Exports reform
Prestwick Airport could see a dent in its recently-won Chinese freight business after the Chancellor announced new tariffs on low value goods entering the UK.
Rachel Reeves said she intends to raise £500 million a year by eliminating the tariff exemption for individual goods that cost under £135.
The Treasury estimates that almost £6 billion of goods that currently enter the UK without having to pay customs duties would be covered by the change.
It is aimed at ensuring fair competition between British retailers and overseas online stores, especially those based in countries such as China. However, the change will not take effect until 2029 against the wishes of retailers who wanted it to apply sooner.
William Bain, head of trade policy, at the British Chambers of Commerce, said: “There will be winners and losers from this move. Many High St and online retailers have complained about unfair competition from Chinese manufacturers which can significantly undercut them.
“On the losing side are regional airports, which have been major beneficiaries of the surge in freight flights carrying these goods from China. Airports like Prestwick and Bournemouth have seen a big rise in freight traffic from China and additional work as a result.”
Earlier this year Hong Kong Air Cargo extended its global network to include Prestwick Airport in a potential boost to Scottish exports and the Ayrshire airport’s revenue stream.
It included shipments into Scotland from three of the top four e-commerce platforms in Hong Kong: Shein, Temu and TikTok.
The airport has been working with Scottish export associations to increase exports flying out of Prestwick directly to the Far East to avoid trucking goods to London Heathrow.
It posted a fifth consecutive year of operating profit last year.
The Treasury’s move is part of a broader global trend. US President Donald Trump scrapped tariff exemptions on imports worth under $800 in August, and the European Union has also announced similar plans for imports under €150 ($172.65).
UK retailers have called for a more equitable trading environment. Chains such as Next and Primark-owner Associated British Foods, have lobbied for the changes, arguing that the current tariff structure allows foreign stores to undercut British prices.
George Weston, CEO of Associated British Foods, which owns Primark, supported the move, saying it would close a loophole that disadvantaged British businesses. He also highlighted concerns about safety standards being overlooked in products imported through online retailers.
“This move closes a loophole that has disadvantaged British business, damaged British high streets, and allowed proper safety standards to be ignored,” Weston said, welcoming the government’s plans to address the issue.”
The British Chambers sees the change as part of a wider move to reform customs.
Mr Bain said: “In making these changes from 2029, it is important the Government keeps a level playing field with the EU and US to maintain our strong trade ties.
“But in a world of increasing trade complexity the government should use this opportunity to make more comprehensive customs reforms.
“To grow our economy, we must make it quicker, simpler and cheaper to bring in and export goods from the UK. The EU is already conducting the biggest customs reforms in a generation, and the US is changing the role of its customs agencies too.
“The UK needs a modernised rulebook, the rollout of digital trade corridors with a wide range of trading partners, a clear timeline for a Single Trade Window, and better customs co-operation with the US and EU.
“These changes on customs duty charges should be part of that, so all businesses benefit from lower costs and greater efficiency in trade.”
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