New UK Global Tariff sees tyre duty reduced from 4.5% to 4.0%

The UK Department for International Trade has announced a new UK Global Tariff (UKGT). Announced on 19 May 2020, this replaces the EU’s Common External Tariff on 1 January 2021 at the end of the Brexit Transition Period. As it pertains to the tyre business, while there are various categories, the announcement basically means the new UKGT sees tyre duty reduced from 4.5% to 4.0%. Camel back rubber for use in retreading stays at 0%, while duties cushion industrial tyres are reduced to 2.0% from 2.5%.

The UKGT will apply to all goods imported into the UK unless: an exception applies, such as a relief or tariff suspension; the goods come from countries that are part of the Generalised Scheme of Preferences; either/or the country you’re importing from has a trade agreement with the UK. It does not cover other import duties, such as VAT the precise details of trade remedies measures; or other restrictions on imports, such as anti-dumping, countervailing or safeguards.

According to the UK government, the UKGT is “a simpler, easier to use and lower tariff regime than the EU’s Common External Tariff (EU CET) and will be in pounds (£), not euros”. The move streamlines almost 6,000 tariff lines, lowering costs for businesses by reducing administrative burdens. The changes include scrapping unnecessary tariff variations, rounding tariffs down to standardised percentages, and getting rid of so-called “nuisance tariffs” (those below 2%).

The UKGT also expands tariff free trade by eliminating tariffs on a wide range of products. As a result, 60 per cent of trade will come into the UK tariff free on WTO terms or through existing preferential access from January 2021. The goal is for successful FTA negotiations to increase this.

Bike inner tubes are amongst a number of exceptions that have become zero rated, in this case down from 4 per cent.

The UK has also introduced a temporary zero rate that waives the tariff and VAT for: personal protective equipment (PPE), medical devices, disinfectant and medical supplies from non-EU countries. The government is committed to continuing to waive the tariffs on key COVID-19 items should this be necessary upon implementation of the UKGT in 2021.

International Trade Secretary Liz Truss said: “For the first time in 50 years we are able to set our own tariff regime that is tailored to the UK economy. Our new Global Tariff will benefit UK consumers and households by cutting red tape and reducing the cost of thousands of everyday products.”

We’ve put together a table of a few examples below, but you can download all the tyre-related changes here.

A few examples of what the new rates mean for those in the tyre industry