Zero tariffs could “kill off some sectors of industry overnight”

Business leaders and trade unions have issued urgent warnings to government to stop gambling with the nation’s world-leading manufacturing sector and cease their plans for a wholesale reduction in import tariffs.

Container ship at sea carrying containers with flag of China - import export zero tariffs - supply chain - image courtesy of Depositphotos.
Zero tariffs makes the UK’s emerging trade remedies system ineffective from the outset – image courtesy of Depositphotos.

Next week, politicians are expected to legislate on implementing zero tariffs on imported consumer goods in “as many areas of possible”.

Such a move has the potential ruin the home market for UK-based producers of ceramics, glass, steel, chemical, paper, mineral products and renewable energy.

It would lead to increased imports flooding the market, jeopardising tens of thousands of jobs and fundamentally changing the British economy, industry leaders have warned.

The Manufacturing Trade Remedies Alliance, (MTRA) – made up of eight national trade associations, three trade unions and the TUC – has called on politicians to rethink their plans for a wholesale reduction in import tariffs.

The idea of a new tariff regime is something which should be subject to “proper consultation” and that the risks of such a policy need to have been “fully evaluated”, said head of International Trade at the Chemical Industries Association (CIA), Ian Cranshaw.

“With less than 40 days to Brexit, British manufacturers already dealing with uncertainties are now having to assess how their business might be impacted by an increase in non-EU competition should the government remove MFN tariffs on key chemical products.

Chief executive of the British Ceramic Confederation and chair of the MTRA, Laura Cohen, said: “This cuts to the heart of the sort of country we want. We want to make Brexit a success for UK manufacturers, but removing tariffs will give a leg-up to foreign competitors.

“Our domestic market would be jeopardised at the same time as our export markets would be subject to additional tariffs, for example 12% on tableware going into Europe, where previously it would have been zero. No tariffs makes the UK’s emerging trade remedies system ineffective from the outset by lowering the duty paid on dumped imports.”

Jude Brimble, GMB national secretary, described the move to zero tariffs as “short-sighted” and something which could “destroy the proud history of making and manufacturing in Britain.”

Neil Gore, managing director at The Imperial Bathroom Company, commened: “This is the moment we need politicians to stand up for our ceramics industry, jobs and manufacturing as a whole. We’re proud of our history of making and exporting some of the very best of British products around the world. It’s time to challenge the misconceptions about our sector and make our politicians realise it’s worth saving, worth taking pride in.”

Kevin Oakes, chairman of Royal Crown Derby and president of the British Ceramic Confederation, commented: “If a flood of imports ruins the domestic market for British manufacturers, the government’s action to prevent hyper-inflation will be pointless. Tens of thousands of people will lose their jobs and they and their families will no longer be spending and buoying up the economy.  It is crucial for our politicians to open their eyes and see the impact this decision could have.”

The prospect of applying zero tariffs on imported goods as a consequence of a no-deal would kill off some sectors of industry overnight, according to Dame Judith Hackitt DBE – who made the comment while speaking to a roomful of manufacturers this week at the annual Make UK (formerly EEF) manufacturing dinner.