The Department for International Trade has issued an important consultation on the new import tariff regime that will apply from 1 January 2021. You can see full details of the consultation here.
This regime will apply to imports to Great Britain from any country with which the UK has not concluded a Free Trade Agreement by 1 January 2021. Imports from the EU will therefore fall under this regime if the Government has not agreed an FTA with the EU by the end of this year. If an FTA has been agreed, then different (generally speaking lower) or zero tariffs will be applied to EU imports.
The Government’s default position is that tariffs should be applied to all imports where the EU currently applies a tariff, and at the same rate that the EU currently applies. However, it has proposed a number of exceptions to this rule. As tariff policy is exceptionally complicated, there is a high risk of unintended consequences from any change, and we would like your input to ensure that we can accurately reflect the impact on the manufacturing sector to the Government.
There are four key exceptions that the Government is proposing to apply to the general rule:
- To abolish all tariffs below 2.5%
- To reduce tariffs above this rate to a series of standardised bands (which will be 2.5%, 5%, 7.5%, 10% etc.)
- To abolish tariffs on inputs to production (it has not clearly defined what it means by inputs to production)
- To abolish tariffs on goods which have zero or limited production in the UK (it has not defined ‘limited’)
Make UK would like to know what you think about these proposals, so we can let the Government know what the manufacturing sector as a whole would like. Things to particularly watch out for are if:
- you are making a high-value, low volume product which currently benefits from tariff production and which might be affected by tariff abolition
- you are making a low-value, high volume product which currently attracts a low tariff and might be affected by abolition of tariffs below 2.5%
- you are domestic manufacturer of an input to production which might be affected by the elimination of tariff protection on imports of a competitor product
You can send your thoughts and questions to Fhaheen Khan, one of Make UK’s economists, at [email protected]. You can also respond directly to Government in your own right if you wish using the link above. The consultation closes on 5 March.
Please note that this regime will not apply to imports to Northern Ireland, including from Great Britain. The existing EU tariff rates will continue to apply, with imports from GB to NI being subject to a special regime that has yet to be finalised.
Thank you for engaging with this really important issue. Your input really helps us to make sure that this new policy is #BackingManufacturing.