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Government’s zero tariffs plan would be hammer blow to manufacturing

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A proposal for removing import tariffs in the event of a no-deal Brexit would do serious harm to British industry.

Today the government published plans to reduce tariffs on many imported goods to zero in the event of a no-deal Brexit.

The TUC condemns these plans, along with manufacturing unions Unite, GMB and Community, as they will put thousands of jobs at risk and threaten key industries, such as steel, ceramics, tyres and glass.

What are tariffs?

Tariffs are taxes the government can impose on imports and exports. All countries in the EU customs union agree to set their tariffs at the same level.

If the UK leaves the EU without a deal in place, it will leave the EU customs union.

This means it is up to the government to set the rate of tariffs on imports from the other countries.

What is the government proposing?

The government has said that in a no-deal situation it plans to reduce the tariffs currently protecting key industries such as such as steel, tyres, glass and ceramics to zero.

There will be exemptions for some agricultural and manufacturing products, but the overall impact will be an increase in the tariff-free access the UK is giving other countries.

Threats to jobs

This plan will put thousands of manufacturing jobs at risk.

That’s because it will allow imports from other countries to enter our market at very low prices against which it will be difficult for UK manufacturers to compete. 

Countries such as China have been overproducing goods such as steel and tyres for years. Even with the tariffs we currently have on goods like steel and ceramics, China has been dumping its products in our market. This was one of the major drivers of the steel crisis of 2016.

If China and other countries faced no tariffs on its imports of steel, some ceramics, tyres and aluminium, it would be able to dump much more in the UK market and trigger a crisis across the UK manufacturing sector.

Jobs would be at risk not just in manufacturing, but in all connected supply chains that are already under extreme pressure due to Brexit uncertainties.

Threats to future trade deals

If the UK removes tariffs from manufacturing imports, there would be little incentive for countries to sign trade deals with the UK. Without trade deals with other countries, UK exporters are likely to face high tariffs in other countries’ markets. This would threaten UK companies in key goods-exporting industries such as the automotive and chemical sectors, and put thousands of jobs in these industries on the line.

Unions shut out of plans

The government has shown a shameful disregard for workers with today’s announcement. There hasn’t been any consultation with unions over plans that would harm thousands of our members’ jobs. 

The TUC is calling for proper engagement with trade unions and a full impact assessment of these zero tariffs plans to be done immediately.

Take no deal off the table

The dangers of today’s zero-tariffs proposals to workers and the UK manufacturing industry makes it clear why a no-deal Brexit would be a disaster for workers. No deal must be taken off the table. 

We need a Brexit deal that delivers proper protections for the UK manufacturing industry, promotes good jobs and protects rights.