Britain’s farmers and carmakers will be protected under a new post-Brexit trade regime that will result in 60% of goods coming into the country tariff-free from the start of next year, the government has announced.
The Department for International Trade said leaving the EU would allow the UK to have a bespoke system that would be simpler and cheaper while providing support for key sectors of the economy.
In a clear sign that there will be no extension to the transition period designed to smooth the UK’s exit from the EU, the government said the global tariff would be introduced on 1 January.
Under the new regime, the tariffs on more than 6,000 products will be streamlined or simplified, with the aim of cutting costs for businesses and consumers.
The government said it was maintaining tariffs on agriculture – including beef, lamb and poultry farmers – and would maintain a 10% tariff on cars in order to protect domestic producers from overseas competitors. The UK automotive industry warned last year that operating on World Trade Organisation (WTO) terms would cost it £40bn by 2024.
The 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 DIT said the new system would ensures that 60% of trade would come into the UK tariff free on WTO terms or through existing preferential access schemes with developing countries from January 2021.
It added that successful free trade negotiations would increase the proportion of trade that was tariff-free, even though talks with the EU have stalled and negotiations with the US have only just begun.
The DIT said the new regime would get rid of some of the complexities of the EU system, would involve rounding down tariffs and would get rid of all tariffs under 2%.
It provided a list of goods that consumers would see come down in price as a result of zero tariffs: These included:
dishwashers (down from 2.7%);
freezers (down from 2.5%);
sanitary products and tampons (down from 6.3%);
paints (down from 6.5%) and screwdrivers (down from 2.7%);
mirrors (down from 4%);
scissors and garden shears (down from 4.7%);
padlocks (down from 2.7%);
cooking products such as baking powder (down from 6.1%), yeast (down from 12%), bay leaves (down from 7%), ground thyme (down from 8.5%) and cocoa powder (down from 8%); and
Christmas trees (down from 2.5%).
Tariffs will be cut on more than 100 products in an attempt to encourage the development of a more sustainable economy. These include thermostats and LED lamps.
The temporary zero tariff rate on products needed to fight Covid-19 – such as ventilators and personal protective equipment (PPE) will be continued beyond 1 January next year if the medical situation makes it necessary, the DIT said.
Britain’s manufacturers would also benefit from the removal of tariffs on £30bn of imports entering supply chains, such as nuts and blots, polymers and glass rods.