UK revises no-deal Brexit import tariffs

Will Green is news editor of Supply Management
8 October 2019

The UK government has announced changes to the tariff regime that will come into force in the event of a no-deal Brexit, affecting imports of HGVs, bioethanol and clothing.

Under the changes tariffs will be lowered on HGVs entering the UK market, from 22% to 10%.

Meanwhile, tariffs on bioethanol and textiles and clothing will be raised to protect domestic producers. For textiles the tariff range is 2.5% to 12% and for bioethanol chemical products or preparations, predominantly composed of organic compounds, it is 6.5%.

Road Haulage Association chief executive Richard Burnett told the BBC: “The original proposal of a 22% tariff on HGVs coming in from the EU was unbelievable.

“A 10% tariff will still be crippling and will severely damage the lives and livelihoods of those responsible for operating the very industry that keeps the UK fit to live in.”

David Jinks, head of consumer research at ParcelHero, said the tariff should be reduced to zero. “Even the latest 10% duty – reduced before it was ever implemented – increases the cost of a new truck by £8,500 on a typical £85,000 vehicle,” he said.

“Truck operators such as international couriers and road hauliers usually replace ageing trucks in batches, leading to a huge potential price increase of at least £170,000 on an order of 20 trucks. Obviously, that’s an unexpected cost that will have to be paid for somehow.”

The Department for International Trade said supporting bioethanol producers was important as “the supply of this fuel is important to critical national infrastructure”.

The DIT said applying tariffs to clothing would “ensure the preferential access to the UK market currently available to developing countries (compared to other countries) is maintained”.

The DIT said the temporary tariff regime would apply for up to 12 months after a no-deal Brexit, while consultation on a permanent approach to tariffs would begin in January next year. Under the regime 88% of total imports to the UK by value would be tariff free.

The Dairy Council for Northern Ireland (DCNI) has warned that a no-deal Brexit would result in tariffs costing £320m for the sector, which would “wipe out the industry”.

Mike Johnston, CEO of the DCNI, said: “Dairy processors and their farmers will not survive unless there is a deal. NI farmers, processors and customers need a deal to mitigate trade tariffs and enable the continued movement and trade in raw milk and finished products.”

Meanwile, an analaysis of 6.5m contracts on the Icertis Contract Management platform has found that, for enterprises with operations spanning the EU, more than 10% of contracts may be impacted by regulatory, freedom of movement, tariff, customs and other jurisdictional issues associated with a no-deal Brexit.

“Companies that lack the ability to quickly assess the impact of Brexit-related changes to their contracts – or cannot rapidly revise agreements once Brexit details are confirmed – risk non-performance penalties, missed obligations, compliance fines and commercial disruption,” said Icertis.

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