This morning (19 May), the UK Government announced a new tariff regime which will replace the EU Common External Tariff ("CET") at the end of the Brexit transition period on 1 January 2021. The UK Global Tariff ("UKGT") includes a most favoured nation tariff schedule, which will apply to all imports from all countries with which the UK does not have a free trade agreement or other preference arrangement (potentially including the EU in the event of a no-deal Brexit).

Under the UKGT, the average tariff rate for imports will fall from 7% to around 6%. The UK has decided to apply customs duties on approx. 40% of trade (down from approx. 53% currently under the CET). 

This is less radical than might have been expected, with some government figures talking of the UK being a "duty free" country similar to Singapore.

Some key highlights include:

* Tariffs have been abolished on a wide range of household products such as fridges (from between 1.9%-2.5% to 0%), freezers (from 2.2% to 0%) and certain everyday items (e.g. dried bakers’ yeast (from 12% to 0%) and cocoa powder (from 8% to 0%)).

* Tariffs are dropping to 0% across a wide range of products used in UK production (e.g. tools for tapping and threading metal from 2.7% to 0%, and spanners and wrenches from 1.7% to 0%).

* Tariffs will be maintained for cars, agriculture, ceramics, clothing, certain food and other goods, meaning imports of these products from the EU will become more expensive under a no-deal scenario.