Lower import duties than the EU – finally an advantage of the Brexit for the UK?

Motorbikes, bicycles, bourbon, fish rods, puzzles, toy guns. But also roller coasters, reptiles and camels. The United Kingdom has published a document with American products on which the British government could introduce import duties. The list of products is 417 pages long and more extensive than a catalog of the average web store.

The word be able to Is only crucial here. The British Prime Minister Keir Starmer (Labor) and his ministers have so far responded much more cautiously than politicians in other countries to import duties from the United States. That restraint is part of Starmer’s strategy. Instead of taking countermeasures quickly, he would rather try to use his relatively good relationship with US President Donald Trump and to close a bilateral trading deal, with lower import duties.

The levying of 10 percent that the US will use for British products is already considerably lower than, for example, for goods from the European Union (20 percent) and China (added up about 104 percent). In the British public discussion, this was even called « a first real benefit of the Brexit »: the taxes are half lower than the rate that the UK had received if the country had still been a member of the European Union. Inside rooms, Labor ministers were relieved, British political journalists found.

Inside rooms, Labor ministers were relieved, British political journalists noted

Not triumphantly

« I have struggled in the past to find benefits of the Brexit, but this is one. This is good, » said Darren Jones, State Secretary for Finance (Labor) in an interview With Sky News. To immediately add that the government is not going to triumphantly about this towards Brussels. Labor wants to keep the relationship with the EU good. And the performance of the UK was not that handsome around those taxes, critics said immediately. Governments that have less easy access to the White House than the British were also imposed a ‘basic tax’ of 10 percent.

The US and the UK were already negotiating a trade agreement before Trump’s announcements last week. According to a poll by the British Chamber of Commerce, the business community supports the government approach not to immediately introduce combatives, but to remain in negotiation. Labor does temper the expectations that something like that will come around quickly. Certainly now that President Trump and his team have the trade war with China further escalating and dozens of other countries now also try to make bilateral agreements with the US.

An important part of a deal between the United States and the United Kingdom would be a reduction in the British tax for large technology companies. In 2020, the UK introduced a tax of 2 percent on the income of large social media companies and web stores, for example Meta and Amazon. The US also wants a relaxation of the British standards for food, but that would go too far. Chlorine chicken and hormone hamburgers also form for British a mooring image. Moreover, Labor would like to relax the trade in animal products with the EU, which would only be possible if the UK adheres to the European strict food criteria.

Car manufacturers, aircraft producers and steel factories are hit hardest in the UK by the new taxes. Plus whiskey distilleries in Scotland, which have the US as the most important export market. Cars are at the top of the list of British export products and of all cars almost a third went to the US last year. Importers of luxury British cars – Think Aston Martin, Bentley or McLaren – have been paying an import levy of 25 percent in the US since last Thursday. Manufacturer Jaguar Land Rover has stopped export to the US for a month, to find out how to deal with those extra costs.

Chlorine chicken and hormone hamburgers also form a moor for British

Own economy first

In the meantime, Prime Minister Starmer came up with measures to protect his own manufacturing industry at the beginning of this week and help grow the domestic economy. For example, from 2030 the plan was to allow only sale of electric cars, but now hybrid cars can still enter the market until 2035. Luxury brands can also sell petrol cars in those extra five years. And the fines for violating the prohibition are lowered.

Furthermore, the Prime Minister announced 600 million pounds (more than 723 million euros) to investigations in research for medicines and health, plus a simplification of rules for clinical examinations. This week even more of these kinds of announcements would follow. These are measures that the government already wanted to take, Labor politicians admit, but they have been brought forward because of all the economic unrest.

The Office for Budget Responsibility, the British Central Planning Bureau, predicted that the economic growth of 1 percent expected for this year is canceled out by the international consequences of the American import duties. Fewer tax revenues would poorly suggest British Finance Rachel Reeves, since she already has little financial leeway. She and Prime Minister Starmer promised at the beginning of this week that they will not increase some important taxes for the population, so as not to break their election promise about it. Instead, extra cuts on public facilities would be obvious. Also not exactly what Labor wants.

The import duties and the trade war mean « an end to the world as we know it, » Starmer repeated in recent dayswith less established rules and more individual alliances between countries. « We have to improve our domestic competitiveness, so that we are less exposed to this kind of global shock. » But, like political news site Polrico strike: the extent of the measures that Labor has announced so far, « does not exactly correspond to the large rhetoric about the importance of the moment. »

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