Ford fears a double whammy from Theresa May’s no-deal Brexit tariffs

Ford Motor Co. said it will be hit twice by British tariffs to be imposed in the event of a no-deal Brexit.

The U.S. company, which makes only engines in Britain, would be taxed on exporting them to assembly plants in mainland Europe and then face import duties for bringing finished vehicles back to Britain for sale, Ford said in a statement Wednesday.

Competitors that manufacture engines elsewhere and then ship them to Britain for assembly, by contrast, would incur no charges thanks to a tariff-free regime that Prime Minister Theresa May’s government plans to offer for auto-component imports. And the same companies could then satisfy the demands of the local market direct from their British plants, also tariff-free.

“These tariffs would deal a devastating blow to much of the complex and integrated automotive industry, and would damage the competitiveness of Ford’s engine manufacturing in the U.K.,” the U.S. firm said, adding that the proposed levies were drawn up without detailed consultation with auto makers.

The British Parliament voted Wednesday to bar leaving the EU without a proper exit agreement, but it was left unclear what happens next. Britain will leave the union on March 29 without a legally binding deal.

Dearborn, Mich.-based Ford stopped making passenger cars in Britain in 2002 after seven decades of production, but still employs more than 10,000 people in the country, many of them at plants in Bridgend, Wales, and Dagenham, near London, that make gasoline and diesel engines, respectively.

The company, which last month said a hard Brexit would be “catastrophic” for the British auto industry and its own production facilities, also counts Britain as its biggest European market, representing 6% of global sales in 2017. The Ford Fiesta and Focus were the country’s two best selling models in the first two months this year, according to figures from the Society of Motor Manufacturers and Traders.

Ford added that it’s imperative that a no-deal split is ruled out as soon as possible to avoid the imposition of such a draconian tariff regime.