Temporary fashion tariffs revealed for no-deal Brexit scenario
today Oct 9, 2019
With Brexit looming, no deal in place and the chances of an extension to the UK’s EU membership being unclear, the British government has unveiled new temporary tariffs that would apply to clothing products imported from developed countries if a ‘hard’ Brexit is the eventual outcome.
Import tariffs would range from 8% up to 12% for a selection of products that previously came into the country tariff-free, if a no-deal exit happens.
And the impact looks set to be big in certain areas with the number of items now attracting tariffs having grown from 97 to 140. Included on the list are women’s blouses, trousers and jackets made of cotton or wool. Given that these are among the most widely used materials, that's a huge number of items. In menswear, tariffs will now be applied to pyjamas (both men’s and boys’), as well as woollen cardigans and sweaters, and swimwear (again, both men’s and boys’).
But the government also said 88% of total imports will still get tariff-free access to the UK.
The new tariffs would apply for 12 months with talks around permanent import taxes due to happen in January. They’re being applied, as mentioned, to developed countries, with the government saying developing countries would still get tariff-free preferential access to the British market. That means countries such as Bangladesh, Armenia and Bolivia, among others, wouldn’t face extra charges.
But while this could mean UK companies switching manufacturing to tariff-free countries, this is easier said than done at short notice and tariffs being introduced only 23 days before the UK leaves the EU is something of a nightmare for retailers and clothing companies.
The implications are huge, not only for UK businesses but also those in developed European countries for which Britain is a big market. They could see falling orders from UK stores and would also have to cope with higher costs if they wanted to continue importing British brands as the EU imposes new tariffs too.
While some retailers and manufacturers across the UK and Europe will be expected to absorb as many of the extra costs as they can, it would be impossible to swallow all of the new costs without seriously undermining their businesses. And there's also the uncertainty factor to take into account. Companies have been reporting for months that orders are being delayed due to this uncertainty, and with little clarity about whether the UK will be in or out of the EU this time next month, that order reticence appears to be continuing.
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