 other EU capitals.

Maros Sfcovic was a vice-president of the Commission who mediated the deal. He wanted France to not be discouraged by Britain’s perceived victory.

In Brussels, Mr Sefcovic – a skilled negotiator – announced the agreement, saying that it was vital for European automakers and not their British counterparts.

In a press conference held on Wednesday, he said: “First and foremost I would like to emphasize that this decision was taken in the interest of European industry.”

The war in Ukraine, the high energy prices, inflation and subsidy schemes of international competitors were all cited by the minister as reasons for the “extremely difficult” times faced by the carmakers on the continent. He was referring to subsidies given to Chinese manufacturers by Beijing.

This announcement came with a subsidy offer of €3bn for Europe’s battery and electric vehicle industries.

Our goal is to maintain market access and have a strong position in the world, especially in our largest export market.China is increasing its market share through unfair practices and is doing this more and more,” said an EU official.

Diplomats say the subsidy package has been drawn up to ensure French support for the delay in tariffs on the electric vehicle trade between UK and EU.

The Commission suggested a new clause that would prevent both Brussels and Britain from extending the rules in three years.This was a ploy designed to calm Paris’ fears about rewriting Brexit’s trade treaty.

Insiders have made it clear that Rishi Sunak should not be forgotten in this deal.

The Prime Minister has been credited for putting a stop to the combative approach of Boris Johnson and Liz Truss.

He signed the Windsor Framework, which replaced the Northern Ireland Protocol. This deal had created a border along the Irish Sea. Since then, he has overseen Britain’s rejoining the EU’s €95.5bn Horizon Research Programme.

Mr. Sefcovic stated that he appreciates the improved atmosphere with the UK since the adoption of the Windsor Framework.
Later, when asked to comment on his relationship with David Cameron (the Foreign Secretary), the vice-president of the Commission smiled as he sat in the centre of the Berlaymont headquarters’ press room.

They have worked together on many projects since Mr Cameron was prime minister.

“I was smiling, because it wasn’t my first time meeting Lord Cameron,” said Mr Sefcovic of their luncheon in Brussels last Thursday.

The two had worked together for many hours on the plans for the EU’s green transition, and the conclusion to the Paris Agreement during the Cop 21 Climate Summit while Britain was still part of the EU.

Sefcovic is now Lord Cameron’s main point of contact for UK’s relationship with Brussels, after Cameron’s surprising appointment as Foreign Secretary.
Deals on Gibraltar fishing rights, and access to the electricity market are still pending.

“We have exchanged numbers, we text each other and we think we have an excellent working relationship,” concluded Mr Sefcovic.