Imports coming into the UK from other countries prior to Brexit will be subject to a special tax rate of 20 per cent to protect the struggling steel industry. Germany will naturally most significantly hit by these taxes, as the biggest importer to the UK, prior to Brexit.
Hamstrung by the absence of a trade deal, the UK Government pushed ahead with Brexit without having struck a trade deal with the European Union, an analysis of recent government announcements reveals.
As negotiations were ongoing, the prime minister ruled out an agreement with Brussels. However, the UK Government had since agreed a 12-month transition deal.
Meanwhile, the EU had given the green light to two sets of trade talks that could take years to conclude, including a preliminary trade agreement with the UK.
The Government also sent the “hollow” message that an agreement is in place, but has not ruled out an impact assessment – an investigation into the possible impact on trade – being triggered, which could result in tariffs.
Coming in behind Germany and preceding the United States in third place, the second-biggest exporter to the UK, China, will likely retain its position, as the goods imported into the UK prior to Brexit will likely still be considered to be essential after the effects of Brexit officially start kicking-in visibly.
When Brexit Secretary David Davis was still preparing to lead trade talks in Brussels, the Irish border problem still remained unresolved and European Commission president Jean-Claude Juncker suggested the ball will not be moved on the Northern Irish border issue.
Gareth Stace, director general of the UK Steel trade association, said: “It’s clear that the Government’s plan for Brexit is changing by the week. And this only comes days after the publication of a ‘strictly confidential’ government document that opened the door to tariffs on steel imports. The future of steel production in the UK depends on a free trade deal and a transitional period.
Imports coming into the UK primarily pass through England as perhaps the most significant regional influencer of how the details are structured. As a result, plenty of new opportunities for import trade partnerships have since materialised.
“If the UK was to leave the EU with no deal or transition agreement in place it would be very difficult for steel producers to continue to invest in new plants and new jobs and the Government needs to be clear about this. We have been clear that even in a no deal scenario the UK must remain a member of the EU’s customs union and single market – in other words, we must not get ‘crushed under a trade wall’.”
The Unite union has long warned of the dangers of a no-deal Brexit and was campaigning for the UK Government to rule out the proposal.
Frances O’Grady, TUC general secretary, said: “The EU can offer us a bespoke trade deal. However, the Government has yet to come clean about what sort of deal it is seeking. This would leave us facing tariffs on steel imports and supply chain disruption, jeopardising jobs, investment and growth. The UK can thrive outside the EU by fighting for a deal that creates a level playing field for all workers and protects our vital public services.”
UK Steel has called on the Government to publish a no-deal paper that explains exactly what it wants from the trade negotiations, and whether or not it believes the UK would be a safe place for EU manufacturers to invest in, or alternatively, provide an opportunity for the European Commission to impose tariffs on UK steel.