Suella has welcomed the Government's announcement this morning (19 May) of the UK’s new tariff regime, the UK Global Tariff, which will set out the duty charged on imports from other countries. This will replace the EU’s Common External Tariff on 1 January 2021 at the end of the Transition Period, by which point we will have reached an agreement on our future relationship with the EU. The UK Global Tariff will only apply to goods from all countries with which we do not have a preferential trading relationship. Suella was extremely excited about this landmark decision from the Government commenting: "Today's announcement represents an important milestone in the charting of a successful and prosperous course for the new Global Britain."
It is a simpler, easier to use and lower tariff regime than the EU’s Common External Tariff (EU CET) and will be in pounds (£), not euros. It will scrap red tape and other unnecessary barriers to trade, reduce cost pressures and increase choice for consumers and back UK industries to compete on the global stage. The Government is taking a common-sense approach to our new tariff schedule by streamlining and simplifying over 7,000 tariff lines and lowering costs for businesses by reducing administrative burdens.
The UK Global Tariff will provide a baseline from which we will negotiate free trade agreements with partners around the world, giving us the leverage to negotiate the best deal for the UK, and replace the EU tariff that we currently apply. Here is what today's announcement will mean for traders and businesses in Fareham:
- The UK Global Tariff will make it easier for businesses to trade.
- The tariff cuts administrative costs for businesses. The Government is getting rid of needless tariffs which create administrative burdens. All tariffs below 2% are gone (e.g. fire extinguishers, school pencils and gardening tools, move from 1.7% to 0%).
- The tariff is simpler to use. Suella has been informed that the Government will round tariffs down, making them simpler for traders to use (e.g. reading glasses move from 2.9% to 2% and alarm clocks from 4.7% to 4%). The Conservative Government will also scrap the EU’s complex calculation for certain processed goods- which results in over 13,000 tariff variations on products like biscuits, confectionery, and spreads - applied under the EU Tariff.
- The UK Global Tariff will back UK manufacturing and production. The Government is dropping tariffs to zero across a wide range of products used in UK production (e.g. tools for tapping and threading metal move from 2.7% to 0%, and spanners and wrenches from 1.7% to 0%).
- The UK Global Tariff will reduce cost pressures and increase choice for UK households. Tariffs will be removed on products that we do not produce, or do not produce much of in the UK. Removing these tariffs will lower cost pressures for UK households and businesses (e.g. pistachios move from 1.6% to 0% and cotton yarn from 4% to 0%).
- The UK Global Tariff will protect developing countries. These countries will maintain tariff free access into the UK on goods such as vanilla (6%), plantains (16%) and bedlinen (12%). Whereas non-developing countries will face the UK tariff on these goods, where a trade agreement is not in place. Therefore, the UKGT maintains the continued preferential access for these countries.
- The UK Global Tariff will promote a sustainable economy. We are cutting tariffs on over 100 products to back renewable energy, energy efficiency, carbon capture, and the circular economy through recycling and reducing single use plastics (e.g. thermostats move from 2.1% to 0%, vacuum flasks from 6.7% to 0% and LED lamps from 3.7% to 0%).
As we recover from the unprecedented economic challenges posed by coronavirus, the UK will champion free trade, fight protectionism and remove trade barriers. The Government's new tariff is tailored to the needs of the UK economy. It will support the country, by making it easier and cheaper for businesses, like those in Fareham, to import goods from overseas from 1 January 2021.
Furthermore, Suella has been informed that the UK Global Tariff will protect UK sectors, such as agriculture. Tariffs will be retained for products such as lamb, beef and poultry and the Government has removed tariffs on products that cannot be produced in the UK – including approximately 150 agricultural products such as various vegetables, fruits and oils.
The UK Global Tariff was designed following engagement with individuals and businesses across the UK, including a public consultation that received more than 1,300 responses. The Government carefully considered all available evidence, the results of which can be found in both Houses.