New UK Global Tariff unveiled by Government

19 May 2020

The Government has announced the UK’s new MFN tariff regime, the UK Global Tariff (UKGT), which will replace the EU’s Common External Tariff on January 1, 2021 at the end of the Brexit transition period.

The new regime cuts import duties on many products while protecting industries such as automotive and agriculture, as part of a shift towards global trade beyond Europe.

Items like dishwashers, freezers and Christmas trees will be able to enter the UK tariff-free as of January 1 next year. Under the plan, 30 billion pounds worth ($36.6 billion) of tariffs will also be removed on supply chain imports, including copper alloy tubes, and screws and bolts.

The UKGT is a key part of the Government’s economic policy as the UK leaves the European Union and seeks to re-position its economy on the global stage. The new rules will replace the bloc’s common external tariff, which sets duties on non-EU trade that’s not covered by separate deals with other countries.

British Chambers of Commerce Director General Adam Marshall said the publication of the UKGT provided clarity for businesses as they prepared for life outside the UK.

He said: “While the new tariff regime will provide the Government with some leverage in future trade talks, it also demonstrates the importance of reaching a UK-EU agreement to avoid substantial increases in costs for businesses on both sides of the Channel.

“With any tariff changes, there are both winners and losers. Support will be required for the industries, places and people affected by tariff changes at what is already a difficult time.”

The Department for International Trade said the new tariff would support the economy by making it easier and cheaper for businesses to import goods from overseas. It would also be cheaper, simpler and easier to use than the EU’s Common External Tariff (EU CET) and will be in GB Pounds, not euros.

At a glance the UKGT includes:

• Maintaining tariffs on agricultural products such as lamb, beef, and poultry
• Maintaining a 10% tariff on cars
• Maintaining tariffs for the vast majority of ceramic products
• Removing tariffs on £30 billion worth of imports entering UK supply chains and 0% tariffs on products used in UK production
• Potentially lower costs for consumers on goods through 0% tariffs on items including dishwashers, freezers, cooking products, paints, sanitary products, LED lamps and Christmas trees

Full details about the new tariffs can found online at https://www.gov.uk/guidance/uk-tariffs-from-1-january-2021