No-Deal Brexit Threatens UK Retail Industry with Massive Tariffs
- UK supermarkets could face a £3.1bn tariff ‘bombshell’ if no Brexit deal is agreed with the EU
- 85% of EU food imports will face tariffs of over 5% without a deal
- Average tariff on food imported from the EU would be over 20%
- Non-food items also subject to tariffs
- BRC calls for zero-tariff, zero-quota trade deal between UK and EU
- Increases in physical checks and paperwork will further increase costs for retailers
The British Retail Consortium (BRC) has warned that UK supermarkets and their customers could face a £3.1bn tariff ‘bombshell’ unless a Brexit deal is agreed with the EU in the coming days. Without a deal, this increase in tariffs will leave retailers with no choice but to raise food prices and mitigate these new costs. The BRC has called for a zero-tariff, zero-quota trade deal between the UK and EU under its ‘Fair Deal for Consumers’ campaign, warning that many households cannot afford higher prices for their weekly food shop. If a No-Deal Brexit occurs, non-food retailers will also face large tariff bills for EU-sourced products, making the total cost to UK retailers and customers even higher. The UK has published a new tariff schedule that applies from 1 January 2021 if no deal is agreed, with 85% of foods imported from the EU (the source of four-fifths of UK food imports) facing tariffs of over 5%. The average tariff on food imported from the EU would be over 20%, while non-food items will also be subject to tariffs. Retailers have spent time and money preparing for January 1st, but ongoing uncertainty surrounding new checks and red tape could still cause disruption in the supply of goods.
Factuality Level: 8
Factuality Justification: The article provides accurate information about the potential impact of a No-Deal Brexit on UK supermarkets and customers, citing specific tariff percentages and the need for a deal between the UK and EU to avoid increased costs. It also includes quotes from an expert in the industry. However, it could be improved by providing more context on the BRC’s ‘Fair Deal for Consumers’ campaign and the UK’s new tariff schedule.
Noise Level: 3
Noise Justification: The article provides relevant information about potential consequences of a No-Deal Brexit on UK supermarkets and customers, and offers insights into the impact of increased tariffs and other barriers. It also highlights the need for a deal between the UK and EU to avoid these issues. However, it could benefit from more in-depth analysis or discussion of possible solutions beyond the BRC’s call for a zero-tariff zero-quota trade deal.
Financial Relevance: Yes
Financial Markets Impacted: UK supermarkets and non-food retailers
Financial Rating Justification: The article discusses potential financial impacts on UK supermarkets and non-food retailers due to Brexit, including increased tariffs and disruption in supply chains, which could lead to higher prices for customers. This affects the financial markets as it may impact their stocks and overall performance.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no extreme event mentioned in the article.
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