Lidl’s Irish business has reminded British suppliers they are expected to pay any EU import tariffs imposed on goods crossing borders after Brexit.
Currently, as both countries are member states, no tariffs are paid.
But Lidl’s current contracts with suppliers contain a clause saying goods must be delivered with tariffs paid.
The supermarket said it had held workshops with British suppliers to make sure they had the necessary information to “avoid any disruption”.
“We have been working closely for over two years with external consultants, not only to get our business Brexit ready, but also to ensure our valued suppliers are as prepared as possible.
“All existing Lidl contracts contain a DDP (‘delivered duty paid’) clause. In an effort to understand the level of preparedness of key UK suppliers we are communicating proactively with them and working together to resolve any potential barriers to supply,” the supermarket said in a statement.
The delivered duty paid clause means that the cost of transporting goods, including tariffs on EU exports, are the responsibility of the supplier.
In the event of a no-deal Brexit, tariffs on EU exports would come into force automatically, according to World Trade Organization (WTO) rules.
EU tariffs on food can be both high and complex.
On some types of beef it is 12.8% plus 265 euros per 100kg for meat from outside the EU. The average for dairy products is more than 35%.
Suppliers told the Times newspaper that other supermarkets are also likely to enforce deals similar to Lidl’s agreement.
A supermarket source told the newspaper that the potential costs were too high for all suppliers to be able to cover them.
Prime Minister Boris Johnson has said that the UK will leave the EU with or without a deal on 31 October.
While he has committed to cutting most tariffs on foreign goods being imported into the UK, tariffs for goods exported from the UK to the EU are outside of his control.
Dr Peter Holmes, fellow of the UK Trade Policy Observatory, told the BBC: “The UK suppliers will pay tariffs going into the EU, and EU suppliers will pay tariffs going into the UK [if there are any].
“You can avoid this if you sign a free trade agreement, and the UK can unilaterally remove all trade tariffs but it has to do so for all trading partners and this would not remove the tariffs on UK exports to the EU.”
He said that suddenly implementing WTO rules would be a “serious shock” to the economy.
“The point to make is that, tariffs are in general passed on from the supplier to the consumer, so it doesn’t really make any difference who actually directly pays them. If Lidl lines up suppliers to cover no-deal costs, as soon as they can suppliers will pass those costs on, or withdraw from the market.”
Huawei’s chief executive has proposed selling its current 5G know-how to a Western firm as a way to address security concerns voiced by the US and others about its business.
“[Huawei is] open to sharing our 5G technologies and techniques with US companies, so that they can build up their own 5G industry,” the NYT quoted Ren as saying.
“This would create a balanced situation between China, the US and Europe.”
Speaking to the Economist he added: “A balanced distribution of interests is conducive to Huawei’s survival.”
A spokesman for Huawei has confirmed the quotes are accurate and the idea represents a “genuine proposal”.
At present, Europe’s Nokia and Ericsson are the main alternatives to Huawei when it comes to networks selecting what 5G cell tower base stations and other equipment to install.
South Korea’s Samsung and China’s ZTE are other alternatives.
But while American firms including Cisco, Dell EMC and Hewlett Packard Enterprise have developed 5G-related technologies, the US lacks an infrastructure-equipment specialist of its own.
Beyond the licensing fee, Huawei could benefit because it might convince Washington to drop restrictions that currently prevent it buying US-linked technologies for its own use.
One consequence of this is that Huawei faces having to launch an Android smartphone later this month that will not offer Google apps such as YouTube or the Play Store.
A deal would also help ensure Huawei gets its 5G technologies widely adopted.
For instance, 5G supports two different coding techniques for data transmission to help tackle interference.
Huawei has developed a technique called “polar codes”, which it says will give 5G devices longer battery life than an alternative favoured by many Western firms called “low density parity check”.
If polar codes are widely adopted, Huawei will earn more patent fees from device-makers that support them.
One company-watcher, however, suggested Ren’s proposal was doomed to fail.
“Huawei misunderstands the underlying problem,” Hosuk Lee-Makiyama, from the European Centre for International Political Economy, told the BBC.
“The issue is not the trustworthiness of Huawei as a vendor but the legal obligations that the Chinese government imposes on it.
“China’s National Intelligence Law requires Chinese businesses and citizens to surrender any data or ‘communication tools’ they may have access to, under strict punitive sanctions.
“Any equipment or software that Huawei licenses to an US entity would still fall under this obligation, and there is no way that the licensing entity or the intelligence agencies could scrutinise millions of lines of code for potential backdoors.”
But Prof Tsang said the proposal was still a “smart move”.
Even if Huawei’s offer is ultimately rejected, he explained, it demonstrates that the company is willing to go to remarkable lengths to try and win the West’s trust.