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Policy & Compliance New tariff: the commercial viewpoint


On 19 May 2020, the British government published the legal texts of both its preferred Brexit deal and outlined its post-Brexit tariff regime. On 1 January 2021, the UK Global Tariff (UKGT) will replace the EU’s Common External Tariff. The latter is still applicable until the transition period ends on 31 December 2020. The first couple of points are that despite


being trumpeted as being part of an ambitious programme that will see Britain become a champion of free trade, only 60% of all trade coming into the UK will be duty free by tariff heading. This contrasts with the Temporary Tariff issued in March 2019, which would have allowed 87% of all goods being imported into the UK free of duty by tariff heading. The government will argue that currently 47% of all goods are imported tariff free – but that fails to consider the fact that trade with the EU, due to the transition period, is still currently duty free.


Key points The key points of the UKGT are: • To boost UK manufacturing the government will remove tariffs of up to £30 billion of imported goods including copper alloy tubes, screws and bolts,


• Duties on ‘green imports’ including renewable energy items like LED lights and thermostats will also be reduced,


• Tariffs will be imposed on goods imported into the UK from Europe where similar products are produced in the UK. These products are mainly agricultural and automotive, it was announced that a duty rate of 10% would be imposed on imported cars and tariffs would be imposed on beef, butter and poultry,


• The new tariff will operate in pounds sterling.


Plus side On the plus side, the UKGT will see the UK dispensing with certain tariffs currently imposed by the EU. • For instance, 0% tariffs will be imposed on copper alloy tubes (compared with the EU rate of 5.2%) and screws and bolts (down from the current 3.7% rate),


• Zero tariffs will be levied on many consumer goods that are dutiable in the EU tariffs, o Dishwashers down from 2.7% o Freezers down from 2.5% o Sanitary products and tampons down from 6.3%


o Paints down from 6.5% o Christmas trees down from 2.5%


• For ‘green imports’, duties will be reduced to zero including thermostats (down from 2.1%), vacuum flasks (down from 6.7%), LED lamps (down from 3.7%), and bike inner


YFN relaunches with virtual a Bake-Off


Katie-Louise Thompson-Friend (pictured), from the Woodland Group, beat off strong competition to win a ‘virtual’ Bake Off, organised to relaunch the Young Forwarder Network online. This was the first of many upcoming online


events for the trade association’s Young Forwarder Network. Of course, with it being a virtual event, the judging was all about the ‘look’ of the baked item rather than the taste. The three official judges shortlisted their top


two, and then 21 participants in the virtual Bake Off voted for the overall winner – the dreaded ‘public vote’! Katie-Louise baked a cake in the shape and colour of one of her employer’s trucks, adding


8


the company’s branding and YFN slogan in white icing. The runners-up were Kasia Kowalska-Trela, DSV Air & Sea Ltd, and Katie Yewdall, Ligentia.


Online events Carl Hobbis, training development manager commented: “The development of the YFN continues to be of great importance, and this format will enable Members of the regional groups to interact with one another. “This was the first of various online events that


will be held including web-based quizzes, guest interviews, training masterclasses, Q&A sessions and so forth.”


July 2020 tubes down from 4%),


• Almost all pharmaceuticals and most medical equipment will be tariff free.


In a way this new tariff tells us what the worst case scenario will be under World Trade Organization (WTO) rules. We do not fully know the impact of these tariff changes until the UK has concluded its trade negotiations with its current largest trading partner, the EU. At present the UKGT will apply to any country with which the UK has not concluded a trade deal. It should be recalled that currently the UK does not have a trade deal with a long list of countries including the EU, US, Canada, Japan, Australia and New Zealand. The government is currently conducting multi-track negotiations with all these countries, trying to replace the current free trade agreements available to the UK through its previous membership of the EU and now extended as part of the Transition arrangements. It is to be hoped that these deals are


concluded by 1 January 2021 to allow British business and the consumer the benefits of these trade/tariff negotiations. It should be remembered that should the sourcing of goods switch from the EU to an origin further afield, the additional freight costs will offset the savings from reduced duty rates where applicable.


www.bifa.org


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