March 25, 2019, 9:39

London’s No-Deal Tariff Plan ‘Sledgehammer’ for UK Economy – Business Industry

London’s No-Deal Tariff Plan ‘Sledgehammer’ for UK Economy – Business Industry

In its attempt to soften the blow of a no-deal Brexit, the UK government announced it would eliminate import tariffs on number of goods to keep Irish border free of custom checks.

The temporary measures, which will see to no border checks on goods between Ireland and Northern Ireland, would act as a “sledgehammer” for the British economy, according to the Confederation of British Industry (CBI).

The UK will retain most of the tariff rates for agricultural products if it leaves without a deal, including beef, poultry meat, sheepmeat, lamb and dairy produce.

That’s not the case for some other sectors, such as chemical products, that have 4.6% on them. The tariffs on these products will go down to an average 0.1%.

Another area with high tariff rates (8.2%) is footwear, which will see the number drop down to 0% in a dramatic cut.

“What we are hearing is the biggest change in terms of trade this country has faced since the mid-19th century being imposed on this country with no consultation with business, no time to prepare. This is no way to run a country. What we potentially are going to see is this imposition of new terms of trade at the same time as business is blocked out of its closest trading partner,” CBI director-general Carolyn Fairbairn said.

Relatively small tariffs on steal an iron (0.8%) will be reduced to zero, affecting British workers in the field.

One of the big exporting sectors in the UK economy, “finished motor cars and trucks,” with 11.3% tariff rate will largely maintain its high level with the reduction to 10.6%.

In case of a no-deal, the UK economy will see one of its historically key trading partners pay more in tariffs, than non-EU countries that have free-trade agreements with Britain.

For British businesses and consumers, cutting tariffs on imported goods would ease the hit from an expected jump in inflation caused by no-deal, which could lead to the drop in value for pound sterling and more expensive imports.

The tariffs listed by the UK government apply exclusively at the EU border with Northern Ireland

If the UK leaves the European Union on 29 March without a deal, it automatically falls back on World Trade Organization (WTO) rules.

According to the WTO, members can’t give preferential treatment to certain countries, while the application of modified tariff figures would appear as a special treatment and potentially as a breeding ground for smuggling.

In turn, the European Union announced on Wednesday that the bloc will introduce tariffs on UK exports and imports in case of a no-deal Brexit.

“We take note of the United Kingdom’s plans for temporary tariffs in the case of no deal. We will carefully analyse the compliance of the UK plans with [World Trade Organisation] WTO law… In the event of no deal, the Union has already made clear that it will apply its normal third-country trade regime to all trade with the United Kingdom”, Margaritis Schinas told a press conference. 

READ MORE: EU to Put Tariffs on UK Goods If No-Deal Brexit While London Plans to Cut Duties

 

Source: sputniknews.com

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