The British pound appreciated after the U.K. government revealed plans to temporarily remove tariffs on 87% of its imports by value in case Britain leaves the European Union without a deal.
The pound appreciated 0.54% against the dollar to $1.314 at around 9 a.m. London time. The euro slipped 0.37% against sterling to 86.02 pence.
The remaining 13% of imports will still be eligible for tariffs, according to the government's temporary plan released ahead of a crucial parliamentary vote on a no-deal Brexit. Parliamentarians rejected Prime Minister Theresa May's revised Brexit deal with the EU in a 391-242 vote March 12.
The U.K. will impose a combination of tariffs and quotas on beef, lamb, pork, poultry and some dairy products to support local farmers and producers who have been protected by high EU tariffs. The country will also retain duties on finished vehicles but will not apply any additional tariffs on automakers relying on imported auto parts from the EU to avoid disruption to the supply chain. Products from other industries sensitive to unfair trading practices, such as certain ceramics, fertilizer and fuel, will also be protected via tariffs in the event of a no-deal Brexit, the government said.
The temporary trade arrangement will help "support British jobs and avoid potential price spikes that would hit the poorest households the hardest," Trade Policy Minister George Hollingbery said. The temporary import tariffs will not apply to goods imported from the Republic of Ireland, which is member of the EU, into Northern Ireland, which is a part of the U.K., in a no-deal Brexit scenario.
The plan would apply to all of the U.K.'s all other trading partners, except those with which it has free trade agreements and around 70 developing countries which will receive preferential access to the British market. The regime would last for up to 12 months while a full consultation on a permanent approach is undertaken.
"Our priority is securing a deal with the European Union as this will avoid disruption to our global trading relationships," Hollingbery added.