Brexit: The aftermath

allezfred

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Goods will be now be subject to a tariff when entering the UK and then again when entering the EU," explains Sam Lowe from the Centre for European Reform.

The new tariff rules won’t affect shop prices in the UK but it will become more costly for UK retailers to provide goods to EU-based consumers and prices may rise accordingly.

Alternatively, retailers could decide to scale down their UK distribution network and scale up their operations in the EU. This is likely to have implications for jobs.

"I’m surprised that retailers are surprised by this," Lowe says.

"This was not a deal dependent issue, there was never going to be a solution to this. Rules of Origin were always unlikely to accommodate the re-export of goods from China".

Retailers have asked the government to try to amend the Rules of Origin covering countries that are not part of the Customs Union set out in the trade deal.

“It is appears that the UK government did not realise what they had negotiated,” one retail executive told me.
 

Louis

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Another ugly surprise: customs charges

Customers in Europe buying products ranging from furniture to pet food from UK companies are receiving unexpected bills for VAT and customs declarations or finding household names have stopped shipping to the continent, as post-Brexit trading rules bite."

[...]
Chris Hickson, a retired logistics and freight forwarding expert living in France, said many people may have been surprised because “they believed the tariff-free trade deal negotiated between the UK and EU meant there would be no extra charges”.

Since the end of the Brexit transition period, however, continental customers must both complete a customs declaration for goods imported from the UK – a procedure generally performed by transporters, for which consumers will be charged, frequently up to €20 per declaration – and pay national VAT.

I admit, this one escaped me, but this is why:
Despite the tariff-free deal, customs duties will apply to goods ordered from the UK that do not originate from Britain. Goods ordered from and manufactured in the UK should not attract customs duty, but products ordered from the UK worth more than that €150 and shipped from outside Britain will.

This is the problem with being outside of the single market and customs union. Curious if this applies with shipments to/from Norway and Switzerland as well? I know there has to be a customs declaration with Switzerland, but I don't recall having to pay import duties on things I've purchased from those two countries.

Again, I wonder if people even realized what they signed up to....
 

GarrAargHrumph

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The UK companies that operate in Ireland/the EU will likely raise prices on items they feel they can; where the market can bear the price increase, while no longer providing the items that they feel they cannot raise prices on, at least temporarily (so you'd see certain items go out of stock). The truly huge retailers who are doing okay financially may keep selling all or most items, but split the price increase - passing part of it on to consumers, and absorbing the rest, for items they feel they really need to be selling (and on the back end, they'll ask their suppliers to foot some of the cost as well.) Some companies may also completely absorb the price increase on their end, if they can do it (with the plan to slowly raise price over time.) These are the approaches I've seen to similar in the US.

This sounds like it could be an opportunity for EU-based retailers to expand in or open up Ireland. Or perhaps a major UK retailer already in Ireland could create a separate corporation for their Irish/EU-based business - they'd split it off and base it in the EU. Or, as the article states, some of these retailers may move their corporate entities to the EU to have access to the wider EU market without going through two levels of tariffs, and then may/may not sell to the UK, depending on cost/benefit.
 

taz'smum

as @Jesche says - мама knows best
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Oh lordy, it looks it is going to require a hard swallow before reading this thread going forward..😪
 

hanca

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Bloody hell, watching the news, I am wondering why US posters are so concerned about UK post Brexit when they have enough of their own s**t to worry about. Is it about escapism?
 

Vagabond

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Bloody hell, watching the news, I am wondering why US posters are so concerned about UK post Brexit when they have enough of their own s**t to worry about. Is it about escapism?
It's solidarity. If you've looked in the U.S. political threads, you must have noticed that many non-Americans are posting there.

Also, as for me, I have lived in the U.K. and have many friends there.
 

hanca

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It's solidarity. If you've looked in the U.S. political threads, you must have noticed that many non-Americans are posting there.

Also, as for me, I have lived in the U.K. and have many friends there.
Well, I hope everything turns out well in the USA. It seems they have one president too many. I understand why US posters have feelings of solidarity towards the UK, but they have enough of their own problems to be taking on some of ours. But thank you for your feelings of solidarity, after all, shared pain is a half of pain, isn’t it? (Please don’t share Trump though! That would be quite oversharing!)
 

antmanb

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This is the problem with everything being up in the air until the final moments - companies didn't know what to do.

A lot of European companies don't want to go through the cost and bureaucracy of registering with HMRC in the UK for VAT purposes which they have to do if they want to sell to consumers. It's much easier to just stop selling in the UK than it is to jump through a lot of hoops. Some companies will do the maths and work out if it is worth it but smaller companies are just going to stop.
 

BlueOrange

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https://twitter.com/uk_domain_names is a quite interesting account regarding the effects of Brexit (with many newspaper articles about this topic).
Edwin Hayward presents himself as the "Author of 'Slaying Brexit Unicorns'. Mainly tweeting about Brexit and the ********, plus occasional fun geeky stuff".
 

BlueOrange

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DB Schenker setzt UK-Landverkehre aus

From Germany: "Schenker AG, the logistics subsidiary of Deutsche Bahn with 76,000 employees and a presence in 130 countries, will currently no longer accept goods for transport to the UK."

Per Google translation:
As reason for the suspension, he cites considerable problems in dealing with the customs formalities that have arisen since Brexit in the movement of goods between the European Union and UK. "Only around ten percent of the consignments commissioned by DB Schenker have complete and correct papers," said the company spokesman. "In the majority of the shipments, however, there are deficiencies in the documents."
 

BlueOrange

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Brexit’s impact on EU exports not as bad as expected, credit insurer says
"European exports are expected to fall by €10 billion rather than an initially estimated €18 billion, according to the company.
Such a drop would be equivalent to less than 0.5% of GDP. Meanwhile British exports are expected to fall by €27 billion, or 1.1% of GDP, as a result of lower demand, more paperwork and a fall in the pound sterling."
 

BlueOrange

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UK refused deal on post-Brexit travel for musicians, says Barnier
Such pettiness!!!

... Barnier said that his negotiators had put forward proposals to exempt musicians and artists from any new visa requirements or restrictions on short-term work on the Continent. The EU's draft legal text, published last March, included a clear exemption from potential new restrictions for several categories of workers including "sportspersons or artists performing an activity on an ad-hoc basis" as well as "journalists sent by the media of their country of residence."

The EU proposal went further, by offering the same exemption to "businesspersons, i.e. persons travelling for the purpose of business deliberations (without being employed in the country of the other Party)." Those exemptions were detailed on Page 354, in an annex to the draft legal text, and the EU also suggested creating a mechanism for modifying the exempted categories as needed.

...British negotiators refused to consider a chapter on "mobility," citing the U.K. government's intention to end freedom of movement after Brexit. The draft chapter on "Mobility" proposed by the EU was absent from the final trade deal reached on Christmas Eve."
 

BlueOrange

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With Brexit done, reality dawns that frictionless UK-EU trade is no more

The Food and Drink Federation, backed by some EU counterparts, warned that UK distribution hubs would struggle to function because goods imported tariff-free into the UK from Europe were then facing full EU tariffs when they were spun back out into EU member states.
...

In short, change is coming, and perhaps more change than some had previously understood, and there is no sign of the EU looking to help.

“You can’t expect the UK to remain the food import hub for the EU. It’s not sustainable, and makes no sense in the mid-to-longer run,” said a senior EU official, explaining thinking in Brussels, and drawing the parallel with financial services where Brussels also sees little point in moving to preserve the UK as a “hub”, even if that drives up costs for some businesses.

The prevailing view in Brussels seems to be that given that dual regimes will emerge over time — for financial services and indeed phytosanitary (SPS) regulations — it makes no sense to have the UK as an EU hub for very much. This penny is now starting to drop.

On a micro level, this means that some businesses will simply stop trading with the EU because it becomes too expensive — or move to split their supply chains to avoid having to do cross-Channel trade, shrinking their UK footprint in the process.

...
"Unless the deal changes in some material way we’re going to see the re-engineering of almost all the EU-UK and GB-NI supply chains over the next 6-9 months," Ian Wright, the head of the UK Food and Drink Federation told the House of Commons Future Relationship Committee.

"There will be easements, there will be fixes, there will be work-arounds, but essentially if nothing changes in the composition of the deal we will have to see a significant re-engineering, which in the short terms means there will be costs and time wasted for supply to reach the shelves and in the long term will be costs and changes and fairly significant changes to the way in which manufactures in the UK and EU interact.""
 

BlueOrange

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The Brexit Effect: the squall before the storm

"At a lunch with EU ambassadors on Wednesday, the President of the European Commission Ursula von der Leyen is understood to have given a frosty response to the volley of complaints from UK businesses about how difficult it all is, especially the rules of origin issue.

"She referred very briefly to some of the problems that had arisen and she took an extremely hostile, frosty line," says one source, "basically, that the EU will have to remain calm and the UK will have to adapt. The UK has chosen to put itself in this position because it dropped out of the customs union and single market."

There is a view in Brussels that the market - and the UK (and Ireland) - will have to adapt to new realities.
"The UK has been a considerable hub for distribution into the EU," says one EU diplomat. "You had all these products going from the EU to the UK, being repackaged and processed in a light way, and then coming back. The general view is that can't continue. Or, it's going to have to continue in a way that is compatible with the rules."
 

BlueOrange

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Ireland’s mounting Brexit woes unlikely to convince EU to reopen deal

"Irish companies hoping that difficulties in trade with Britain could be eased by tweaks to the rules from Brussels may be in for a disappointment.


There is a profound lack of appetite in the European Union for the deal to be reopened or tweaked, particularly only a fortnight into its implementation as the ********* continues to rage.

The attitude from the EU is: Britain has received what it asked for.

The trade friction now being seen, which all but rules out Britain’s future as a distribution hub for the Irish market, is the consequence of its policy position of leaving the single market and customs union, set down years ago by Theresa May as prime minister.

Britain was offered a way to avoid onerous checks on animal and food products if it aligned with the EU. London declined, explaining that the point of Brexit was to diverge.

In other words, what is happening is a result of Britain’s choices. This includes the strict rules of origin that are impeding EU goods destined for Ireland if they come via a British distribution hub."
 

Louis

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I understand small traders, but I'm a bit surprised that more international companies didn't anticipate the issues. Since the Theresa May days, the direction has been clear and the problems obvious. With Boris taking over, the position wasn't going to get any softer. A lot of this could have been de-risked by moving distribution hubs to another location during the transition period.
 

BlueOrange

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In order to avoid red tape issues in UK, some hauliers are using direct connections from Ireland to France: Rosslare-Dunkirk and Cherbourg-Rosslare / Dublin-Cherbourg.

Brexit: Truckers arrive ‘fresh and well-fed’ after first Rosslare-Dunkirk sailing
Danish firm DFDS running direct service seen by many as a means to avoid landbridge ‘chaos’

Ferry firms offer new Ireland to France sailings due to Brexit delays
Two new ferry services direct from Ireland to continental Europe are set to start next week in response to a sharp increase in demand from hauliers for additional capacity bypassing the UK following Brexit
 

allezfred

Lipinski Stole My Catchphrase
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I understand small traders, but I'm a bit surprised that more international companies didn't anticipate the issues. Since the Theresa May days, the direction has been clear and the problems obvious. With Boris taking over, the position wasn't going to get any softer. A lot of this could have been de-risked by moving distribution hubs to another location during the transition period.
They weren't helped by the UK government not deciding what they were going to do until the last possible moment. I am sure many anticipated some disruption no matter what happened and decided it would be worth it rather than trying to guess all possible permutations....

Anecdotally, was in an Marks and Spencer today and the shelves were back to being fully stocked so it looks like they had worked out whatever distribution problems they were having.
 

BlueOrange

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Brexit: 'Most difficult week I've had in this job in 20 years'

Post-Brexit customs systems not fit for purpose, say meat exporters
The British Meat Processor Association said even experienced exporters were struggling with the system.

Shock Brexit charges are hurting us, say small British businesses
Levies to cover the increase in red tape, VAT and customs declarations are hitting trade to the European Union

£34bn Brexit VAT bill pushes companies to the brink
Businesses across the UK are struggling to get to grips with new post-Brexit VAT rules that are adding billions of pound to operating cost and could send many smaller businesses to the wall.

Businesses facing Brexit VAT pressures
New VAT rule on imports could affect the UK’s competitiveness due to cash flow disadvantage
 
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BlueOrange

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