Brexit | UK publishes tariff rates: how do they work?

Published on 13th Mar 2019

The UK government this morning (13 March 2019) published the tariff rates that would apply to imports if the UK left the European Union without a deal. The government also announced how it would manage the border between Northern Ireland and Ireland in the event of no deal.


Here is a short summary of how these tariff schedules would work.  The final section discusses the Northern Ireland-Ireland border.

How tariffs work

Tariffs are taxes on imports.  Generally, they are paid by importers.  Very often, some or all of the cost is passed on to the consumer.

Tariffs only apply to physical goods

Tariffs are not raised on services.  The rule of thumb is: if you can drop it on your foot, a tariff can be imposed on it.

Tariff codes

Each good has a unique commodity code assigned to it.  Yes, practically every physical good has a code. You use the code to look up the tariff rate payable on that good in a 'tariff schedule'.  It is those tariff schedules that have been published today.

Tariff rate quotas

Some goods are subject to 'Tariff Rate Quotas'.  These allow a pre-set volume of the good to be imported at a reduced or no tariff.  Once that quota is exceeded, imports in excess of the quota are subject to the full rate.

Preferential rates and MFN rates

Imports between countries that have a free trade agreement with each other are often subject to preferential (i.e. lower) or zero rates.  These rates do not necessarily apply to all imports; that is a reason why FTAs are complicated to negotiate.

Developing countries are also often given access to the relevant market at reduced or zero tariffs.  These are known as preference schemes; for example, the EU 'Generalised Scheme of Preferences'.

If a preferential rate does not apply, the tariff applied is the 'Most Favoured Nation' (MFN) rate.  The MFN rate is therefore the default rate for imports from a country to which preferential rates do not apply.  (It can be easier to think of this as the 'least favoured rate'.)

Why are tariffs imposed?

Generally, to protect domestic industries.  That is why the EU imposes very high tariffs on some agricultural goods.  Tariffs are also used as a means of stopping imports being sold at unfairly low prices i.e. as an anti-dumping measure.

Very broadly, tariff rates have been falling across the world in recent decades, as part of the trend to globalised markets.  That is being reversed in some circumstances; for example, the Trump Administration's use of tariffs as an instrument in its multi-faceted trade dispute with China.

The UK schedules issued today

The tariff regime published today will only apply in a no deal situation. It is temporary and will apply "for up to 12 months" while a full consultation is undertaken.

Overview of what has been announced

It is easiest to quote what the UK government has said:

"Under the temporary tariff, 87% of total imports to the UK by value would be eligible for tariff free access.

Tariffs would still apply to 13% of goods imported into the UK. This includes:

  • a mixture of tariffs and quotas on beef, lamb, pork, poultry and some dairy to support farmers and producers who have historically been protected through high EU tariffs
  • retaining a number of tariffs on finished vehicles in order to support the automotive sector and in light of broader challenging market conditions’. However, car makers relying on EU supply chains would not face additional tariffs on car parts imported from the EU to prevent disruption to supply chains
  • in addition, there are a number of sectors where tariffs help provide support for UK producers against unfair global trading practices, such as dumping and state subsidies. Tariffs would be retained for these products, including certain ceramics, fertiliser and fuel
  • to meet our long-standing commitment to reduce poverty through trade, the government currently offers preferential access to the UK market for developing countries. To ensure that access for developing countries is maintained, we would retain tariffs on a set of goods, including bananas, raw cane sugar, and certain kinds of fish."

Today's tariff schedules: detail

The temporary schedules announced today are here (Excel, ODS and HTML format). To find out what the tariff is on a particular good:

The rates are subject to Parliamentary approval.  The underlying 'Tariff of the United Kingdom' is here (1477 pages); this contains the detailed technical information about goods classification.

Preferential rates and Tariff Rate Quotas

The preferential rates and rules of origin that would apply to imports from countries with which the UK has an FTA have also been published.

The Tariff Rate Quota information is here.

The Northern Ireland / Ireland border

The UK government has today also published a note on how it would manage the only UK-EU land border in the event of no deal. That can be read here. Excerpt:

"Today we are confirming a strictly unilateral, temporary approach to checks, processes and tariffs in Northern Ireland. This would apply if the UK leaves the EU without a deal on 29 March.The UK government would not introduce any new checks or controls on goods at the land border between Ireland and Northern Ireland, including no customs requirements for nearly all goods.

The UK temporary import tariff announced today would therefore not apply to goods crossing from Ireland into Northern Ireland.

We would only apply a small number of measures strictly necessary to comply with international legal obligations, protect the biosecurity of the island of Ireland, or to avoid the highest risks to Northern Ireland businesses - but these measures would not require checks at the border."

This would disadvantage Northern Irish businesses, particularly agricultural, as they would not be protected by tariffs in the way businesses in Great Britain would be under the new tariff schedules.

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* This article is current as of the date of its publication and does not necessarily reflect the present state of the law or relevant regulation.

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