LONDON (BLOOMBERG) - The UK set out its post-Brexit tariffs plan, cutting import duties on many products while protecting industries such as automotive and agriculture, in global trade beyond Europe.
Items like dishwashers, freezers and Christmas trees will be able to enter the UK tariff-free as of Jan 1, 2021, the Department for International Trade said in a statement on Tuesday (May 19).
Under the plan, £30 billion (S$52.13 billion) worth of tariffs will also be removed on supply chain imports, like copper alloy tubes, and screws and bolts, the department said.
Britain's so-called "global tariff" regime is a key part of its economic policy as it leaves the European Union, because it replaces the EU's common external tariff, which sets duties on non-EU trade not otherwise covered by a preferential agreement.
The UK said 60 per cent of its trade will come in tariff-free under its plan, compared with 47 per cent currently.
"Our new global tariff will benefit UK consumers and households by cutting red tape and reducing the cost of thousands of everyday products," International Trade Secretary Liz Truss said in the statement. "We are backing UK industry and helping businesses overcome the unprecedented economic challenges posed by coronavirus."
However, the UK said it would maintain a 10 per cent tariff on cars, and also keep duties on agricultural products like beef, lamb and poultry to protect those industries. The government also said it was cutting duties on renewable energy items like thermostats, vacuum flasks and LED lights to promote a green economy.
Separately, the UK is engaged in trade talks with the EU, aiming to sign a Canada-style accord that would eliminate most tariffs and quotas on goods but introduce new barriers like customs paperwork. The latest round of talks ended with little progress last week.
The UK's announcement will help its ongoing trade negotiations with the EU, the US and Japan because it makes clear what the default duties would be if no agreement is reached in these talks, said Mr Sam Lowe, senior research fellow at the Centre for European Reform.
Britain's plan also marks a walk-back from the temporary tariff schedule it proposed in the event of a no-deal Brexit last year, which would have seen 87 per cent of UK imports made tariff-free. That proposal was criticised for giving away too much British leverage in future trade talks.
"It seems to me that those in government who wanted to retain tariffs for the purpose of future trade negotiations won the argument this time round," Mr Lowe said.