Today, the UK has set out its post-Brexit tariff schedule, cutting import duties on many products while protecting industries such as automotive, agriculture and textiles.
Britain’s “global tariff” regime replaces the EU’s common external tariff, which sets duties on non-EU trade not otherwise covered by a preferential agreement. Britain’s new tariff regime will be enter into force as of 1st January 2021.
The statement from the Department of International Trade states that up to 60% of the UK’s imports will enter tariff-free under the proposed tariff plan – compared to 47% currently.
“Our new global tariff will benefit U.K. consumers and households by cutting red tape and reducing the cost of thousands of everyday products. We are backing U.K. industry and helping businesses overcome the unprecedented economic challenges posed by coronavirus.”
– Liz Truss, UK International Trade Secretary
Winners & Losers
It is good news for the likes of manufacturing firms, fabricators and Tier 1 & 2 suppliers with tariffs eliminated for a wide-range of industrial products and alloys.
However, the U.K. said it will maintain tariffs and duties on agricultural products like beef, lamb and poultry, to protect domestic producers & processors. The government has also raised tariffs on textiles, clothes & some chemical products. This leaves importers with some headaches on how to manage and mitigate those new costs.
The latest announcement replaces the temporary tariff schedule proposed in the event of a ‘No-deal’ Brexit in February 2019. Which would have seen 87% of U.K. imports made tariff-free. That
Free-Trade Negotiations
Concurrently, the U.K. is engaged in trade negotiations with the EU, aiming to sign a Free-Trade Agreement (FTA) that would eliminate most of the tariffs raised in this announcement for products entering the UK from the European Union.
An FTA with the EU may reduce or remove tariff & quota barriers, however, new barriers to trade – like customs declarations – will remain.
