REVEALED: COST OF NO DEAL

Family car could soar by £2,000 ++ Food and clothes may rise too++ But will TVs be cheaper?

BRITAIN would impose stinging new tariffs on certain European imports in the event of a No Deal Brexit which could add £ 2,000 to the cost of a typical family car.

If introduced, the regime would force up prices on a range of products from cars to food and clothes.

But at the same time, tariffs would be removed on many imports from outside the EU such as China and the US.

Last night business leaders said the levies would be a ‘sledgehammer’ to the UK economy, while trade unions warned they would lead to a flood of cheap imports, harming industries such as steel.

Meanwhile, the European Commission confirmed it could impose tariffs on UK imports at the same level as those from other non-EU countries with no trade agreement, increasing the cost of British goods in Europe.

The Government set out its long-awaited pricing regime in the event of No Deal yestariffs terday afternoon – before MPs voted to rule out such an outcome. However, last night’s vote is not binding – meaning No Deal could still happen on March 29.

The new regime would come into effect the next day. It would mean 87 per cent of goods would be tariff-free, up from the current 80 per cent.

But levies would be maintained, or added, to protect some industries – including agriculture, ceramics and the car industry.

To comply with World Trade Organisation rules, tariffs on particular goods must be the same on all countries.

It means tariffs would be placed on goods from EU countries where they had not existed before, increasing prices. It would also mean only 82 per cent of goods imported from the EU would be tariff-free, compared with 100 per cent at present.

On the other hand, high EU on goods from non-EU countries would, in many cases, be replaced by lower ones, cutting prices.

As a result, 92 per cent of imports from the rest of the world would pay no border duty, up from 56 per cent now.

The unilateral and temporary regime includes levies of 10.6 per cent on European cars and trucks which had previously been free of tariffs.

This could increase the cost of a typical family hatchback by around £2,000. Volkswagen has already said it would pass on the cost to the consumer. Car parts, however, would face no extra tariffs to avoid disruption to supply chains.

The new regime would also introduce tariffs for the first time on EU goods such as beef, chicken, lamb, pork and butter if MPs vote to leave without a deal.

At the same time, the price of other imported goods such as oranges, onions, jam, TVs, carpets, batteries and spoons could fall significantly – as tariffs are slashed to nothing.

Ministers said that, overall, the changes would represent a ‘modest liberalisation’ of the UK’s tariff regime, with many goods subject to a lower rate than currently applied under EU rules.

But Confederation of British Industry director-general Carolyn Fairbairn told BBC Radio 4’s Today: ‘What we are hearing is the biggest change in terms of trade this country has faced since the mid-19th century being imposed on this country with no consultation with business, no time to prepare.

‘This is no way to run a country. This is a sledgehammer for our economy.’

Adam Marshall, director general of the British Chambers of Commerce, said the ‘abruptness of changes to tariff rates ... would be an unwelcome shock to many of the businesses affected’.

Steve Turner of the Unite union said: ‘Reducing tariffs to zero on the majority of imports, including steel, would destroy jobs and leave UK manufacturers competing with both hands tied behind their backs.’

‘No time to prepare’