The UK’s new post-Brexit tariff strategy, in place for January 2021, has finally been agreed upon, maintaining a 10% tariff on cars but cutting levies on supply chain imports. The new regime is said to be less complex than the EU system.
Britain is now looking for free trade agreements with countries around the world and wishes to have deals in place covering 80% of all British trade by 2022, as reported by Reuters.
The regime, also known as UK Global Tariff, is also said to be cheaper than the EU’s Common External Tariff, and will also apply to countries with which the UK has no agreement, while removing all tariffs below 2%.
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“Our new Global Tariff will benefit UK consumers and households by cutting red tape and reducing the cost of thousands of everyday products,” said International Trade Secretary, Liz Truss.
The British government also said that tariffs will be eliminated on a wide range of products, with 60% of trade coming into the UK tariff-free, either on WTO terms or through existing preferential access. However, the UK will keep in place tariffs on products competing with industries such as agriculture, automotive and finishing, cutting levies on 30 billion pounds ($37 billion) worth of imports entering UK supply chains.
“Keeping agricultural protection makes sense as a bargaining chip for the EU & US trade negotiations. But means big cost increases for agriculture imports if no UK-EU FTA,” said Thomas Sampson, Associate professor at the London School of Economics.
The UK also wants to remove tariffs on products which support energy efficiency and will introduce a temporary zero tariff on goods being used to combat the COVID-19 pandemic – such as personal protective gear.
To summarize, the new trade plan is meant to protect the farming and automotive industry, while scrapping tariffs on household items such as dishwashers, freezers, gardening tools and many food and sanitary items.
