😕 EU Tariffs: United States and Northern Ireland Economy

Commons Chamber

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The UK Parliament discussed the impact of EU tariffs on Northern Ireland’s economy due to the US-EU trade tensions. Secretary of State Hilary Benn explained that Northern Ireland faces the same US tariffs as the rest of the UK, but under the Windsor framework, businesses can reclaim EU tariffs on US imports if those goods stay within the UK. Concerns were raised about the effectiveness of the duty reimbursement scheme and potential trade disruptions, with MPs pressing for government action to protect Northern Ireland businesses. Benn reassured that the government is engaging with the EU and supporting businesses through existing schemes to mitigate the effects of any new tariffs.

Summary

  • The EU has imposed tariffs on goods from the US, affecting Northern Ireland as it is part of the UK’s customs territory.
  • Northern Ireland faces a 10% general tariff and a 25% tariff on steel, aluminum, and cars from the US, similar to the rest of the UK.
  • The Windsor framework allows Northern Ireland businesses to reclaim EU tariffs through a duty reimbursement scheme if US imports do not enter the EU.
  • Concerns were raised about the capacity of the duty reimbursement scheme to handle increased volume, but the government is working with HMRC to ensure it functions effectively.
  • The government is preparing for potential EU retaliatory tariffs but will not publish an impact assessment until the EU’s response is known.
  • Some MPs criticized the government for not doing enough to protect Northern Ireland businesses from the effects of the US-EU tariff war.
  • The government is in talks with the EU and is working on negotiating an economic deal with the US to mitigate the impact.
  • There are concerns that Northern Ireland businesses may be disadvantaged compared to those in Great Britain due to the EU customs code.
  • The government emphasized the benefits of the Windsor framework, such as access to the EU market, while acknowledging the challenges it presents.
  • MPs from Northern Ireland expressed frustration over the lack of clarity and protection for local businesses, calling for more proactive measures from the government.

Divisiveness

The session displays a moderate level of disagreement, primarily centered around the impact and handling of EU tariffs on the Northern Irish economy due to US trade policies. Key points of contention include:

  1. Impact Assessment and Preparedness: There is disagreement on whether the government has adequately assessed the potential impact of EU retaliatory tariffs on Northern Ireland. Alex Burghart (Con) questions the lack of a published impact assessment, while Hilary Benn (Secretary of State) argues that it is premature without knowing the specifics of the EU’s retaliation.

  2. Effectiveness of Duty Reimbursement Scheme: Several MPs, including Alex Burghart and Sammy Wilson (DUP), express skepticism about the effectiveness and timeliness of the duty reimbursement scheme as a solution. This is met with assurances from Hilary Benn that the government is working with HMRC to ensure it functions well, though he acknowledges the need for businesses to provide evidence for reimbursement.

  3. Government Action and Support for Businesses: There is a call from MPs like Carla Lockhart (DUP) and Robin Swann (UUP) for more concrete government action to protect Northern Ireland businesses, feeling that the current assurances are insufficient. Hilary Benn reiterates government efforts and the benefits of the Windsor framework, which some MPs feel does not adequately address their concerns.

  4. Trade Policy and Sovereignty: Jim Allister (TUV) criticizes the lack of control over tariffs, advocating for repatriating control over trade laws to the UK, which reflects broader dissatisfaction with the current trade arrangements and perceived governmental limitations.

These disagreements demonstrate a moderate level of tension and a range of perspectives, but they do not escalate to high conflict or result in significant disruption to the session’s flow, hence the rating of 3.