The UK Government has announced a new tariff regime, the UK Global Tariff (UKGT), which will replace the EU’s Common External Tariff (EU CET) on 1 January 2021 when the transition period ends.
Said to be tailored to the “needs of the UK economy”, the UKGT will make it easier and cheaper for businesses to import goods to the UK from overseas.
In particular, the new regime is said to be simpler and offer lower tariffs than the EU CT by scrapping red tape and removing unnecessary barriers to trade. The new regime will also operate in pounds sterling rather than euros.
Under the UKGT, the Government is said to be “streamlining and simplifying nearly 6,000 tariff lines”, this will lower the costs for businesses and provide a greater selection of products for consumers.
Changes included in the new regime include scrapping unnecessary tariff variations, rounding tariffs down to standardised percentages, and getting rid of all “nuisance tariffs” (those below two per cent). The UKGT also expands tariff-free trade by eliminating tariffs on a wide range of products.
From January next year, the Government promises that the UKGT will ensure that 60 per cent of trade will come into the UK tariff-free on WTO terms or through existing preferential access.
In total, Britain will scrap all levies on £30 billion of imports when it formally leaves the European Union at the end of the year.
International trade secretary Liz Truss said: “For the first time in 50 years we are able to set our own tariff regime that is tailored to the UK economy.
“Our new Global Tariff will benefit UK consumers and households by cutting red tape and reducing the cost of thousands of everyday products.
“With this straightforward approach, we are backing UK industry and helping businesses overcome the unprecedented economic challenges posed by coronavirus.”
The tariffs apply to trade with any country the UK has not negotiated a trade deal with by December, including the EU if no deal can be reached in time.
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