UK outlines tariff plan for no-deal as businesses raise concerns

Vidya Ram London | Updated on March 13, 2019 Published on March 13, 2019

Ahead of the Parliamentary vote on whether MPs want to rule out crashing out of the EU without a deal, the government published details of a temporary tariff regime that would apply to goods in the event of a no-deal Brexit. While tariffs on 87 per cent of goods would be reduced to zero as part of the 12-month plan, tariffs would apply to certain industries, including the farming sector, with tariffs on meats and some dairy to “support farmers and producers who have historically been protected through high EU tariffs” and to finished vehicles to support the automotive sector. To avoid disruption on supply chains, car makers relying on EU supply chains — such as Jaguar Land Rover — won’t face additional tariffs on car parts, the government said.

“Our priority is securing a deal with the European Union as this will avoid disruption to our global trading relationships. However, we must prepare for all eventualities,” said Trade Policy Minister George Hollingbery. “If we leave without a deal, we will set the majority of our import tariffs to zero, whilst maintaining tariffs for the most sensitive industries.”

The government has also said it would temporarily take steps to avoid new border checks on goods at the border between Ireland and Northern Ireland, for goods that would remain on the island.

However, its plans have done little to allay concerns of business. “No policy on tariffs can come close to compensating for the disruption, cost and job losses that would result from ‘no deal’. It’s staggering that we are in this position with only days until we are due to leave. Every day ‘no deal’ remains a possibility is another day companies pay the price in expensive contingency measure,” said Mike Hawes, the head of the automotive industry body the SMMT.

The EU also expressed concern about the UK’s plans, in particular the plan to apply different tariffs on the island of Ireland to elsewhere in the UK, when it came to EU trade. The EU will apply standard WTO tariffs on imports from the UK.

Britain’s industry body the CBI has lambasted Tuesday evening’s developments, calling for the parliamentary “circus,” to end. “Enough is enough. This must be the last day of failed politics,” said its Director-General Carolyn Fairbairn calling for an urgent extension to Article 50. “It should be as short as realistically possible and backed by a clear plan.”

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Published on March 13, 2019
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