The UK government on March 13, 2019 released the temporary rates of customs duty on imports if the country leaves the European Union with no deal. In the case of no-deal Brexit, these tariff rates will take effect on March 29, 2019 for up to 12 months.
According to the announced plan, around 87% of UK’s imports by value would be eligible for zero-tariff in the no-deal Brexit scenario.
Specifically for apparel products, 113 out of the total 148 tariff lines (8-digit HS code) in Chapter 61 (Knitted apparel) and 145 out of the total 194 tariff lines (8-digit HS code) in Chapter 62 (Woven apparel) will be duty-free. However, other apparel products will be subject to a Most-Favored-Nation (MFN) tariff rate ranging from 6.5% to 12%.
Meanwhile, the UK will offer preferential tariff duty rates for apparel exports from a few countries/programs, including Chile (zero tariff), EAS countries (zero tariff), Faroe Islands (zero tariff), GSP scheme (reduced tariff rate), Israel (zero tariff), Least Developed Countries (LDC) (zero tariff), Palestinian Authority (zero tariff), and Switzerland (zero tariff).
On the other hand, the EU Commission said it would apply the Most-Favored-Nation (MFN) tariff rates on UK’s products in the no-deal Brexit scenario rather than reciprocate.
Appendix: UK’s MFN tariff rate for apparel products (HS Chapters 61-62) in the case of no-deal Brexit.
3 thoughts on “No-Deal Brexit: UK’s Import Tariff Rates for Apparel Products”
Europe is home to many of the world’s fashion capitals and nearly every luxury fashion/haute couture house. By isolating the European Union and fashion-driven nations like France and Italy, the UK’s apparel industry will suffer greatly and clothing will be more expensive for consumers, which will reduce consumer purchases, hurting the economy of the UK as a whole. British fashion houses are in limbo as well, since they may import some of the materials used to make their products, which could bear a heavy tax.
I think it is interesting how the post talks about the Most Favored Nation tariff as a response to a no-deal brexit scenario. As we talked about in class, the MFN policy makes sure that whatever happens to one country regarding foreign trade policies must be applied to the others. With this knowledge, it proves the point that the EU commission would treat Britain like any other country. This raises the question of whether or not Britain has already ruined some of the benefits of being part of the EU, like the trade benefits of being a member.
I think that it is interesting that the UK is offering preferential tax duty rates on those specific countries. I think this could potentially be to help those countries continue to engage in trade since places like LDC might not be able to afford these tariffs. I wonder if other countries will take this exception as an unfair exception and try to fight it.