The British government announced a new post-Brexit tariff regime to replace the European Union’s (EU) common external tariff, maintaining a 10 per cent tariff on cars but cutting levies on tens of billions of dollars of supply chain imports.
Starting on January 1, 2021, the new tariff regime marks a departure from an overly complex EU system. The new tariff is modified to the needs of the British economy. It will be in pounds, not in euros. It negotiates trade deals with both the United States and the Brussels-based bloc.
The UK government said tariffs would be eliminated on a wide range of products, with 60 per cent of trade coming into the UK made tariff-free on WTO terms or through existing preferential access, and successful free trade agreement (FTA) negotiations will increase this.
The British government banks on successful FTA negotiations to expand tariff-free trade. The new UK Global Tariff, as it is known, will benefit UK consumers and households by cutting red tape and reducing the cost of thousands of everyday products. Tariffs will be cut on over 100 products, which support energy efficiency, to promote a sustainable economy, with thermostats, LED lamps among others dropping to zero tariffs.
Under the new regime, the government will streamline tariffs on more than 6,000 products. It will be cheaper than the EU’s Common External Tariff. It will apply to countries with which the UK has no agreement and removes all ‘nuisance tariffs’ (those below 2 per cent). This would lower costs for businesses and increase choice for consumers.
The government will also introduce a temporary zero tariff rate for personal protective equipment, medical devices and other goods from non-EU countries being used to fight the COVID-19.