UK to levy US$655 million of new tariffs on low-value imports

[LONDON] Britain’s finance ministry said on Friday (Nov 21) that finance minister Rachel Reeves plans to raise around £500 million (US$655 million or S$856 million) a year by removing an exemption from tariffs for imports of individual goods costing under £135.

Reeves has pledged not to increase the cost of living for British households in her annual budget on Nov 26, but retailers such as clothing chain Next and rival Primark-owner Associated British Foods (ABF) have lobbied against what they see as unfair competition from overseas stores.

While major retailers must pay tariffs on many goods they import in bulk, Britons who buy similar items direct from online retailers, often based in China, do not have to pay tariffs if they cost below a certain amount.

“It’s time to make sure our local shops can compete fairly with overseas sellers and keep driving growth and good jobs across the UK,” Reeves said in a statement.

The finance ministry said that Reeves planned to scrap the exemption for imports of low-value items in her budget and launch a consultation on how to implement the new customs arrangements.

“Any impact on consumer prices will be modest,” the finance ministry said.

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Reeves’ actions follow in the footsteps of US President Donald Trump - who scrapped tariff exemptions on imports worth under US$800 in August - and the EU is bringing forward similar plans for imports worth under 150 euros.

“This move closes a loophole that has disadvantaged British business, damaged British high streets and allowed proper safety standards to be ignored and we hope it is implemented rapidly,” ABF chief executive George Weston said in a statement alongside the finance ministry announcement. REUTERS