On Tuesday, the United Kingdom launched its new tariff regime post-Brexit to substitute the European Union’s external tariff it had been complying with. The regime is named UK Global Tariff (UKGT).
Britain is now up to negotiate free trade agreements (FTA) with other countries after decades of outsourcing its trade policy to the EU. It aims to cover 80% of its deals within three years.
The UKGT is said to be simpler and cheaper compared to the EU’s Common External Tariff. It would apply to countries with no agreements with the country and will remove all tariffs under 2%.
The UKGT will be set in Pound sterling. It is to be legislated later this year and will be effective starting from January 2021.
Under the UKGT, tariffs on a wide range of products would be eliminated. 60% of trade will come into the UK tariff-free on WTO terms or through existing preferential access.
The country will keep tariffs on some products from essential UK industries, including agriculture, automotive, and fishing. Import tariffs worth GBP30 billion (USD37 billion) will be removed for the UK supply chain items such as screws and bolts. The tariffs on products supporting energy efficiency, including thermostats and LED lamps will be removed.
The country will also introduce a temporary zero-tariff rate on products being equipped to cope with the coronavirus pandemic, such as personal protective equipment (PPE).
