UK Government sets out low-tariff trade proposals in new Global Tariff Policy

Key details of how the UK’s future trade tariff schedule could look have been revealed today (February 6), as the Department for International Trade launches a public consultation on its global tariff policy.

The new ‘UK Most Favoured Nation‘ tariff schedule will enter into force on January 1, 2021.

Under the arrangements, the UK will take steps towards agricultural tariffs that are applied as single
percentages.

The Government is also considering removing tariffs on key inputs used for the production and manufacturing of other goods in the UK.

The report explained the measure would is considering removing these tariffs to reduce input costs for UK producers.

UK Trade Secretary Liz Truss explained that the UK Global Tariff will ensure businesses compete on fair terms with the rest of the world, whilst also offering households greater choice and lower prices.

The consultation will be open online for four weeks from today, closing on March 5. In a statement, the Department of International Trade said all views would be taken into account before the Global Tariff Policy is finalised.

Alternatively, the UK’s new Global Tariff Policy will come into effect on January 1, 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 Most Favoured Nation tariff schedule and whether the UK has a trade agreement in place with them.

The UK will allow imports from countries that the 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.

Trade remedy measures

The Government has also today 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/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: “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.”