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.
To inform the development of this bespoke tariff regime, the government has launched a four-week public consultation on the UK Global Tariff policy, beginning on 6 February 2020 and closing on 5 March 2020 at 23:59 GMT. The government encourages everyone with an interest to take part and provide their views.
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:
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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;
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removing tariffs on key inputs to production which could reduce costs for UK manufacturers; and
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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."
Deputy Director- General at CBI, Josh Hardie said:
"Business welcomes the launch of this consultation as an essential step to making the UK’s trade policy a success. Government should develop a comprehensive tariff strategy that reflects the needs of all sectors of the economy and balances the interests of consumers and producers across the whole of the UK. The CBI will be working closely with members to ensure that the business voice is heard."
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.
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