The UK has set out it’s desired post-Brexit tariff regime, which will be implemented if a deal cannot be reached with the EU.
The plans, announced by trade secretary Liz Truss, would reduce some tariffs on imports compared with the current rate levels applied as a member of EU’s customs union, with products including dishwashers set to have new zero rates.
However, the UK’s proposal includes 10% duties on cars, and levies on beef and poultry as well as protections for the ceramics industry.
The new tariffs will become effective from January 2021 — if the UK fails to reach an agreement with the EU when the post-Brexit transition period expires. It will apply to imports from any countries with which it does not have a preferential trade deal, an agreement which grants special market access to specific nations.
Britain will reduce tariffs on many products compared with those it has applied as part of the EU’s customs union, which binds its member countries together by ensuring they all apply the same import duties to goods from outside the EU.
The new system, called the UK global tariff, will be a “simpler, easier to use and lower tariff regime than the EU’s common external tariff,” the UK government said.
In March 2019, the Department for International Trade outlined draft proposals which would have eliminated tariffs on 87% of products as the UK prepared for a no-deal Brexit.
Now, it is aiming for an initial 60% of imports into the UK to be tariff-free compared with 47 per cent at present, but that the figure should rise as more trade deals are struck.
The DIT said it would scrap levies on £30bn worth of goods that are part of UK supply chains, including tariffs on copper alloy tubes from 5.25 to 0% and screws and bolts from 3.7% to 0%. Tariffs on vacuum flasks, bike inner tubes and LED lights will also be slashed to 0%.
Key UK sectors will be protected. The 10% tariffs on imported cars are designed to protect the UK automotive industry, but will lead to the price of an imported vehicle jumping by several thousand pounds.
Agricultural tariffs are designed to protect British farmers worried about floods of cheaper imports from overseas. Last week UK cabinet ministers were in dispute over US demands for farm tariffs to be reduced to smooth the path towards a US-UK trade deal.
The British Retail Consortium, warned that families would pay more for food.
“UK consumers have become accustomed to a huge variety of affordable food thanks, in part, to tariff-free imports from the EU,”
“Unless a similar agreement is reached in the next seven months, imported agricultural products will be subject to new tariffs, raising costs for consumers.”
Nicholas Macpherson, former permanent secretary at the Treasury, said the economic case for Brexit had rested on free trade and cheap food. “Not for the first or last time, the Chamberlainite protectionists within the Tory party have defeated the Gladstonian liberals.”
Liz Truss said 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.
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