The Secretary of State for International Trade (Elizabeth Truss)
As we recover from the unprecedented economic challenges posed by coronavirus, the UK will champion free trade, fight protectionism and remove trade barriers.
The Government have this morning, 19 May 2020 announced their new tariff regime—the UK Global Tariff (UKGT). This will replace the EU’s Common External Tariff on 1 January 2021 at the end of the transition period.
Our new tariff is tailored to the needs of the UK economy. It will support the country, by making it easier and cheaper for businesses to import goods from overseas.
It is a simpler, easier-to-use and lower tariff regime than the EU’s Common External Tariff (EU’s CET) and will be in pounds, not euros. It will scrap red tape and other unnecessary barriers to trade, reduce cost pressures and increase choice for consumers. It will also back UK industries to compete on the global stage.
The UKGT almost doubles the number of products that are tariff free relative to what is currently applied—with just under 50% of products now zero, compared to 27% in the EU’s CET.
The UKGT will make it easier for businesses to trade
Our tariff will be in pounds—not euros. Paid in pounds, calculated in pounds, this is a stable tariff for UK traders.
Our tariff cuts administrative costs for businesses. We are getting rid of needless tariffs which create administrative burdens. All tariffs below 2% are gone (e.g. fire extinguishers, school pencils and gardening tools, from 1.7% to 0%).
Our tariff is simpler to use. We will round tariffs down, making them simpler for traders to use (e.g. reading glasses from 2.9% to 2% and alarm clocks from 4.7% to 4%). We will also scrap the complex calculation—which results in over 13,000 tariff variations on products like biscuits, confectionery, and spreads—applied under the EU’s CET.
The UKGT will reduce cost pressures and increase choice for UK households. Tariffs have been removed on products that we do not produce, or do not produce much of in the UK. Removing these tariffs will reduce cost pressures for UK households and businesses (e.g. pistachios from 1.6% to 0% and cotton yarn from 4% to 0%).
Our tariff will protect developing countries. Tariffs have been retained on goods such as vanilla (6%), plantains (16%) and bed linen (12%) to support the preferential access of developing countries to the UK market.
We are cutting tariffs on over 100 products to back renewable energy, energy efficiency, carbon capture, and the circular economy through recycling and reducing single use plastics (e.g. thermostats from 2.1% to 0%, vacuum flasks from 6.7% to 0% and LED lamps from 3.7% to 0%).
The UKGT also retains tariffs on products across UK industries and sectors to help them compete on the global stage. Tariffs on products such as lamb, beef and poultry and finished cars will all see their tariff retained.
The Government have developed and tailored the UKGT to the needs of the whole UK economy. It was designed following a public consultation, which gave individuals and businesses across the UK an opportunity to provide their views and feedback. The Department for International Trade organised events with businesses and experts across the UK, including in the English regions and devolved nations, during the consultation process. The consultation received more than 1,300 responses.
The Government carefully considered all available evidence, including the consultation responses, in the development of the UKGT.
The summary of consultation responses and the Government’s response can be found at: https://www. gov.uk/government/consultations/the-uk-global-tariff. Copies will be placed in the Libraries of both Houses.
For the first time in almost 50 years, the UK has set its own tariff schedule, aimed at boosting prosperity, supporting British industry, making it easier to bring goods into the UK and reducing cost pressures for consumers.
The full schedule can be found at: https://www.gov.uk/guidance/uk-tariffs-from-1-january-2021.
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