Domestic manufacturing companies will become more competitive under the UK’s new independent tariff suspension scheme, experts have said.
It comes after the UK Government revealed plans to launch the initiative next month.
Under the plans, UK traders that use imports will be allowed to ask for duties to be “partially or wholly withdrawn” for a limited period.
This effectively lowers production costs for the whole domestic industry, levelling the playing field between UK and overseas manufacturers.
A similar scheme is already in operation across the EU, but all 27 Member States must agree to a tariff suspension before it can come into force.
Commenting on the launch of the scheme, Greg Hands, Minister for Trade Policy, said: “Now we have left the EU we can use suspensions to give UK firms the maximum possible benefit. This suspensions scheme will be accessible to importers across the country, and those that are granted will benefit entire sectors.
“They will lower costs and help our superb producers pack even more of a punch when they compete on the global stage.”
Welcoming the initiative, the Institute of Export and International Trade (IOE&IT) said tariff suspensions will be particularly useful for companies in the agriculture, micro-electronics and chemicals sectors, who frequently import goods that are “scarce or unavailable locally”.
“Benefits to UK firms are likely to be around imports from countries with which the UK has no trade agreement, potentially if origin is difficult to calculate, although the level of processing and production may determine eligibility,” said IOE&IT Academy director Kevin Shakespeare.
“Imports from countries such as US and Taiwan could gain too, as could energy imports and energy derivatives from the Middle East.”
According to the Department for International Trade, businesses will be able to apply for tariff suspensions from 01 June 2021.
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