I posted before that the UK has announced its new UK Global Tariff.
These are tariffs that will apply on any products that the UK imports on a Most Favoured Nation (MFN) basis from the end of the transition period when the UK is no longer bound by the EU’s Common External Tariff. The published tariffs come after a public consultation on the subject was held in February this year.
Under the new Global Tariff, 66% of tariff lines will see some degree of change.
Tariffs on around 2,000 products have been fully eliminated, almost doubling the number of tariff-free products compared to the existing EU MFN schedule. A further 40% of tariff lines have been ‘simplified’ meaning that they have either been rounded down to the nearest standardised band, or have been converted from specific duties into simple percentages. And just under 10% of tariff lines have been converted from being expressed in € to being expressed in £ using an average exchange rate over the last 5 years. This conversion also entails some degree of simplification, as specific duties have been rounded down to the nearest £, and for two-part duties, which include both a percentage tariff and a fixed charge, the percentage component has been rounded down to standardised bands.
My Blog does not focus on tariffs and customs, but as I explained in an earlier Blog post, we (Cardinal Environment) will be putting some staff through the UK Customs Academy training, in order to assist our customers further.
L. Alan Winters CB, Professor of Economics and Director of the UK Trade Policy Observatory; and Michael Gasiorek, Professor of Economics at the University of Sussex and Julia Magntorn Garrett, a Research Officer in Economics at the University of Sussex, (Fellows of the UK Trade Policy Observatory) have written a useful Blog on the subject.
This Blog is here. Extracts are below in italics.
The largest relative change is for stone, plaster and cement, where around 85% of tariff lines have changed to some degree, just under half of which have been fully liberalised. This is followed by processed food products, where most of the change is due to conversion of specific duties, and plastics and rubber products and chemical products where the vast majority of tariff lines have been simplified (rounded down).
The tariff changes would increase the share of imports that can be imported duty-free from countries currently trading on MFN terms. Under the Global Tariff, around 70% of the UK’s imports from ‘MFN countries’ would be duty-free compared with around 52% currently. However, the Global Tariff is far less liberal than the UK’s (now superseded) ‘No deal’ tariffs that were published in October last year, which would have seen tariffs eliminated on around 95% of imports from ‘MFN countries’.
If the UK and the EU do not reach a trade deal by the end of the transition period, the Global Tariff will apply also to imports from the EU. In this scenario, only around 44% of imports from the EU would be tariff free, compared with 100% currently. This is a higher share than if the current MFN tariff schedule was applied on EU imports, but is a much smaller share than it would have been under the ‘No deal’ tariffs.
Canada is one of the countries that did not roll over their trade deal with the EU, this writing is useful on the subject, and gives context – here.