The UK Government is consulting on the level of tariffs that will apply to goods imported under WTO rules after Brexit. In particular, it is seeking views on products where tariffs could be reduced or removed altogether after 31 December 2020.
If you or your suppliers rely on imported goods, particularly from non-EU countries, this could be an opportunity to secure cost savings. Given that the cost of importing goods from the EU is almost certain to go up because of Brexit (even if a zero tariff free trade deal is reached with the EU), these tariff reductions offer the prospect of offsetting at least a proportion of those additional costs. In some cases, they may even pave the way for new, cheaper sources of supply from non-EU countries. We would therefore strongly encourage businesses to respond to the consultation, highlighting any goods which in their view would benefit from tariff reduction/removal. Equally, UK manufacturers should consider responding if they are concerned that removal of tariff protection could leave them dangerously exposed to cheaper foreign competition.
The deadline for responses is 23.59 on 5 March 2020 (the very short consultation period is probably due to the expected start of trade negotiations with the EU and other countries early this year).
Which goods could be in line for tariff reductions/removal?
The Government is considering removing tariffs on two categories of goods:
- Products where there is zero or limited UK production – including, but not limited to, the products on this list; and
- Products which UK businesses import for use in production and manufacturing of other goods – including, but not limited to, the products on this list and this list.
As noted above, the lists of products provided by the UK Government are not exhaustive and there are some puzzling omissions. For example, the list of products where there is zero or limited UK production appears to be derived from a list produced by the EU. It does not, for example, contain any mention of oranges, even though there is very limited UK production of these fruits – so one would expect the UK Government to be considering removing any tariffs from oranges (whereas the EU does have orange growers that it wishes to protect, so it is not surprising that its list omitted them). Businesses should not therefore assume that the lists are definitive, but will need to make the case for the inclusion of additional products.