UK announces post-Brexit tariff cuts as part of new global trade plan
Global tariff regime will replace EU’s common external tariff at the end of 2020
Britain has announced a new global tariff regime as part of the nation’s post-Brexit trade plan as it leaves the European Union.
The regime, which will replace the EU’s common external tariff at the start of January 2021, cuts import duties on a range of products but also protects key industries with a 10 per cent tariff on cars as well as levies on agricultural products like beef, poultry and lamb.
“Our new global tariff will benefit UK consumers and households by cutting red tape and reducing the cost of thousands of everyday products,” Britain’s International Trade Secretary Liz Truss said in a statement.
“We are backing UK industry and helping businesses overcome the unprecedented economic challenges posed by coronavirus.”
According to the new regime that British officials have set out, 60 per cent of trade not otherwise covered by other agreements will become tariff-free. At present, only 46 per cent of non-EU trade is tariff-free under the bloc's scheme.
Items like dishwashers, freezers and Christmas trees will be able to enter the UK tariff-free as of 2021, the UK government said. Under the plan, £30 billion (Dh135bn) worth of tariffs will also be removed on supply chain imports like copper alloy tubes, screws and bolts.
The government said it would promote a sustainable economy by cutting tariffs on more than 100 products to back renewable energy, energy efficiency, carbon capture, and the circular economy. These include zero tariffs on thermostats, vacuum flasks and LED lamps.
The rate of global tariffs indicates a victory for those in the UK government that had sought to retain tariffs for the purpose of trade negotiations with the EU.
The UK is currently engaged in tense talks with the 27-member bloc from which it voted to leave in 2016. In the past, Brussels had criticised a temporary tariff schedule that would have seen 87 per cent of goods become tariff-free on the grounds it would give London too much leverage in negotiations.
Britain is hoping to strike a deal similar to the trade agreement between the EU and Canada, which eliminated tariffs and quotas on most goods while imposing checks like customs paperwork. The latest round of talks ended in frustration last week with little progress made.
Concerns about the ongoing fate of the talks have dragged down the pound in currency markets, which is trading 7.5 per cent lower so far this year, but which was up 0.5 per cent by 1.50pm UAE time after the new tariff regime was announced. This was despite the publication of new data which showed joblessness claims in the UK rose 69 per cent last month.
The total number of claimants for universal credit and jobseekers' allowance benefits rose by 856,000 to 2.1 million during the month.
Updated: May 19, 2020 02:31 PM