The UK Government has announced that it will review the way that low-value, low-volume imports are handled by customs authorities, following pressure from the British Beauty Council and other stakeholders and businesses
Last month, the British Beauty Council wrote to the Exchequer Secretary to the Treasury, James Murray MP, highlighting the need for a wholesale review of the de minimis rule and welcomes the subsequent commitment to review by the Chancellor.
Alongside other industry organisations such as the British Retail Consortium, the Council has long been pushing for review of the rule, which designates the thresholds at which exporters have to pay fees on their goods.
Victoria Brownlie MBE, Chief Policy and Sustainability Officer at the British Beauty Council, said: ‘As ever, it’s important that the beauty industry isn’t overlooked in trade conversations and decision making in Whitehall, particularly when it comes to import and export which we rely on so heavily. Our priority is always to ensure a level playing field for UK producers and retailers while safeguarding UK consumers from potentially unsafe or substandard products – this is what we communicated to the Treasury and we’re glad to see action in this space.’
Since the US announced its intention to introduce higher tariff rates, many British businesses have been concerned about the UK market becoming flooded with cheap international goods.
This phenomenon, sometimes called ‘product dumping,’ is because of the rule known as de minimis – which makes it so that goods being brought into the UK worth under £135 are not subject to additional costs.
Many businesses feel that – in the face of higher tariffs – the de minimis rule could lead to the UK being flooded with a huge number of low-value goods, as luxury businesses struggle with rising costs.
In other words, international businesses selling cheap goods could gain a competitive advantage over British businesses if the de minimis rule stays in place.
With the US poised to remove its de minimis rule – the threshold is currently $800 – for imports from China and Hong Kong, international trade could be set to become even more volatile.
That is because businesses in China and Hong Kong will have to pay higher prices to export to the US and may therefore look to the UK as an alternative, cheaper, market.
At the annual IMF Springs meetings in Washington D.C., Chancellor Rachel Reeves said: ‘This government is meeting the moment to protect fair and open trade. Following recent announcements reducing tariffs and support for the zero-emissions vehicles industry, today’s package will help businesses compete fairly with international exporters, supporting a world economy that provides stability and fairness for working people and businesses alike.’
With Europe looking likely to abolish its de minimis rule in the coming months, the Chancellor’s commitment to review is timely.
If you or your business would like to be part of Treasury’s engagement on this policy review, please write to lowvalueimports@hmtreasury.gov.uk
To read more about the Chancellor’s de minimis review, click here.
