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G8 countries’ cost of customs duties rises to $103 billion – even ahead of ‘trade wars’

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May 24, 2019
 
  • Duties now cost 1.24% of $8.3 trillion in G8 imports
  • ‘Trump tariffs’ on steel, aluminium could see duties rise even further

CHICAGO, MI —The cost of customs duties in G8 countries rose 4% last year from $99 billion to $103 billion, even ahead of the global ‘trade wars’, shows a new study by UHY, the international accounting and consultancy network.
 
The G8 countries’ import duties now amount to 1.24% of their approximately $8.3 trillion in annual imports.
 
UHY studied 20 countries around the world, calculating the value of their imports and the cost of duties on those goods and services (see chart below).
 
There is potential for the cost of tariffs to rise even further in the coming years due to the effects of global trade wars. In 2018, the United States introduced tariffs on a range of imported goods including steel, aluminium, washing machines, solar panels, and 818 categories of goods from China.
 
Several US trading partners have since responded by imposing retaliatory tariffs on imports from the United States. This has raised fears of a trend towards protectionism, which would increase costs for businesses and consumers worldwide.
 
UHY research shows that the biggest rise in the revenue from duties among major economies was seen in China, which registered a 26% increase from $37.8 billion in 2017 to $47.7 billion in 2018. China is one of the countries that levied retaliatory tariffs on US imports in mid-2018. However, the two countries agreed to postpone planned mutual increases in tariffs from 10% to 25% following talks in December.
 
US duties cost increased by 6.7% from $62.3 billion in 2017 to $66.5 billion in 2018. On several occasions, President Donald Trump has raised the prospect of the ‘Trump Tariffs’ policy being extended further. This could affect US car manufacturers who build vehicles in Mexico, as well as European carmakers.
 
Rick David, Chairman of UHY, comments: “In an increasingly globalized economy, a trade war could affect both businesses and consumers.”
 
“If trade disputes cannot be resolved by negotiation and result in substantially increased tariffs, there could be an impact not only on the cost of goods, but also economic growth and employment.”
 
Clive Gawthorpe, Partner at UHY Hacker Young in the UK, comments: “The UK is in a very precarious position when it comes to trade deals and tariffs, as it prepares to leave the European Union, the world’s largest trading bloc.”
 
“Some politicians had suggested that the UK would have dozens of trade deals already in place by the time it leaves the EU, but that seems to have been challenging to deliver in reality.”
 
“A no-deal exit from the EU could prompt the Government to waive customs duties on some imported goods, to prevent businesses and consumers from being exposed to a steep rise in costs.”
 
UHY says that Israel is one country that is seeking to decrease the impact of customs duties, following a 14% increase in the cost of duties from $2.5 billion in 2017 to $2.9 billion in 2018.
 
Kobi Shtainmetz, Partner at UHY Shtainmetz Aminoach & Co in Israel, says: “Israel is looking to buck the global trend towards increased barriers to trade that has emerged in recent years. The Israeli Finance Ministry plans to abolish customs duties entirely on a range of household items, at a cost of around $1 billion per year.”
 
“That is in addition to expanding trade deals, such as an exemption on customs duties for vegetable imports from Turkey.” 
 
Thomas Wahlen, Partner at UHY Wahlen & Partner in Germany, says: “There is a lot of uncertainty in the EU about potential future tariffs with the UK.”
 
The biggest rise in the cost of duties among major economies was seen in China, which registered a 26% increase from $37.8 billion in 2017 to $47.7 billion in 2018
 

 
About UHY LLP
UHY LLP is a licensed independent CPA firm that performs attest services in an alternative practice structure with UHY Advisors, Inc. and its subsidiary entities. UHY Advisors, Inc. provides tax and business consulting services through wholly owned subsidiary entities that operate under the name of “UHY Advisors.” UHY Advisors, Inc. and its subsidiary entities are not licensed CPA firms. UHY LLP and UHY Advisors, Inc. are US members of Urbach Hacker Young International Limited, a UK company, and form part of the international UHY network of legally independent accounting and consulting firms. “UHY” is the brand name for the UHY international network. Any services described herein are provided by UHY LLP and/or UHY Advisors (as the case may be) and not by UHY or any other member firm of UHY. Neither UHY nor any member of UHY has any liability for services provided by other members.
 
About UHY, the network
Established in 1986 and based in London, UK, UHY is a leading network of independent audit, accounting, tax and consulting firms with offices in over 300 major business centres across 100 countries. Our staff members, over 8,200 strong, are proud to be part of the 16th largest international accounting and consultancy network. Each member of UHY is a legally separate and independent firm. For further information on UHY please go to www.uhy.com.
 
UHY is a member of the Forum of Firms, an association of international networks of accounting firms. For additional information on the Forum of Firms, visit www.forumoffirms.org
UHY press contact: Dominique Maeremans on +44 20 7767 2621 Email: d.maeremans@uhy.com.
 
UHY is a member of the Forum of Firms, an association of international networks of accounting firms. For additional information on the Forum of Firms, visit www.forumoffirms.org.
 
UHY is an international association of independent accounting and consultancy firms, whose organizing body is Urbach Hacker Young International Limited, a UK company. Each member of UHY is a separate and independent firm. Services to clients are provided by the UHY member firms and not by Urbach Hacker Young International Limited. Neither Urbach Hacker Young International Limited nor any member of UHY has any liability for services provided by other members.
Contact:
Chris Clark, cclark@uhy-us.com
(586) 843-2637

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