Yahoo Finance UK unveils new post-Brexit global trade tariff regime
Britain has just unveiled its new post-Brexit tariff regime to replace the European Union's external tariff.
The UK government confirmed in a statement that it will maintain a 10% tariff on cars but will cut taxes on tens of billions of dollars of supply chain imports under its new regime, known as the UK Global Tariff (UKGT).
It claims that the UKGT will be simpler and cheaper than the EU's Common External Tariff and it will apply to countries with which it has no agreement and will remove all tariffs below 2%.
“For the first time in 50 years we are able to set our own tariff regime that is tailored to the UK economy,” said international trade secretary Liz Truss.
“Our new Global Tariff will benefit UK consumers and households by cutting red tape and reducing the cost of thousands of everyday products. With this straightforward approach, we are backing UK industry and helping businesses overcome the unprecedented economic challenges posed by coronavirus.”
What are the tariffs?
The UK government said it will “scrap thousands of unnecessary tariff variations on products — including over 13,000 tariff variations on products like biscuits, waffles, pizzas, quiches, confectionery, and spreads,” under EU law.
READ MORE: Coronavirus: UK 'can afford higher debt'
It says that the UKGT also expands tariff free trade by eliminating tariffs on a wide range of products, to the benefit of the UK consumer. These include:
Dishwashers (down from 2.7%).
Freezers (down from 2.5%).
Sanitary products and tampons (down from 6.3%).
Paints (down from 6.5%) and screwdrivers (down from 2.7%).
Mirrors (down from 4%).
Scissors and garden shears (down from 4.7%).
Padlocks (down from 2.7%).
Cooking products such as baking powder (down from 6.1%), yeast (down from 12%), bay leaves (down from 7%), ground thyme (down from 8.5%), and cocoa powder (down from 8%).
Christmas trees (down from 2.5%).
How is the UK economy faring?
The latest data from the Office for National Statistics (ONS) on Tuesday revealed that unemployment claims surged by 69.1% in Britain swiftly after the coronavirus lockdown began.
It shows the number of claims for jobseekers’ allowance and universal credit claimants looking for work spiked between March and April, reaching 2.1 million.
On Monday, chancellor Rishi Sunak said that two million self-employed people have claimed income support from the UK government in the first few days of operation. He said two million claims had been made under the government’s self-employed income support scheme since its launch last Wednesday. Grants worth £6bn ($7bn) have been approved.
“Those people will have the money in their accounts within six working days of the claim and of course I will keep the scheme under review,” the chancellor said.
READ MORE: IMF chief warns full global economic recovery unlikely in 2021
The Office for Budget Responsibility (OBR) estimated last week that the government’s coronavirus response would cost £123bn in 2020 alone and push up public sector borrowing to close to £300bn this year.
Meanwhile, the head of the International Monetary Fund (IMF) said the global economy will take much longer to recover fully from the shock caused by the new coronavirus than initially expected.
IMF Managing Director Kristalina Georgieva said the IMF was likely to revise downward its forecast for a 3% contraction in GDP in 2020.
Watch the latest videos from Yahoo Finance UK
