UK tweaks tariffs amid no-deal Brexit countdown

Brexit

Adjustments made for duties on trucks, bioethanol and clothing in effort to keep prices down




Clothing from developing countries, including Bangladesh will not be subject to the 10% tariff.Photograph: SOPA Images/LightRocket via Getty Images

The government has announced changes to British tariffs on lorries, bioethanol and clothing in the event of a no-deal Brexit. Revisions to the temporary tariff schedule are an attempt to keep down prices for people in the UK after Britain leaves the EU, according to the Department for International Trade. If there is no deal then lower tariffs will be applied on HGVs entering the UK market.

There will be adjustments to the duty paid on bioethanol fuel to support “UK producers”. Some clothing will face tariffs to make sure there is still preferential access to the UK market for developing countries. It is understood the new HGV tariff will be 10%.

It was set at between 10 and 22% in March when the schedule was first released. Adjustments to the duty on bioethanol – fuel made from crops such as sugar and corn – do not involve a change in cost, but instead the tariff will apply to a narrower range of fuels. The clothing tariff will be eight to 10% but this will not apply to products from some developing countries including Bangladesh, Cambodia, Myanmar, Sri Lanka, the Philippines, Pakistan, Bolivia and Armenia.

Conor Burns, the trade policy minister, said: “The UK will be leaving the EU on 31 October and we are working with businesses to ensure the UK is ready to trade from day one. “Our temporary tariff regime will support the UK economy as a whole, helping British businesses to trade and opening up opportunities for business to import the best goods from around the world at the best prices for British consumers.” Despite the changes to the temporary tariff schedule, which was first published in March this year, the government says 88% of total imports will be eligible for tariff-free access to the UK market.

The government has said it will closely monitor the effects of the temporary regime on the UK economy and businesses and consumers will be able to provide feedback. The Department for International Trade highlights that the tariff on honey from New Zealand will fall from 17% to zero and the tariff on grapes from Brazil will fall from about 15% to zero. Other products such as tennis rackets and wines will no longer be subject to a tariff.

The regime would apply for up to 12 months while a full consultation on a permanent approach will start in January 2020. Dr Meredith Crowley, international trade economist from the University of Cambridge, told BBC Radio 4’s Today programme it was not surprising the UK was trying to “fine-tune” its tariff schedule. “The UK has had tariffs on biodiesel since 2012, as part of a complaint the European Union has launched against Indonesia and Argentina for subsidising that sector, so continuing to have a roughly 25 to 30% tariff on biodiesel isn’t surprising,” she said.

She said Britain’s HGV sector would face potential problems with Brexit as 90% of commercial vehicles produced in the UK are sold to the EU. She said: “So on the export side Britain is looking at facing high tariffs into the European Union. They were trying to have the same high tariffs on imports from the European Union but that could also raise prices for purchasers of heavy goods vehicles.

These vehicles are really expensive – GBP85,000 to GBP100,000.”

She said it was likely the government would have to adjust tariffs in the future as it becomes apparent which sectors in the UK economy are most affected.

Topics

You may also like...