UK announces new post-Brexit global tariff regimeReuters | London | Updated: 19-05-2020 12:15 IST | Created: 19-05-2020 12:00 IST
The United Kingdom on Tuesday announced a new post-Brexit tariff regime to replace the European Union's external tariff, maintaining a 10% tariff on cars but cutting levies on tens of billions of dollars of supply chain imports. After decades of outsourcing its trade policy to the European Union, Britain is embarking on negotiating free trade agreements with countries around the world and aims to have deals in place covering 80% of British trade within three years.
The British government said the new regime, known as UK Global Tariff (UKGT), would be simpler and cheaper than the EU's Common External Tariff. It will apply to countries with which it has no agreement and will remove all tariffs below 2%. "Our new Global Tariff will benefit UK consumers and households by cutting red tape and reducing the cost of thousands of everyday products," International Trade Secretary Liz Truss said.
The UKGT will be set in pounds and will be legislated for later in the year and will come into force from January 2021. Under the new regime, tariffs would be eliminated on a wide range of products: 60% of trade will come into the UK tariff-free on WTO terms or through existing preferential access, the government said.
The UK will maintain tariffs on a number of products backing UK industries such as agriculture, automotive, and fishing. It will remove tariffs on 30 billion pounds ($37 billion) worth of imports entering UK supply chains such as screws and bolts. The government said it would also remove tariffs on products that support energy efficiency such as thermostats and LED lamps, and will introduce a temporary zero tariff rate on products being used to fight the COVID-19 outbreak such as personal protective equipment. ($1 = 0.8183 pounds)