The markets are already taking care of this:
Calico Cottage is a family-owned firm in Haddenham, Cambridgeshire, making specialist chocolate and fudge in two factories employing 50 people. Nigel Baker, its managing director, is despairing in his attempts to prepare for a no-deal Brexit: Calico exports 20% of its produce to the EU and uses imported raw materials. Trading on World Trade Organisation rules means a 20% tariff will be slapped on to his exports, a price rise he’ll have to absorb: he sells to Disneyland Paris and says customers won’t pay the extra.
The £ will decline by some 20% – in fact, the £ has already declined by 20%.
Oh, and we can also leave this system:
How EU sugar tariffs work
As the UK is currently part of the EU, we’re subject to EU rules. That will change after Brexit, but we don’t yet know how.
The rules on sugar tariffs depend on several variables, such as the country of origin of the raw material – sugar cane or sugar beet – who produces it, a mill or refinery, and whether it is for direct consumption or additional refining. Getting it correct is important because getting it wrong can be expensive: tariffs vary between €419 and €90 per tonne.
The basic tariff for importing direct consumption sugar into the EU is €419 per tonne. So, every tonne of sugar imported from a non-EU country costs an extra €419. Raw sugar imported into the EU is to be further refined into white sugar attracts a tariff of €339 per tonne.
Except not every non-EU country pays the above tariffs. The EU also has what it calls its preferential tariff structure. The import duty for raw sugar is only €98 per tonne if imported from a ‘CXL’ country, which includes Australia, Brazil, Cuba and India. But only for sugar destined to be refined into white sugar.
Least Developed Countries (LDC) and African, Caribbean and Pacific (ACP) countries trading under Everything but Arms (EBA) have unrestricted, tariff-free imports of raw sugar into the EU.
If things weren’t complicated enough, if a mill outside of the EU is producing raw sugar which it sells as, for example, brown sugar for direct consumption, then it pays the full €419 per tonne tariff.