Government consults on UK Global Tariff

United KingdomScotland

The UK Government has launched a public consultation on what the UK’s global tariff regime should be after the end of the transition period with the EU. Changes being considered include removing small “nuisance” tariffs, simplifying tariffs to single percentages and removing some tariffs completely. All businesses are recommended to respond to the consultation as best they can as among the consequences could be:

  • tariffs are removed on imports of competing products;
  • tariffs are imposed on imported goods used in manufacturing;
  • tariffs are increased on imports of goods sold by distributors and retailers.


The UK is currently subject to the EU’s Common External Tariff, which sets tariff rates for all imports to the EU where there are no applicable free trade agreements (FTAs). From 1 January 2021, the UK will need to set its own UK-specific tariffs, which is what is meant when people talk about trading on WTO terms.

These tariffs will apply from that date to all goods which are imported to the UK from all those WTO countries with which the UK has not concluded an FTA (which may include the EU). Except in very limited circumstances, the UK may not impose lower tariffs than those set out in its Global Tariff on imports from WTO countries where it does not have an FTA – an FTA may apply lower tariff rates.

The Government has launched a consultation to seek views on what the UK’s Global Tariff should be across all goods. The consultation closes on 5 March 2020 at 23:59 and can be accessed at

Simplifying the Tariff System

One aspect of the consultation involves whether or not to simplify the tariff system.The UK currently has a number of different ways in which it applies tariffs (under the EU Common External Tariff). The UK Government is considering whether these can be simplified.Examples include:

“Nuisance” tariffs: small tariffs (such as 2.5% or less) could be removed, potentially eliminating some administrative burdens. However, for low margin goods, the effect on the competitive prices for UK produced competing goods could be adverse.

Tariff bands: applying fixed tariff bands (such as 2.5% multiples up to 20%, 5% multiples to 50% and 10% multiples thereafter). There is a follow-on question as to whether current tariff rates should be rounded down to the nearest new band level (so a 19.2% tariff would be rounded down to 17.5%). Any rounding down would have the effect of reducing the price of the relevant import – good for importers and consumers but less good for UK producers of competing products.

Agricultural tariffs: agricultural tariffs are particularly complicated. As well as having fixed percentage tariff rates on the import value of agricultural products, there are also tariffs which are applied based on weight, number of units, contents (e.g. amount of sugar, lactose or alcohol) plus various combinations (such percentage rates with additional fixed price tariffs per unit and/or with minimum monetary tariff rates). Some tariffs also change on a seasonal basis. The Government is consulting on whether these should be simplified to a single applicable rate. Again, any reduction in overall rates would be good for importers and consumers but not for UK producers.

Inputs to production

The consultation is also seeking views on whether tariffs should be removed or reduced for goods which are imported for the production or manufacturing of other goods, in a move designed to support UK manufacturing. This could be done on a generic basis (referred to the Broad Economic Categories list) or on a specific type of goods basis, both on a permanent basis, or through the use of temporary suspensions for specific types of goods.

As with any reduction to tariffs, again this would benefit importers and would be expected to lead to lower costs for consumers. However, to the extent it lowers import costs for overseas goods, it will increase the competition for UK domestic producers of these goods.

Goods where there is no or limited UK production

The Government is considering whether there are goods where there is no UK production, or where UK production is limited, where they can remove the tariffs on imported goods entirely. While this will be good for consumers of these goods, the proposal is less likely to be welcomed for those producers where there is “limited” UK production and where reducing the price of imports may well end up seeing a further reduction in, or potentially even the end of, production of these goods in the UK.

Consequences for UK businesses

It is important that UK businesses engage with Government and make their concerns known. While questions have been asked as to the value of previous engagements with the Government over Brexit, this current consultation is an extremely important opportunity for UK manufacturers and producers of goods to input to Government thinking. Whether you are a business that imports and/or exports goods or not, the consequences of the UK’s final decision on its Global Tariff are likely to impact every business as it will directly affect the price of the goods coming into the UK, whether used for further manufacturing and production or whether coming in as competing products to UK manufactured or produced goods.