UK trade department ghosts business over tariff cut requests

EuroActiv Politico News

LONDON — British businesses have been left waiting after the government ignored their pitches for import tariff tweaks and instead pushed forward with its own plan for blanket cuts to deal with the soaring cost of living.

Firms have been waiting 12 months for a response to detailed submissions they put together on reducing taxes on goods entering the U.K. border.

The government requested the post-Brexit pitches in June 2020 and businesses and trade groups responded with ideas for cuts on dozens of tariff lines. But the proposals were met with silence.

Almost 240 tariff cuts were requested across numerous sectors, including food and drink, chemicals, manufacturing, colorants and electronics. For example, the Princes food brand asked for tariffs to be lifted on a host of imported juices, while the Autocraft Solutions Group asked for easements on used diesel engines.

After failing to take the proposals forward, ministers instead floated wide-ranging tariff cuts in what was seen as a rushed response to the U.K.’s cost of living crisis. The trade department was ordered to investigate the idea by No. 10 Downing Street — although critics argue blanket cuts could reduce British leverage in trade deal talks.

The government moves have left businesses scratching their heads.

Dominic Goudie, head of international trade at the Food and Drink Federation (FDF), said a unilateral tariff cut right now would “do little to address the cost of living issues but it would severely undermine the U.K.’s ambitious trade negotiations and could have damaging impacts for the U.K.’s food security.”

He added that if the government wants to cut tariffs, “a good starting point would be taking a decision on tariff suspensions that have been outstanding since last summer.”

“With those confirmed, government could work with industry to identify additional time-limited emergency tariff suspensions to ease price pressures, but without harming talks with key trade partners.”

A senior executive at a business group that put in requests for tariff suspensions said: “We’re still waiting for answers and are wondering why action has been delayed given such a move could be viewed as a Brexit benefit, giving a boost to U.K. competitiveness.”

The British Soft Drinks Association helped put together a request to get two commodities codes on orange juice products suspended, and has since written to ministers to ask about the lack of response. The codes account for a 12 percent tariff on orange juice imports, according to the BSDA.

“A tariff suspension lowering the cost of importing oranges would benefit U.K. consumers and the U.K. economy by ensuring a continued supply of quality products, a potential reduction in retail prices and the growth of the category which, in turn, would increase production and employment opportunities,” said BSDA director Gavin Partington.

Despite enthusiasm elsewhere in the Cabinet, trade ministers are against wholesale tariff cuts, as are some experts, who also fear the move could harm British leverage in trade negotiations. But others in government are pushing the idea. If it does go ahead, easements are expected to be time-limited.

A DIT spokesperson said the government is “carefully assessing the high volume of applications received and will publish the outcome once that process is complete.” The spokesperson added: “Any resulting suspensions will come into force shortly after.”

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