Cabinet considers cutting food import tariffs to address escalating cost of living crisis

Wed 27 Apr 2022
Posted by: William Barns-Graham
Trade News

imported foods

The government is considering cutting tariffs on food imports as a way to tackle the cost-of-living crisis.

With inflation at 7% and predicted to go higher, Boris Johnson asked ministers to come up with ideas to bring prices down for consumers.

The FT reports that he is backing a proposal to cut tariffs on foodstuffs which are not produced in the UK, such as rice and oranges.

DIT push back

However, international trade minister Anne-Marie Trevelyan is believed to be resisting the plan as it removes leverage in the UK’s trade negotiations.

Sam Lowe, director of trade at the consultancy Flint Global, said the Department for International Trade had a “bad recent experience” of Canada walking out of trade talks when a unilateral tariff cut was proposed.

He said Canada would be asking “why would we pay for something you’re giving to everyone else for free?”

Other ministers, including Jacob Rees-Mogg, Brexit opportunities minister, back unilateral tariff reductions and see Britain’s freedom to pursue its own trade policy as one of the gains of Brexit.

Brexit freedoms

According to the Sun, Johnson is planning to use Brexit freedoms to help those struggling to make ends meet.

As well as cutting tariffs, another proposal is to tear up red tape to allow more ‘parallel imports’ from abroad at lower prices.

According to the International Trademarks Association, parallel imports – or ’grey market goods’ – “refer to branded products that are imported into a market and sold there without the trademark owner’s consent in that market”.

It is not illegal to buy or sell such goods from abroad, but sellers need to apply for a licence, and this is often a bureaucratic process.

Stockpiling returns

The Guardian reports that UK shoppers have begun to stockpile some essentials, such as cooking oil as grocery price inflation hit its highest level in more than a decade in April.

Last weekend, several supermarkets introduced restrictions on cooking oil purchases as concerned, according to Kantar.

Brexit impact

A report from the London School of Economics (LSE) has also claimed that Brexit has pushed up the price of food imported from the EU.

The thinktank UK in a Changing Europe (UKICE) told the Guardian that new barriers to trade with the EU have led to a 6% increase in UK food prices between December 2019 and September 2021.

Products with a higher EU import share – such as fresh pork, tomatoes and jams – were more severely impacted than items where UK imports were more commonly sourced from the rest of the world.