As the year draws to a close we are still unsure whether the UK will manage to secure a trade deal with the EU before the end of the year and commentators seem divided on the prospects of this being achieved.
Some businesses are looking forward to the prospects of a no deal Brexit other are more fearful. However what ever ones own personal hopes or fears if it happens it will affect us all. In the event of a no deal Brexit, as with all major changes there will be winners and losers. In times like this it is important for businesses to be positive and look for new opportunities which may arise. In this article we will concentrate on some of the (perhaps unexpected) bonuses which might occur in the event of a no deal.
In the event of a no deal UK’s trade with most of the world will be on WTO terms – hopefully with MFN status. The current EU trading rules place punitive duties on a number of items entering the EU – the so called anti-dumping tariffs. We have seen no discussion from the UK government that they intend to introduce their own anti-dumping measures. It seems likely that in the event of a no deal these tariffs will be abolished, at least in the short term. The duties levied by these tariffs are not trivial often amounting to 70% or more. These duties are levied on top of the normal standard duties and will in turn also have VAT levied on them too. In effect this can often double the initial ex works purchase price of the goods. One of the major recipients of these tariffs is China.
As a result UK businesses which hitherto have shied away from procuring in China and perhaps sourced from Europe which, thanks to these anti-dumping tariffs, was more competitive may be well advised to look at this again. There are three good reasons to do this. First with the abolition of anti-dumping tariffs purchasing from places like China could be up to 40% cheaper. Secondly the price of the goods from Europe, previously duty free may now have WTO standard duty applied. Thirdly the inevitable disruption and chaos at UK ports post Brexit makes the easy supply and delivery from Europe less attractive.
Which goods are affected? There are a surprising array of goods affected from basic materials like some steel products including stainless steel and aluminium foil through to ceramic tableware and Kitchenware, and ceramic tiles and bicycles including parts and some electric bikes and scooters hand pallet trucks, coated paper and even ironing boards.
Companies who move quickly to take advantage of the relaxation in these duties, if we do leave the EU transition period with no deal. If you want the full list of products affected by anti dumping duties please get in touch.