No deal Brexit, no tariffs?

view of big ben on the river thames in london

In a recent development surrounding the ever-changing news about the Brexit decision, the UK government announced a possible game-changer in a potential no deal scenario. On Wednesday, March 13, the UK government shared the news that if a no deal Brexit occurs without a transition plan, there is a possibility of a temporary tariff suspension. 

The UK’s temporary tariff regime for no deal is designed to minimize costs to business and consumers while protecting vulnerable industries.

As such, British businesses would NOT pay customs duties on the majority of goods when importing to the UK if a no deal Brexit occurs. The regime would be temporary, whereby the UK government would closely monitor the effects of such on the UK’s economy. It would be applicable for up to 12 months while a full consultation and review on a more permanent approach to tariffs are explored. 

The UK government would set temporary rates which would:

  • go into effect at 11 pm on March 29, 2019
  • be in place for up to 12 months effective March 29, 2019

Under the temporary tariff lift, 87% of total imports to the UK by value would be eligible for tariff-free access and applies to goods from the rest of the world, not just the EU.

Tariffs would still apply to 13% of goods imported into the UK. This includes:

  • a mixture of tariffs and quotas on beef, lamb, pork, poultry, and some dairy to support farmers and producers who have historically been protected through high EU tariffs
  • retaining a number of tariffs on finished vehicles in order to support the automotive sector and in light of broader challenging market conditions. However, car parts imported from the EU will not have a tariff.
  • in addition, there are a number of sectors where tariffs help provide support for UK producers against unfair global trading practices, such as dumping and state subsidies. Tariffs would be retained for these products, including certain ceramics, fertiliser and fuel.
  • to meet our long-standing commitment to reduce poverty through trade, the government currently offers preferential access to the UK market for developing countries. To ensure that access for developing countries is maintained, we would retain tariffs on a set of goods, including bananas, raw cane sugar, and certain kinds of fish
  • Products from the US that have been in place for retaliatory Section 232 tariffs are also still in place (No change)

Now that we’ve reviewed the details, what steps/actions should you take now to understand this important action to your business? 

Before you can begin to understand if your products have been placed on the temporary tariff list, you need to ensure that your current classifications are accurate. From there, you need to check this number against the temporary tariff list that has been published. 

Security risks at the borders will continue to ensure the right products are moving into the UK, inspections will continue, as they should and of course, certain items will be checked to ensure compliance with the regulations currently in place, like Dangerous Goods and the registration that must be in place.

British flag dart hits bulls-eye on black and gold dartboard

Stay tuned throughout the next several weeks as we all learn more about the changes that will come surrounding Brexit. There are instances where change is good; in this case, we need to wait and see the type of change and the amount of change that awaits us before we can decide. As we have said previously on this topic, “only tomorrow knows.”