Following the defeat of Prime Minister Theresa May’s Brexit deal in the House of Commons on 12 March, the Government has issued a temporary tariff regime aimed at mitigating the worst effects of a no-deal exit.
Intended “to minimise costs to business and consumers while protecting vulnerable industries”, the regime would apply for up to 12 months and allow time, the Government argues, for a full consultation on a permanent approach to post-Brexit tariffs.
The move has, however, been condemned by the CBI, with Director-General Carolyn Fairbairn describing the prospect of no deal as a “sledgehammer for the economy”.
With Members of Parliament due to vote next on whether to reject the idea of the UK leaving the EU without a deal, the tariff notice has been issued ahead of that vote to ensure that they are fully informed of what the impact on tariffs will be.
The temporary regime would see 87% of total imports to the UK by value being eligible for tariff-free access, with tariffs therefore applying to 13% of imported goods.
It allows for a mixture of tariffs and quotas on beef, lamb, pork, poultry and some dairy products in order, the Government explains, to help farmers and producers who have historically been protected through high EU tariffs.
To support the automotive sector, a number of tariffs on finished vehicles would be retained — although carmakers relying on EU supply chains would not face additional tariffs on car parts imported from the EU.
Describing the tariff changes as a balanced approach that will help support British jobs and avoid potential price spikes, Trade Policy Minister George Hollingbery stressed that businesses would be consulted on what should happen after the transitional period.
The lack of consultation on the temporary regime was criticised by the CBI, with Ms Fairbairn commenting that it gives businesses no time to prepare.
It should be noted that under the World Trade Organization’s most-favoured-nation (MFN) rule, with which the UK would have to comply after Brexit as an independent WTO member, if it grants zero tariff status to goods from countries in other parts of the world, it must also do the same for EU Member States.
Guidance on how to check temporary rates of customs duty on imports after Brexit can be found at www.gov.uk.
Last reviewed 13 March 2019