UK to end 25% retaliatory tariff on US milled and broken rice from June 1

The UK government has agreed to lift the 25% retaliatory tariff on US milled and broken rice imports from June 1, it said late March 22.

The tariff is currently placed on the total delivered cost of the goods, making concluding competitive trade into the country incredibly difficult given the rapid rise in freight rates since the onset of the COVID-19 pandemic.

The EU imposed the retaliatory tariffs in June 2018 -- when the UK was a part of the EU's customs union -- following the US government's announcement of the Section 232 tariff on steel and aluminum imports from various countries, including the UK and the EU.

While the EU agreed with the US government to drop retaliatory tariffs Jan. 1, this had to be separately negotiated with the UK government due to the UK since leaving the EU customs union.

The news has been welcomed by the US rice industry, with Betsy Ward, President and CEO of USA Rice, saying March 22 that "rice exports have been unnecessarily caught in the crossfire of the steel and aluminum trade wars for nearly four years, impacting decades of business relations with our customers in Europe... We believe this will help pave the road for US-UK Free Trade Agreement negotiations to restart and further deepen our trans-Atlantic relationship."

Outside of a limited duty-free quota, US rice will only be subject to a GBP121/mt ($160/mt) tariff on white rice and a GBP25/mt ($33/mt) tariff on brown rice from June 1.

As of March 10, US rice exports to the UK in the marketing year 2021-22 (August-July) totaled 12,219 mt, according to the US Department of Agriculture, with 10,500 mt of outstanding sales yet to be shipped.