Boris Johnson to Use High Tariffs as 'Leverage' in Trade Negotiations With EU, US - Report

As the United Kingdoms is about to finalise its divorce from the European Union, British officials are also currently preparing for long and contentious talks with the remaining 27 member states, as well as some non-European nations, over the future of mutual trade agreements.

British Prime Minister Boris Johnson could threaten the European Union, the United States, and other countries with high tariffs as “leverage” to pressure the nations to conclude trade deals with Britain, The Times has learned.

While signing the EU divorce agreement @BorisJohnson said:
"Today I have signed the Withdrawal Agreement for the UK to leave the EU on January 31st, honouring the democratic mandate of the British people. This signature heralds a new chapter in our nation’s history."

The strategy of threatening trade partners with high tariffs in order to accelerate trade talks was allegedly discussed by Boris Johnson and his cabinet ministers who agreed during a meeting of the EU exit strategy committee on Thursday that the proposal should be put up for consultation.

The move could potentially result in taxes of 10 percent on cars from Germany and 30 percent on some types of French cheese, while several countries, such as Japan, the US, Australia and New Zealand, will reportedly be prioritised and marked as “tier one” states during trade talks.

Downing Street hasn't commented on the report so far.

According to a report by The Sun , Johnson wants to strike Britain’s first post-Brexit trade deal with Japan, and before the end of the year, in a bid to whip up a bandwagon. Cabinet ministers have agreed to pursue an agreement with Tokyo at lightning speed, with hopes rising among nation’s leaders that it could be wrapped up in the Autumn.

Prime Minister Shinzo Abe’s aides have told No10 he wants a deal as soon as possible, with insider saying it will break new ground on the digital and financial services sectors. Insiders have dubbed it ‘EU Plus Plus’, as it goes further that the EU’s recent deal with Japan.

The PM is keen to strike the Japan agreement ahead of one with the EU and the US in a demonstration to both how swiftly Brexit Britain can move.

Britain, which is finally set to leave the European Union after three years of negotiations on 31 January, is expected to continue discussions over trade conditions and agreements in the course of an 11-month transition period, until 31 December. 

According to the newspaper, Britain’s trade negotiation plan will be announced by Boris Johnson in the first week of February.

“It will really help to show Brussels as well as the rest of the world we’re ready to go.”

Chaired by the PM, the committee of the Cabinet’s most senior ministers also agreed to prioritise four countries in total for early trade deals – known as Tier One - as well as the EU.

They are Japan, the US, Australia and New Zealand, and negotiaions on all are expected to begin by the Spring.

Other countries where deals are expected to take longer have been bracketed as Tier Two, and include Canada.

The XS committee meets again next Thursday to thrash out tricky details of the negotiations, such as how flexible the UK is prepared to be on agricultural products.

Brussels earlier suggested that London could benefit from zero tariff trade with the bloc if stays tied to EU regulations, an option that was rejected by Boris Johnson, who pledged to break away from the bloc’s rules.

On Thursday, US Treasury Secretary Steven Mnuchin said a trade deal between the US and Britain would be “an absolute priority for President Trump” and is expected to be completed by the end of 2020, while citing comments by UK Chancellor of the Exchequers Sajid Javid that both American and EU trade deals were desired to be struck this year, despite a tight and “aggressive” deadline.