U.K. announces new post-Brexit tariff regime that cuts billions to import levies

Click to play video: 'Brexiteers celebrate the United Kingdom’s exit from European Union' Brexiteers celebrate the United Kingdom’s exit from European Union
Brexit supporters in London’s Parliament Square celebrated Britain’s departure from the European Union on Jan. 31. The U.K. officially left the EU at 11 p.m. on Friday night, marking the end of the nation’s 47-year membership in the EU – Feb 1, 2020

The United Kingdom on Tuesday announced a new post-Brexit tariff regime to replace the European Union’s external tariff, maintaining a 10% tariff on cars but cutting levies on tens of billions of dollars of supply chain imports.

After decades outsourcing its trade policy to the European Union, Britain is embarking on negotiating free trade agreements with countries around the world and aims to have deals in place covering 80% of British trade within three years.

The British government said the new regime, known as UK Global Tariff (UKGT), would be simpler and cheaper than the EU’s Common External Tariff. It will apply to countries with which it has no agreement and will remove all tariffs below 2%.

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“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.

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The UKGT will be set in pounds and will be legislated for later in the year and will come into force from January 2021.

Under the new regime tariffs would be eliminated on a wide range of products: 60% of trade will come into the UK tariff free on WTO terms or through existing preferential access, the government said.

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The UK will maintain tariffs on a number of products backing UK industries such as agriculture, automotive and fishing. It will remove tariffs on 30 billion pounds ($37 billion) worth of imports entering UK supply chains such as screws and bolts.

The government said it would also remove tariffs on products which support energy efficiency such as thermostats and LED lamps, and will introduce a temporary zero tariff rate on products being use to fight the COVID-19 outbreak such as personal protective equipment.

(Editing by Guy Faulconbridge)

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