British Government Plans to Slash Tariffs on U.S. Goods

LONDON, ENGLAND - JUNE 05: Chief Secretary to the Treasury Elizabeth Truss arrives for a Cabinet meeting chaired by British Prime Minister Theresa May at 10 Downing Street on June 5, 2018 in London, England. (Photo by Jack Taylor/Getty Images)
Jack Taylor/Getty

Consumers are set to benefit from the government’s plan to slash tariffs on goods from the United States and other countries after the UK comes out of the transition period in December 2020.

Under the transition period, the UK is still bound by the European Union’s Common External Tariff rules. The Conservative government announced on Thursday that it had launched a consultation on the UK Global Tariff, which will replace it on January 1st, 2021.

Boris Johnson’s government is considering removing tariffs on goods that are not currently manufactured in the UK or where there is limited domestic production, lowering the cost for consumers. Other options for review includes lifting tariffs on key inputs for production by British manufacturers and simplifying other tariffs.

Another initiative is the Most Favoured Nation tariff system which would encourage trade with countries where there is no current arrangement, according to details reported by The Telegraph.

“This is the first time in almost 50 years that the UK will be able to set its tariff rates on imported goods. This consultation represents an opportunity for every business, every person and every civil society group, in every part of the UK, to have their say.

“We are calling on businesses, consumers and other groups to help us shape this new instrument of trade policy for the UK,” Secretary of State for International Trade Liz Truss said in a written trade policy update.

But ministers have said they also want to protect British companies by stopping the unfair practice of “dumping” — flooding the UK market with cheap, foreign goods — which puts British industries at risk. The Department for International Trade is set to look at measures that will penalise dumping by countries like China.

In a statement to the House of Commons, Ms Truss said that in future negotiations, “we will drive a hard bargain and, as with all negotiations, we will be prepared to walk away if that is in the national interest.

“A key priority is to deepen trade and investment relationships with like-minded partners, starting with the USA, Japan, Australia, and New Zealand.”

The international trade secretary added that an agreement with the United States would “lower prices for UK consumers”.

The UK is making headway with international trade plans post-Brexit, even before negotiations have begun with the EU. On Thursday, foreign secretary Dominic Raab began a four-day trip to Australia, Japan, Malaysia, and Singapour to discuss future trade deals.

European leaders and Eurocrats have already threatened that a deal will not be agreed unless the UK agrees to continue a commitment to restrictive regulations. On Monday, Boris Johnson said that the UK will not accept Brussels’ rules in exchange for a trade deal, signalling the UK will trade with the bloc on World Trade Organization (WTO).

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