Threat of EU trade war grows

By Paul Kelly in News Posted: 26th, May, 2022

After the Prime Minister’s trip to Northern Ireland last week failed to win any concessions, to end the dead-locked political situation, the government announced plans to table legislation that will scrap parts of the Northern Ireland protocol, triggering fears that it could initiate a trade war with the EU.

While the EU could launch lengthy legal proceedings that could result in the UK being fined, the real fear is they may terminate the trade deal with the UK and impose tariffs on all British exports to the bloc. And Britain’s former ambassador to the EU, Sir Ivan Rogers, has warned that the threatened legislation wouldn’t even have to come into force, for the EU to think that it was entitled to retaliate.

Brussels wants to formalise proposals aimed at easing frictions on the border between Great Britain and Northern Ireland, to show that they provide workable ways around the impasse over the Northern Ireland Protocol.

EU officials are already working on a package of possible goods to hit with tariffs, although Brussels’ first step would probably be to restart legal action, that it paused in July 2021, for failing to implement full border checks in Northern Ireland.

While hopes remain that the EU will restart the legal proceedings that could result in the UK being fined, the real fear is they may terminate the free-trade deal with the UK and impose tariffs on all British exports to the bloc.

The imposition of tariffs could be triggered quite quickly and the EU could also increase invisible barriers like border checks, to disrupt Channel trade and even if the UK does not retaliate, there could be shortages and price rises, which would be deeply unpopular, at a time of rampant inflation, a cost of living crisis and looming recession.

The UK has already been ejected from the EUs flagship Horizon research and innovation programme, because it has no trust in the current government and the EU could take similar steps in other areas.

Global Forwarding’s expert customs teams in the UK and EU are at the forefront of UK/EU customs brokerage, providing compliance solutions, guidance and support in line with the regimes in force on both sides of the Channel.

Preparing and submitting customs declarations and associated paperwork, our dedicated customs team simplify compliant border processing, in either direction, which means we are well positioned to react swiftly to any changes in the UK’s trading relationship with the EU.

To discuss your situation, see how we simplify EU/UK customs compliance or to learn about our ‘Free Circulation’ DDP solution businesses of all sizes, please EMAIL or call Chloe Henshall, our Logistics & Customs Compliance Manager.
+44 (0) 1614367041.

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