UK goods face new Canada tariffs in latest Brexit trade blow

Britain’s exports to Canada will be hit with new duties next week after the two countries failed to extend trade rules in negotiations for a new post-Brexit deal.

Two people familiar with the negotiations said there will be no last-minute extension to save British products from facing extra tariffs at the Canadian border on Monday.

The move marks the latest blow to Britain’s faltering trade agenda.

From April 1, British vehicle, chemical and processed foods exporters that rely on EU parts will lose their tariff-free access to the Canadian market. That temporary right had been agreed under the U.K.-Canada trade deal rolled over after Brexit in 2021.

Britain had hoped to swerve the cliff edge as it negotiated an updated trade deal with Canada. But British trade chief Kemi Badenoch froze negotiations in late January over Canadian demands for the U.K. to give market access to hormone-treated beef.

To reopen talks, Canada would need to give in to Badenoch’s requests to extend market access for British cheese, which expired at the start of the year, and the right to use EU parts, the two people said.

“It’s a shame Canada can’t see that now, more than ever, it’s vital for allies to work together and remove barriers to trade, not reinforce them,” a Whitehall figure close to the negotiations said. Like others, they were granted anonymity to discuss the talks candidly.

“The expiry of these limited time provisions have been known by the UK for the past three years since we negotiated the TCA,” a spokesperson for the Canadian trade minister, Mary Ng, told POLITICO.

“It is unfortunate that the UK has decided to pause negotiations with Canada as these provisions wind down, as this can negatively impact UK businesses who export to Canada,” they added. “Our priority will always be to work in the best interest of Canadian businesses and workers.

Some £700 million in British automotive exports will now face a 6.1 percent tariff (£3,000 per vehicle on average) from April 1, with several sectors, including chemicals and processed food, also hit. Chemical exports alone were worth more than £1 billion last year.

“The U.K. has been trying to find a way through with Canada for several months, including Kemi discussing with her counterpart at the WTO in February,” the Whitehall figure said, “but sadly Canada has shown no willingness to agree an extension.”