UK releases plans for new tariff regime
Plans for a new tariff regime as part of the UK’s 2021 trade planning were announced today by the UK government, outlining the new “MFN (most favoured nation) tariff regime” called the UK Global Tariff.
This plan would see levies on a number of imports being scrapped, resulting in household items such as fridge-freezers, dishwashers and other household goods no longer having any tariffs. Duties on renewable energy items like thermostats, vacuum flasks and LED lights would also be cut to promote a green economy.
Meanwhile, 10 per cent duties on cars, and levies on beef, butter and poultry as well as the ceramics industry would be applied to protect these industries.
This regime will be key to the UK’s economic policy as it leaves the European Union, replacing the EU’s common external tariff on non-EU trade not otherwise covered by a preferential agreement. As such, these new tariffs will be applied to trade with any country with which the UK has not negotiated a trade deal by the time the transition period ends on 31 December.
Due to 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 without a deal. However, other countries are not obliged to reciprocate by cutting their own tariffs for British imports.
Should the UK leave the EU without a deal, this new tariff would see the price of imported cars and food from Europe rise sharply. However, the UK is still hoping to agree to a better deal with the EU as Brexit negotiations continue, while also continuing its trade deals with the USA.
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