Since leaving the European Union on the 31st January, the Department for International Trade is putting together what is known as Most Favoured Nation Tariff (MFN). This is an independent tariff policy – the UK’s first in around 50 years. This means the current trade tariffs will change on the 1st of January 2021… here’s what you need to know about the trade tariff after Brexit.
-
How Will The Current Trade Tariffs Change?
Trade Tariffs are likely to be simplified to ensure importers understand the tariffs they will be paying for particular products.
They may simplify the tariffs using the following:
Tariff Type Simplification “Nuisance tariffs” anything less than 2.5% Removing these to eliminate unnecessary admin for UK Businesses < 20% tariffs Rounded down to the nearest 2.5% band (e.g. 8.2% will round down to 7.5%) 20% > 50% tariffs Rounded down to the nearest 5% (e.g. 24% will round down to 20% and 38% down to 35%) > 50% tariffs Rounded down to the nearest 10% (78% will round down to 70%) Agricultural tariffs Simplified to a single percentage (53.6 EUR/100kg may change to X%) Tariffs may be removed for imports of goods which help towards the production and manufacturing of other goods. This allows the UK market to grow as the input cost is less to manufacture in the UK.
Additionally, if there is limited to no production in the UK of particular products then tariffs may be removed to allow UK consumers to benefit from trading with other countries. As there is no market to protect in the UK they want to make these goods available to the UK consumer.
The consultation for the new Global Tariff schedule will close on the 5th March 2020 and an announcement about the new schedule will be made shortly afterwards. However, this won’t be put in place until the 1st of January.
We are currently in a transition period until the 31st of December when this will end. For information about what tariff ratings apply during the implementation period please see:
-
What The Government Will Be Taking Into Account
The Most Favoured Nation Tariff will be tailored specifically to benefit the UK’s economy whilst taking into account any negotiated Free Trade Agreements.
Our government will have to take into account a fair few factors when selecting the new tariff ratings, to ensure they are all fair and balanced with the UK’s trade objectives.
The ‘Approach to MFN Tariff Policy‘ has stated that they will take into account the following :
- “the interests of consumers in the United Kingdom
- the interests of producers in the United Kingdom of the goods concerned
- the desirability of maintaining and promoting the external trade of the United Kingdom
- the desirability of maintaining and promoting productivity in the United Kingdom
- the extent to which the goods concerned are subject to competition”
These factors mean they will ensure the tariff is fair with regards to what manufacturers in the UK require, this includes parts/materials imported to manufacture goods in the UK, to promote the UK market. They will also take into account preferential ratings to reduce poverty in developing countries such as those benefitting from the Generalised Scheme of Preferences.
They may offer preferential tariffs for products which have limited or no market in the UK, currently, our trade tariff takes into account the EU market. For example, if a current anti-dumping duty is added to a product because of a large market in the EU, this may no longer be applicable as it no longer applies to our market.
-
How Can I Offer My Opinion?
The Government launched a 4-week public consultation which closes on the 5th March in order to take into account the views of international stakeholders as well as the general public so they can factor in opinions from all aspects of society when developing our independent trade policy.You can, therefore, put across opinions of changes to the current tariff which you believe would benefit the UK economy, feedback for specific products of importance to you, as well as feedback on the current trade tariff to assist with forming the new MFN tariff.
You can respond to the consultation online to factor your own opinion:
You are asked to include clear examples and how amending or not amending the tariff will impact your business and customers.
Contact Shippo
If you have any concerns, feel free to contact us and we can help you out!
The Government launched a 4-week public consultation which closes on the 5th March in order to take into account the views of international stakeholders as well as the general public so they can factor in opinions from all aspects of society when developing our independent trade policy.