Trade terms announced

Import tariffs to be slashed in the event of No Deal exit

Port of Grangemouth

New deal on trade

Britain will slash tariffs on a range of imports from outside the European Union in the event of a no-deal exit, it has emerged.

However, some products which are currently imported free of tariffs from the remaining 27 EU countries would face levies for the first time.

The changes would represent a “modest liberalisation” of the UK’s tariff regime, ministers say.

Under the unilateral temporary scheme announced by the Government, 87% of all imports to the UK by value would be eligible for zero-tariff access – up from 80% at present – while many other goods will be subject to a lower rate than currently applied under EU rules.

On the Irish border, the government has said it would not introduce any new checks or controls on goods moving from the Irish Republic to Northern Ireland, stressing the plan was temporary and unilateral.

Goods crossing the border from Ireland into Northern Ireland would not be covered by the new import tariff regime, while there would be no checks or tariffs on goods going from the Republic to Northern Ireland.

Carolyn Fairbairn, director general of the CBI, said that if the tariffs should come into effect they would be “the biggest change in terms of trade since mid 19th century”.

“These are being imposed on this country with no consultation with business, with no time to prepare. This is no way to run a country,” she said.

Ireland Secretary Karen Bradley says the no-deal plans “recognise the unique circumstances of Northern Ireland”.

However, she said: “These arrangements can only be temporary and short term.”

Tariffs will be payable on goods moving from the EU into the rest of the UK via Northern Ireland.

The government insists that this will not create a border down the Irish Sea, as there will be no checks on goods moving between Northern Ireland and Great Britain.

Helen Dickinson
Helen Dickinson: warning

Helen Dickinson, chief executive of the British Retail Consortium, pictured, said: “At last businesses have some clarity about the tariff schedule they will face under a no deal Brexit. Already hundreds of ships are on their way to Britain and are only now discovering what tariffs they may face.

“Consumers look to be no better off as a result of a mix of tariffs and quotas on food and other products. We remain particularly concerned about tariffs on certain clothes and textiles – a good proportion of which consumers were getting tariff-free from countries like Italy and Turkey.

“However, it is the non-tariff barriers which will have the greatest impact on consumers. Tariffs, checks, and increased documentation requirements will all result in delays, higher prices, and reduced choice for consumers. This is an inevitable consequence of a no deal Brexit.”

“The announcement that there will be no enforcement of custom checks and tariffs moving across the Irish border presents the biggest risk. Without these checks and controls, and with essentially a different tariff schedule in operation, the system would be a goldmine for criminals seeking to take advantage of a no deal Brexit.”

“Parliament must find a way of taking no deal off the table or risk harming the people and businesses of Great Britain and Northern Ireland.”

Food and Drink Federation chief executive Ian Wright said: “Today’s announcement on tariffs underlines why the UK is not ready to exit the EU on 29 March.  Business cannot adapt to this new regime in just two weeks.  It is disgraceful; that we are, only now, getting to see these.  There must be proper consultation with business before a change of this magnitude is introduced.

“We were promised that business would only have to adapt to one new change of rules; it’s now clear that promise has not been kept.

“This new system is confusing and complex.  It includes some zero tariffs, some new tariffs and some quotas.  Some foodstuffs qualify for partial protection and some not for any protection at all; with little logic to explain the difference.  New tariffs will apply to some foods that are currently imported tariff-free, yet no tariffs will be applied to goods that cross the border between Ireland and Northern Ireland.  This is likely to result  in massive trade distortions.

“In a world where it is costly and complex to export finished goods to the EU, and costly and complex to import key ingredients, many food and drink manufacturers who trade with the EU will surely question whether the UK is the right place for them to be. 

“This is yet another reason why Parliament must, this evening, act decisively to remove the threat of exiting the EU without a deal on 29 March 2019.”

Liz CameronLiz Cameron, director and chief executive of the Scottish Chambers of Commerce, pictured, said: “If the tariffs published today by the UK Government were to come to fruition, there would be winners and losers across UK industry. These changes would be sudden ones, and in the midst of a potential disorderly exit from the EU, would cause an unwelcome shock to many businesses across the UK that would be affected by them.

“Maintaining targeted protections on tariffs in key areas such as the car industry are welcome. However, it is hard to be optimistic when the wider business community has not had enough consultation, preparation or planning to support those firms who would be most affected.

“As MPs vote tonight, this is yet another reason why they must act to avoid a disorderly exit from the EU.” 

Alan Glen, VAT director at Scott-Moncrieff, said: “The potential tariff changes under a No-Deal Brexit announced this morning could open up the UK rather than close its borders, as was initially thought. However, there will clearly be an impact on imports coming from the EU which may no longer be tariff free and clarity will be needed quickly on what items do and do not fit the bill.

“As a work around, we have already seen some organisations stockpile goods (from Bentley to Bacardi) to ensure trading can continue throughout the transition period and beyond with limited interruption. Although this may help to avoid these tariffs in the short-term, while it is agreed on what the tariffs will be applied to, organisations with the funds available may want to take the leap and stockpile.

“However, for those organisations on the other side of the coin, it is vital to review how they currently trade, and may even want to revise pricing to account for the changes in tariff that could be imposed in event of a No-Deal. Either way, ultimately, we want the business community to emerge from Brexit as unscathed as possible.”

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