The UK’s contingency measures for a no deal Brexit includes a plan to raise tariffs for food and cars imported from Europe, UK officials revealed shortly after the House of Commons voted to reject the possibility of Britain leaving the European Union without a withdrawal agreement in place.
The plan would eliminate tariffs for 87% of imports – up from the current 80% – for EU products. European goods would then go from being 100% duty-free items to 82% duty-free. For products from the rest of the world, 92% would now be imported from the UK duty-free, up from just 56%.
This approach is meant to shield consumers from a sudden spike in prices, protect farmers, whilst also supporting fragile manufacturing value chains.
The new regime envisages a 10% tariff on cars, beef, chicken, lamb, and pork as well as protections for the ceramics industry, fertilisers, and fuel. Other agricultural products ranging from eggs and cereals to fruit and vegetables will not be protected.
Zero tariffs would apply to aluminium, steel, machinery, arms and ammunition, footwear, paper and wood products. Crucially, zero tariffs would also apply to car parts, a measure meant to support the auto-industry and minimise job losses.
This transitional tariff system would apply for 12 months after a no-deal exit while the government conducts consultations on a new regime.
“This is the biggest change, in terms of trade, this country has faced since the mid-19th century by being imposed, with no consultation with business, no time to prepare,” the director-general of business lobby group the CBI, Carolyn Fairbairn, told BBC 4, a sentiment that was also echoed by the General Secretary of Unite Trade Union, Steve-Turner, who called the new regime “economic vandalism.”
The car industry has already made clear that just-in-time delivery systems would be disrupted with devastating effects for the industry. Overall, the prices of cars will go up by €1700.
Under this transitional agreement there would be no customs checks on the Irish border, no matter their place of origin. Theoretically, this could mean that EU cars could be imported duty-free to the UK via Ireland. Perhaps more significantly, the measure almost certainly violates World Trade Organisation rules that demand equal treatment for all trading partners.