UK sets out post-Brexit tariff regime

The price of food and cars imported from countries without a UK trade deal will rise sharply under a new trade regime set out by trade secretary Liz Truss on Tuesday morning. 

The plans, which would apply to imports from the EU and from outside the bloc, would at the same time slash tariffs on a large range of other products.

However they would see the introduction of 10 per cent duties on cars, and levies on beef, butter and poultry as well as protections for the ceramics industry. 

The Department for International Trade said Britain would scrap all levies on £30bn of imports as part of its new “MFN (most favoured nation) tariff regime” called the UK Global Tariff.

This is the basis on which the UK will trade with other countries unless and until it has struck new trade agreements with them by the end of the Brexit transition period on December 31.

For the EU, for example, London is hoping to replicate the existing zero-tariff arrangement it enjoys from being part of the customs union — although talks last week hit an impasse.

Under the MFN tariff regime products with tariffs currently below 3 per cent will see those reduced to zero, including fridge freezers and dishwashers, Christmas trees, mirrors and scissors.

Because of World Trade Organization rules, the UK would have to impose the same tariffs on goods from the EU and from other countries around the world if it left the bloc without a deal. Other countries are under no obligation to reciprocate by cutting their own tariffs for British imports.

The tariffs on imported cars are designed to protect the UK car industry, but could lead to the price of an imported car jumping by several thousand pounds.

Meanwhile, the agricultural tariffs are supposed to protect British farmers who are worried about a flood of cheap imports entering the country.

But that does not mean the new tariffs will remain under every trade deal struck by the UK in the coming months. Cabinet ministers are currently engaged in a prolonged row over US demands for agricultural tariffs to be slashed as part of a US-UK trade deal.

Ms Truss said that the UK would be able to set its own tariff regime, “tailored to the UK economy”, for the first time in 50 years.

“Our new Global Tariff will benefit UK consumers and households by cutting red tape and reducing the cost of thousands of everyday products,” she said.

“With this straightforward approach, we are backing UK industry and helping businesses overcome the unprecedented economic challenges posed by coronavirus.”

A year ago the DiT set out draft proposals that would have eliminated tariffs on 87 per cent of products.

Now, by contrast, it says that it is aiming for an initial 60 per cent of UK trade to be tariff-free under the new rules — and that the figure should rise as more trade deals are struck.

The department said 47 per cent of trade is tariff-free for the UK currently, because of transition arrangements with the EU, meaning an extra £30bn of trade would be tariff-free from next year.

Source Article

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