UK consults on new global tariff policy

The Department for International Trade has today (6 February) launched a public consultation to inform the UK’s new independent global tariff policy.  

Now that UK has left the EU, the Government is free to make its mark as a champion of free trade, safeguard against the forces of protectionism on the rise across the world, and crucially ensure that our tariff strategy is best for businesses and consumers across the UK. 

As part of our new approach, the Government is developing a new UK Most Favoured Nation (MFN) tariff schedule which will enter into force on 1st January 2021. 

This bespoke regime, known as the UK Global Tariff, will ensure UK businesses compete on fair terms with the rest of the world whilst benefitting households through greater choice and lower prices. Ultimately, this will also help to make it easier to trade, drive up investment, and deliver more quality jobs across the UK. 

The consultation will be open online for four weeks from today, closing on 5 March, and all views will be taken into account before the Global Tariff Policy in finalised. 

Goods coming into the UK will no longer be subject to the EU’s Common External Tariff as they have been for nearly 50 years, with the UK’s new Global Tariff Policy coming into effect on 1 January 2021 for imports from any country the UK does not have a free trade agreement with. This comes as the Government sets out details of the UK’s approach to negotiating free trade agreements with countries including the US, Australia, New Zealand and Japan. 

As part of the consultation, the government is seeking views on:  

• simplifying and tailoring the tariff to suit UK businesses and households, such as removing tariffs of less than 2.5% and rounding tariffs down to the nearest 2.5%, 5% or 10% band; 
• removing tariffs on key inputs to production which could reduce costs for UK manufacturers; and
• removing tariffs where the UK has zero or limited domestic production which could help to lower prices for consumers.

International Trade Secretary Liz Truss said: 

“The UK has left the EU and it is time for us to look forward to our future as an independent, global champion of free trade.  

“It is vitally important that we now move away from complex tariff schedule imposed on us by the European Union. High tariffs impinge on businesses and raise costs for consumers. This is our opportunity to set our own tariff strategy that is right for UK consumers and businesses across our country. 

“I am calling on people, businesses and civil society groups to seize this opportunity to take part in our consultation and tell us what would work best for them.”   

The new UK Global Tariff Policy will apply to goods from countries around the world unless the UK has different arrangements in place, for example under a free trade agreement, or a tariff suspension applies. Tariffs levied by other countries on UK exports will depend on that country’s own MFN tariff schedule and whether the UK has a trade agreement in place with them. 

The UK will allow imports from countries that UK has a free trade agreement or other arrangement with, and with the world’s poorest countries continuing to access the UK at lower tariffs as set out in those agreements. 

In line with the Northern Ireland protocol, special arrangements will apply to goods entering Northern Ireland. 

Protecting businesses from injury   

The Government has also announced that it will begin reviewing 43 EU trade remedy measures, which were deemed important to UK industries and should be maintained, following a Call to Evidence last year. This will be carried out by the Trade Remedies Investigations Directorate (TRID). 

Trade remedies will be overseen by a new Trade Remedies Authority that will soon be established to protect UK businesses from injury caused by unfair trading practices, such as dumping and subsidies and unforeseen surges in imports after we leave the EU.   

Examples of those trade remedy measures that will be reviewed by TRID following the Call for Evidence include:    

• anti-dumping duties of up to 36.1% on imports of ceramic kitchen and tableware from China;    
• anti-dumping and anti-subsidy duties of up to €62 per tyre on imports of bus and lorry tyres from China; and    
• anti-dumping duties of up to 35.6% on imports of aluminium foil in small rolls.  

TRID They will invite industry and stakeholders to participate in the process, including international exporters.   

Simon Walker CBE has today been announced as Chair-Designate of the TRA and is expected to take up the position in early March.   

Trade Remedies Authority Chair-Designate Simon Walker said:  

“I am very pleased to be taking up the Chair of the Trade Remedies Authority. Britain’s economic future will be determined by the ability of UK businesses to compete vigorously in international marketplaces.  

“Maintaining the interests of consumers while ensuring that producers are not handicapped by dumping and other unfair practices is going to be a vital balance as Britain embarks upon an independent trading regime.”