Business Leaders Angered By UK’s ‘No-Deal Brexit’ Tariffs

Finance Minister Philip Hammond leaves Downing Street to go to Parliament to deliver his Spring Statement in London on March 13, 2019. Matt Dunham/AP Photo

LONDON—The British government has frustrated business leaders after revealing its plans for temporary tariffs should the UK leave the EU without a deal.

The new tariffs could lead to higher prices on products imported from the continent, such as cars, clothes, and beef, although many imports won’t face increases.

Carolyn Fairbairn, director-general of the Confederation of British Industry, called the tariffs a “sledgehammer for our economy.”

“What we are hearing is the biggest change in terms of trade this country has faced since the mid-19th century being imposed on this country with no consultation with business, no time to prepare. This is no way to run a country,” she told The Associated Press.

Announcing the measures on March 13, the Department for International Trade said in a statement that the tariffs would apply for up to 12 months after a no-deal Brexit and were “designed to minimise costs to business and consumers while protecting vulnerable industries.”

Trade Policy Minister George Hollingbery said in the statement that the majority of tariffs would be set to zero, but would be retained for “the most sensitive industries.”

“It represents a modest liberalization of tariffs and we will be monitoring the economy closely, as well as consulting with businesses, to decide what our tariffs should be after this transitional period,” Hollingbery said.

Full of Anomalies

However, business groups accused the plan of being full of anomalies. For example, sheep farmers will be protected under the new tariffs, but vegetable growers will not. Complete cars will incur tariffs, but car parts won’t, in a bid to maintain the supply chains for British automakers.

Under the current system, all imports from the EU are free of tariffs, whereas under the new proposals, 82 percent of imports would be tariff-free.

However, 92 percent of imports from the rest of the world would pay no border duties, an increase from 52 percent now.

Trucks line up at the entrance to the Port of Dover ferry terminal during delays to the cross Channel ferry, in Dover, England, on March 12, 2019. Gareth Fuller/PA via AP, file

Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, said the announcement doesn’t resolve the devastating effect that no deal would have on the industry.

“No policy on tariffs can come close to compensating for the disruption, cost and job losses that would result from no deal,” he said in a statement. “It’s staggering that we are in this position with only days until we are due to leave.

“Every day no deal remains a possibility is another day companies pay the price in expensive contingency measures,” he added.

‘Damaging Our Reputation’

The announcement came as lawmakers prepared to vote on whether to exit the EU without a deal. Whatever the result, the UK could still exit without a deal depending on the outcome of future negotiations.

Prime Minister Theresa May has said she doesn’t want Britain to leave without a deal.

Finance Minister Philip Hammond also warned of the consequences of a no-deal Brexit when he delivered his Spring Statement on the UK budget on March 13.

“We are not where I hoped we would be today,” Hammond said.

“Our economy is fundamentally robust, but the uncertainty that I hoped we would lift last night, still hangs over us. We cannot allow that to continue: It is damaging our economy and it is damaging our standing and reputation in the world.”