In 2022, trade-weighted average tariff faced by developing economies are the highest in clothing and agriculture. Graph: UNCTAD

Although tariffs are generally low, high tariffs are in place for some agricultural products, apparel, textiles, and tanning. For example, tariffs above 15% are applied on more than 8% of global trade in food (which make 29% of the products in this group). Tariff peaks for food products are often observed in developing countries of South Asia and Africa.

According to a new report by UN Trade and Development and ESCAP (2023), only 2.6% of all Non-tariff measures are related to climate change mitigation. However, they are highly concentrated on the most traded goods, such as cars and vehicles, machinery, fuels, household appliances and electronics, wood-based products, and plastics, covering overall 26.4%  of global trade. In addition, the South Asian, North American, East Asian and Pacific, and European and Central Asian countries apply climate change-related measures to about 30% or above of their imports.

Source: UN Trade and Development

China

Customs Tariff Law comes into effect

On April 26, 2024, the Ninth Meeting of the Standing Committee of the 14th National People’s Congress (NPC) passed the Customs Tariff Law of the People’s Republic of China, which came into effect on December 1, 2024.

As a specialized law on tariffs formulated by China, the Tariff Law maintains the basic stability of the current tariff system and overall tax burden, improves the existing systems and related policy content, and elevates them to a law. The Tariff Law consists of seven chapters, including General Provisions, Tax Items and Rates, Taxable Amount, Tax Preferences and Special Tariff Collection Circumstances, Collection Management, Legal Responsibilities, and Supplementary Provisions.

Tariffs are a type of tax imposed on imported and exported goods and inbound items, collected by customs at the import and export stages. In recent years, new situations and changes have emerged in the tariff field, making it necessary to formulate a law based on the experience of implementing the current systems. With the promulgation of the Tariff Law, China has legislated for 13 out of the country’s current 18 tax categories, marking another step forward in tax legislation.

Source: Xinhua

On May 17, 2024, the UK government announced that the UK has successfully concluded a key step in joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). Joining CPTPP – which will account for 15% of global GDP with the UK included – means over 99% of current UK goods exports to CPTPP members will be eligible for tariff-free trade. Encompassing 500 million consumers in some of the world’s largest current and future economies, the potential for increased trade is huge. 

British businesses are set to benefit from reduced tariffs and fewer trade barriers, while a Double Taxation Agreement with Peru will alleviate the tax burden on businesses, fostering bilateral trade and investment. The accession to CPTPP is expected to support UK employment and economic growth, allowing the UK to exert greater influence in the global economy and help shape future global trade rules. The UK’s participation will open new markets for British goods and services, reduce red tape, increase trade flexibility, and lower import costs.

On August 8, 2024, Indonesia and Japan agreed on amendments to an economic agreement to reduce or remove trade barriers, Indonesia said, predicting the revision will boost bilateral trade.

Indonesia’s trade ministry said in a statement that Japan will further reduce import tariffs on 112 Indonesian items, including fishery products, fruit, food and beverages.

Indonesia will improve market access for 25 Japanese products, including stainless steel and automotive, under the new Indonesia-Japan Economic Partnership Agreement (IJEPA), which is expected to be ratified next year.

Indonesia’s exports to Japan were predicted to surge to US$35.9 billion by 2028 in light of the revision, from US$20.8 billion in 2023, according to the statement.