Trade bodies warn against food import tariff cuts

Business groups are warning the UK government against cutting food import tariffs in a bid to ease the UK’s cost of living crisis.

Two trade associations have argued that such a move would have only a “negligible” impact on soaring household bills while reducing British negotiating leverage in trade deals and potentially putting food supplies at risk.

Dominic Goudie, head of international trade at the Food and Drink Federation (FDF), said a unilateral tariff cut right now would “do little to address the cost of living issues but it would severely undermine the UK’s ambitious trade negotiations and could have damaging impacts for the UK’s food security.”

He said base-rate tariff tweaks should be considered in the long term, and noted that the FDF plans to put forward its own proposals. But firms fear that a knee-jerk move could have a dangerous impact on British imports at a time when food suppliers are under pressure.

Nick von Westenholz, head of trade at the National Farmers Union, said tariff cuts on goods not produced in the U.K. might help consumers, but could mean “indigenous food items get elbowed out by imports of food we can’t produce here.”

Elsewhere, both the British Retail Consortium (BRC) and the Federation of Small Businesses (FSB) said the move would have too little an impact on consumer prices to be worth pursuing. 

“Messing around with tariffs in that kind of respect wouldn’t make much difference to food prices,” reportes quoted Andrew Opie from the BRC, who added that price changes would be “negligible.”

Craig Beaumont from the FSB said cutting import tariffs was a “simplistic idea” and that price changes, in the best-case scenario, could take too long to help with the immediate crisis.

Experts are reportedly divided about whether cutting base-rate tariffs would affect British negotiating leverage. But most agree it would have a minimal impact on prices. Media reports are also revealing a split in the British Cabinet over whether the proposal should go ahead, with Rees-Mogg in favor and International Trade Secretary Anne-Marie Trevelyan sceptical, as she made clear in a recent committee hearing.

The government has reportedly asked the Department for International Trade to assess the impact of cutting base-rate duties amid soaring inflation and pressure on household budgets.