Let the UK be a voice for free trade

Most economists and most western governments agree that the more you free trade the more prosperous the participating countries will be. It is clearly true in theory. If Country A removes tariffs or other barriers to importing better and cheaper items it will be better off by the amount it saves on the imports, whether the other side similarly liberates or not. If both sides remove barriers then clearly both will be better off, as each will concentrate on what they are best at, lifting the buying power and living standards in both countries.

Today the theory of free trade and international specialisation is under threat, both from Mr Trump who thinks tariffs and a trade war might be good for the USA, and from China, the EU and others who impose tariffs and non tariff barriers against trade whilst claiming to believe in free trade. It is the huge German/EU surplus on its US trade, and the Chinese surplus with the USA that has triggered Mr Trump’s interest in the first place. He argues that there is an excessive imbalance because China and the EU do not play fair. He points to cheap currencies, state subsidy of overcapacity and below cost prices for some Chinese goods, and the EU tariff of 10% on all imported cars as part of his case. He says he wants to rework NAFTA and explore bilateral trade deals that are fair to the USA and to the other party. He thinks a bad trade deal is damaging to US interests, undermining jobs and incomes at home as the US comes to rely on cheap imports and foreign exchange borrowings to pay for them. He points to high levels of protectionism on agricultural produce in the EU and the NAFTA area.

A trade war will make losers of all involved. What country A gains on domestic production by pricing out imports it loses on exports to Country B who retaliates, and loses out from the higher price level in its own country squeezing real incomes. With a steel tariff on imports into the US, for every steel job at home that helps, several steel using jobs at home are weakened.

At this juncture the UK stands close to the point where it is an independent country again capable of pursuing its own free trade policy globally through its membership of the WTO and its worldwide network of diplomatic and business contacts. This is a good time to make the case for freer world trade and to lead negotiations at the WTO to put new life into removing tariffs and other barriers. They are still universally high on agriculture, and a wider issue with many emerging market countries that retain high levels of protection in ways that are unhelpful to themselves.

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167 Comments

  1. Nig l
    Posted March 7, 2018 at 6:02 am | Permalink

    Yes indeed but it needs strong leadership with vision. The problem is that I cannot see who is to provide it.

    • Posted March 7, 2018 at 5:04 pm | Permalink

      Legatum. this comes straight off their website.

    • Peter
      Posted March 7, 2018 at 5:45 pm | Permalink

      Well the EU have just said ‘No’ to May’s aspirations. So it is decision time.

      Walk away or some very clever weasel words to try to disguise a climb down.

      If she does cave in then it is definitely time for Brexiteers to unseat her.

      That said I am not sure the traditional parties are fit for purpose any more. They are all compromised.

      What the American paleoconservatives have said now rings true more than ever-

      “What paleoconservatism tries to tell Americans is that the dominant forces in their society are no longer committed to conserving the traditions, institutions, and values that created and formed it, and, therefore, that [B] those who are really conservative in any serious sense and wish to live under those traditions, institutions, and values need to oppose the dominant forces and form new ones.”[/B]

  2. Richard1
    Posted March 7, 2018 at 6:11 am | Permalink

    What do you think of Patrick Minford’s proposal for a Unilateral Declaration of Free Trade?

    • Lifelogic
      Posted March 7, 2018 at 8:30 am | Permalink

      I have not seen it yet, but Patrick Minford is nearly always right and has been for many years. Unfortunately UK (and other governments) usually do the compete opposite. So we end up with absurdities like the ERM, the EURO, the absurd banking system, over taxation and endless government waste, over regulation and a weak economy.

      • lojolondon
        Posted March 7, 2018 at 1:36 pm | Permalink

        Also the situation where the last chancellor imposed punishing taxes on house purchases “in order to demonstrate that Brexit is bad for Britain” and the current Chancellor has not abolished those same taxes “in order to show just how bad Brexit is for Britain”.

      • Rien Huizer
        Posted March 7, 2018 at 3:59 pm | Permalink

        Why do you think Minford’s recommendations are good? Or “nearly always right”. His latest version is alittle more realistic than the first but it is still total nonsense from a political point of view. Looks nice at the computer screen but not in the streets.

      • graham1946
        Posted March 7, 2018 at 5:12 pm | Permalink

        You can see it on Youtube. I think it may be the one where Remainers tried to twist what he had to say to that he wanted to shut down British Industry.

    • Ian wragg
      Posted March 7, 2018 at 8:44 am | Permalink

      An absolute nonesense same as unilateral disarmament.
      We would lose most of our industry and farming as the world and its brother dumped their excess capacity on us.
      The EU would charge 10% on cars whilst theirs would be tariff free.

      • Richard1
        Posted March 7, 2018 at 3:52 pm | Permalink

        Well it’s worked pretty well for Singapore and Hong Kong. New Zealand also has largely pursued it. If French wine producers choose to ‘dump’ fine claret on the UK that’s fine with me.

      • Lifelogic
        Posted March 7, 2018 at 6:45 pm | Permalink

        Great if they “dump” as you put it under priced goods on us. Why refuse cheap steel and the likes take it and build some more houses perhaps. Think of it as overseas aid from them to the UK.

    • NickC
      Posted March 7, 2018 at 10:16 am | Permalink

      Richard1, I accept that your question is directed to JR. However my own view is that free trade is not really possible globally. Like democracy one demos is the prime requirement alongside no political rigging of the market. Neither of those is available internationally. We only need to consider the EU to see that.

    • acorn
      Posted March 7, 2018 at 10:21 am | Permalink

      It works for Singapore and Hong Kong but they are little Corporate States with no democratic content that is effective. They don’t have any domestic industry to protect from cheap labour, because they rent in all the cheap labour in the area and treat them as third class non-citizens.

      If the UK went tariff free, most of what’s left of UK industry would be wiped out. Also, the already large UK Current Account deficit would balloon; UK would depend on its fully floating currency devaluing somewhat to slow down the imports. Household disposable income would also need to be reduced by taxation or interest rates to reduce imported consumption.

      It’s a lot easier to apply tariffs on imports at the border. Those tariffs attempt to equalise labour costs to domestic levels on products that have a high foreign cheap labour content, food for instance.

      Trump is going back to the Republican Smoot-Hawley Act, which caused the Great Depression of the 1930s. He thinks protecting a couple of steel makers is not going to have a far far greater effect on US steel users in car plants etc. He did the same with imported Solar Panels tariffs. Not thinking that two thirds of the cost of a Solar installation was wages for the installers, many of whom are now out of work. Crazy!

      Protectionism rises when consumer demand drops; prices are falling and there is little inflation anywhere. Consumer demand is dropping because the workers’ share of global income is dropping; thanks to the neo-liberal gig economy.

      • Stephen Berry
        Posted March 8, 2018 at 2:12 pm | Permalink

        The main thrust of the arguments by people against a unilateral declaration of free trade by the UK seems to be twofold. It would decimate UK manufacturing and it would result in the balance of payments ballooning out of control. Let’s take these arguments in turn.

        As a matter of fact, I do not believe that UK manufacturing exists behind large tariff barriers, so I would expect little change there. High tariff barriers are imposed on importing agricultural goods however, so we would see a contraction of the already small UK agricultural sector. But consumers would see much cheaper prices for many basic essentials in the shops. For example, average EU tariff rates for wheat and barley are almost 20 per cent, sugar and sweets are at 20 per cent and clothing tariffs are around 10 per cent. These are all basic goods where our poorest citizens would derive considerable benefit.

        The UK balance of payments has been a ‘problem’ since at least the 1960s and not even massively increased wealth since then seems to be able to make it go away. The basic point to remember is that people in other countries are only going to sell us goods as long as they can either buy stuff from us or invest successfully in the UK. If, as some people seem to think, free trade would destroy UK production then people would not sell us stuff as we would have nothing to sell. Ergo there would be no balance of payment problem! But that would not happen as the many examples of countries (not just Hong Kong and Singapore) who have successfully adopted free trade can testify.

    • Robert Betteridge
      Posted March 7, 2018 at 11:43 am | Permalink

      I agree, in part.
      There appears to be a flaw in JR’s Free Trade Argument (first paragraph) – that if one side offers Freedom it saves on tariffs on imports. This ignores the fact that the duty goes into General Taxation Fund (apart from the UK – where it goes to Brussels).
      If the level of taxation is a given then a drop in tariff receipts has to be made up from somewhere else – it is a Zero sum game.
      What you have done is encouraged buying abroad which harms your Balance of Payments.
      However the longer term effect of tariffs (and the protection of ones own industries, e.g. UK car in the ’60s) being the drop of ones own competitiveness – assuming static product development.
      So, ideally, you would zero rate materials but charge for transient (consumer) products, unless they were a contributor to growth.

    • Stephen Berry
      Posted March 7, 2018 at 12:27 pm | Permalink

      Richard, I think it’s an excellent idea. If we are looking purely at our economic relationship with the states that comprise the EU then it would be best to end all cooperation with Brussels – including sending them money. There would be no negotiations over trade. Free trade should simply be allowed by the UK, even if the EU were foolish enough to restrict it on their side. But then, as the EU imposed tariffs, ministers who were confident in their knowledge of economics would have to explain this to a questioning public. Would the present government be able to do this?

      It is hugely amusing that the EU has come out strongly against the proposed Trump tariffs on steel and aluminium. Instead of proposing new tariffs on Levis, why does the EU not set an anti-tariff example by reducing or abolishing its many tariffs on goods from outside the EU? Equally amusing is the fact that many of the critics of the Trump tariffs are precisely the same people who would want us to stay inside the EU Customs Union and therefore continue to impose EU tariffs. One of my main reasons for voting for Brexit was to reduce tariffs and make life easier for British consumers.

    • David Price
      Posted March 7, 2018 at 2:33 pm | Permalink

      My preference is for fair trade, unilateral free trade is too expensive.

  3. duncan
    Posted March 7, 2018 at 6:17 am | Permalink

    ‘At this juncture the UK stands close to the point where it is an independent country again capable of pursuing its own free trade policy globally through its membership of the WTO and its worldwide network of diplomatic and business contacts’

    I enjoy your blog John but I believe this is little more than rhetoric.

    You know as well as I do and indeed most other people who follow politics that the UK is on the verge of being betrayed by your leader, conspiring with the EU though giving the impression of being in conflict, and by this PM.

    We all watch events and we are dealt a diet of lies, tosh and nonsense

    We have a virtue signalling, liberal left stooge who has unofficially declared this POTUS persona non grata. How pathetic is that? This nauseating pandering to the BBC and all the other leftist media groups isn’t leadership but capitulation

    How is the UK going to sign off on a FTA with the US when this PM expressed openly her distaste for its leader?

    Tory voters do not want this leader. We do not want this PM

    We are tired of the lies and tosh pumped out by this left leaning government, this PM and the one vile organisation this government will not reform, the BBC

    And the EU carping on about free trade is beyond belief. I haven’t the energy to even address this hypocrisy

    • Posted March 7, 2018 at 7:28 am | Permalink

      Well said,duncan. That is our situation.

      • Know-Dice
        Posted March 7, 2018 at 9:04 am | Permalink

        And from me 🙂

        Trump IS the American President elected BY the American people, so regardless of what one thinks of him we NEED to do business with him…

        • David Price
          Posted March 7, 2018 at 2:45 pm | Permalink

          well said, he represents the American people and their interest … just as our government is supposed to do.

        • Narrow Shoulders
          Posted March 7, 2018 at 8:06 pm | Permalink

          And Putin?

    • Timaction
      Posted March 7, 2018 at 8:56 am | Permalink

      Indeed. USA customs tariff on cars 2.5%. EU customs tariff on cars 10%. I support fair free trade. Trump is right. This is neither fair nor free. Why shouldn’t he challenge the bloated EU bureaucrats when they place themselves at such an unfair advantage.
      Once again your leader has placed herself on the wrong side, like Mr Hammond did with his letter to POTUS. At a time of so called negotiations this is not the time to be doing this unless.
      I noted with interest that none of our msm reported the progress yesterday in North Korea and its thawing relations with theSouth and claimed intentions on disarmament. Fake news by omission becoming common!

    • A.Sedgwick
      Posted March 7, 2018 at 9:12 am | Permalink

      Agreed, many analogies could be applied to a still committed Remainer in charge of our exit. Brexit probably means Brino. The EU will collapse eventually, the cracks are clearly evident to more people across Europe. President Trump is right to highlight the unfairn Germany/China trade surpluses, they are more of a threat to the world economy than tariffs. On this issue I didn’t realise that the tariffs we have to pay on non EU imports goes into EU coffers, makes the £350b look very understated.

      • Know-Dice
        Posted March 7, 2018 at 1:17 pm | Permalink

        I believe “only” 80% goes to the EU, the suggestion is that may be VAT or some of VAT goes to the EU, but I’m not sure about that…

      • Denis Cooper
        Posted March 7, 2018 at 1:51 pm | Permalink

        It used to be that 75% of the customs duties collected by the UK went to the EU, but that was changed to 80% by a 2014 Decision:

        http://eur-lex.europa.eu/legal-content/EN/TXT/?qid=1485417562775&uri=CELEX:32014D0335

        “COUNCIL DECISION of 26 May 2014 on the system of own resources of the European Union”

        “5) The European Council of 7 and 8 February 2013 concluded that the system for collection of traditional own resources is to remain unchanged. However, from 1 January 2014, Member States are to retain, by way of collection costs, 20 % of the amounts collected by them.”

        Article 2(3):

        “Member States shall retain, by way of collection costs, 20 % of the amounts referred to in point (a) of paragraph 1.”

        This is also of interest:

        https://ec.europa.eu/taxation_customs/facts-figures/customs-duties-mean-revenue_en

        “Customs duties mean revenue”

        In 2016, €25 billion customs duties collected on total imports into the EU of €1707 billion, €20 billion transferred to EU budget = 80%.

        That works out as an average import duty of just 1.46%, but as mentioned yesterday:

        http://johnredwoodsdiary.com/2018/03/06/complex-supply-chains-and-industrial-integration/#comments

        “… presumably that includes imports under various EU trade deals which may not be what we will end up having … “

        • alan jutson
          Posted March 8, 2018 at 2:00 pm | Permalink

          Dennis

          Few people are aware that the EU collects a huge percentage of other taxes from the UK.

          Thus our often stated annual payments, used in most discussions, are only part of the amount we send across to the EU.

          Would be nice to know what the actual total is each year we send to the EU

          Is this combined total recorded in official Government figures anywhere John or is it kept separate deliberately ?

    • fedupsoutherner
      Posted March 7, 2018 at 9:12 am | Permalink

      Hear, hear Duncan. This must be the most disappointing Tory government of my lifetime.. I just wish somebody would take her to task but nobody seems to have the gumption or sense to do so. We are like a runaway train with no driver and no alternative and this is what Mrs May is relying on.

    • Bob
      Posted March 7, 2018 at 9:13 am | Permalink

      Hear hear Duncan.

    • Paul Ralph
      Posted March 7, 2018 at 10:59 am | Permalink

      Well said, and in particular I am looking for someone who will tell me how the BBC can be dismantled and re-built as a polite, respectful and open-minded news organisation, focussed on reporting rather than forcing its own views and value judgements down people’s throats and thereby subverting and polluting our whole culture. It is indeed a ( unpleasant ed)organisation, as we have finally realised with the arrival of the Brexit debate. As you say, rhetoric is one thing, but action is another – what can be done in practical terms? Who is lobbying for a proper review of the BBC ?(to be followed by sanctions).

    • Denis Cooper
      Posted March 7, 2018 at 11:59 am | Permalink

      Notwithstanding your partially valid criticisms of Theresa May it’s not clear to me who you would have as alternative Prime Minister at this present juncture.

      • Hope
        Posted March 7, 2018 at 12:45 pm | Permalink

        Leadsom, with a majority of Leave cabinet? Quite frankly I cannot think of a worse PM with one of the most appalling records as May to get the job of PM.

        Today we read the German coalition agreement has it endorsed that a transaction tax must be applied to financial services. Tusk claims financial services not included in any trade deal with the U.K.

        We also had Davis dancing around the edges when questioned by Houey about fishing waters and rights post Brexit. While he was able to confirm control of waters he was not able to confirm control of fishing quotas! He claimed part of the negotiation! It strikes me these two points alone are good reasons not to have a trade deal with the EU and walk away now. Why be a vassal state during May’s extension and for what benefit? Why should ECJ apply? Why should the U.K. Give £100 billion in alleged commitments to talk about trade- we demand the right to see the bill before our money is used. Why should mass immigration from EU and all welfare benefits to EU citizens continue after Brexit. May is good at giving away others peoples money like all socialists! Why does all business have to complex with EU regulation for an indefinite time rather than the small amount of businesses that trade with the EU?

        Why does she keep siding against the US?

        JR may is utterly clueless as she is useless. A socialist wanting to promote cultural Marxism.

        • Denis Cooper
          Posted March 8, 2018 at 10:31 am | Permalink

          Andrea Leadsom does not have a long history as an outright Leaver, in fact she spent a long time on her Fresh Start project to try to keep us in a reformed EU.

          She herself said that she had been on a journey:

          https://en.wikipedia.org/wiki/Andrea_Leadsom#European_Union

          Obviously she was much further advanced on that journey than Theresa May, who even now is only taking us out of the EU from a sense of duty and who seems to be susceptible to bad advice from pro-EU civil servants and other advisers who do not share her sense of duty. However I think that on the whole Theresa May is the more capable and resilient politician.

          • Hope
            Posted March 8, 2018 at 4:40 pm | Permalink

            Tories centrally choose their candidates. You will see from Cameron’s cabinet, Hammond, May, Soubry, Clarke, Osborne, Grieve, Morgan, that it was loaded with extreme EU fanatics, while he falsely claimed to be Eurosceptic. I am surprised any new Tory MP is eurosceptic as they were and are being weaned out by. The top and centre office. Therefore I have sympathy with any True eurosceptic wanting to get in cabinet to change the status quo and having not show their true identity. Your point is not as black and white as you imply. May is certainly not capable, utterly useless, u derhand and untrustworthy springs to mind, based on her record and performance it is difficult to grasp how you made this comment. As you pointed out she had you fooled over her true position.

          • Denis Cooper
            Posted March 8, 2018 at 5:12 pm | Permalink

            She’s certainly not brilliant, just moderately capable, but she is probably the best available at present for the reason you cite – that is to say, the way that the Tory party has been selecting its parliamentary candidates for the past half century.

    • Posted March 7, 2018 at 12:40 pm | Permalink

      Sadly, Duncan, this is what most right-thinking people feel. Especially your point about POTUS. It is disgraceful to attempt to insult him on behalf of the British people, when most of us are simply glad that he is pro-GB. He is THEIR choice and we have no right to denigrate that.

    • Lifelogic
      Posted March 7, 2018 at 7:05 pm | Permalink

      Indeed Tory voters surely want a leader who is actually a real Conservative. one who appoints an economocally competent chancellor, leaves the EU cleanly, cuts taxes and regulations and cuts the size of the largely parasitic state sector. Also one who can inspire and win a decent majority at elections. One who believes in personal choice and freedom and cheap on demand enegry.

      May is none of this.

  4. Newmania
    Posted March 7, 2018 at 6:21 am | Permalink

    Funny that , it seems like only yesterday you were telling us what a good idea protecting our industries was , import substitution you called it
    It’s almost as if you say any old thing , but I would like tom congratulate you , finding a way to blame Germany and the EU for your co Nativist , Trump, that takes some doing .
    As for us , we are about 3% of Global GDP , the US about 25% China 18% and the 27, 20% ish.
    We do not have a voice and if you seriously think the WTO can do anything about it if either the US or the EU decide to ignore it then…. well no one is that stupid are they ?

    • Roy Grainger
      Posted March 7, 2018 at 6:58 am | Permalink

      John didn’t blame Germany and the EU for Trump. Straw man arguments like that don’t advance your cause at all.

    • duncan
      Posted March 7, 2018 at 6:59 am | Permalink

      Import substitution and import tariffs are two completely different issues. The former is nothing more than domestic suppliers producing goods to compete with goods imported from non-domestic suppliers. It is a free-market response to imported goods

      Import tariffs, on the other hand, are taxes and penalties imposed by a government on imported goods. These taxes are a protectionist measure designed to make imports more expensive relative to domestic production with the intended aim of protecting domestic industries.

      Keep reading around the issues and you may learn something

      Reply Well said. Silly criticism made. Each country needs to be good at some things and needs to compete in its own market!

      • Anonymous
        Posted March 7, 2018 at 9:26 am | Permalink

        Reply to reply:

        “Each country needs to be good at some things and needs to compete in its own market!”

        The UK has long subsidised outsourcing with welfare – softening the impact of factory closures. Part of Brexit must be an end to this.

      • Newmania
        Posted March 7, 2018 at 11:40 am | Permalink

        Yes your “reading around the subject” has not got as far as the actual Redwood Posts. They told us that customs barriers would be a super thing as we would be able to substitute domestic supply as well as collecting loads of cash. This is an argument for the benefits of protectionism. End of

        Reply Said no such thing, but pointed to consequence of tariffs if the EU want to impose them. Overall tariffs are a bad idea, but worse for the exporters than the domestic industries.

        • Denis Cooper
          Posted March 7, 2018 at 12:03 pm | Permalink

          OK, Newmania, produce one post which supports what you say.

        • Richard1
          Posted March 7, 2018 at 3:58 pm | Permalink

          I have read JRs posts fairly carefully since the financial crisis, he has never said any such thing, you have made it up. I find it heartening when continuity remain types resort to this, it means there can’t actually be good arguments against brexit and the Country might have made the right decision. Before the referendum I thought the question was finely balanced.

      • acorn
        Posted March 7, 2018 at 1:47 pm | Permalink

        No they are not entirely different issues. Import substitution takes time to develop. Developing countries use an import tariff to protect “infant” sectors of their economies while they catch up.

        Countries that purport to be the voice of free trade, don’t practice import substitution.

        • Denis Cooper
          Posted March 8, 2018 at 10:41 am | Permalink

          Nonsense. If the EU chooses to deliberately hinder our exports to them then we have the option of hindering their much larger exports to us, freeing up some share of our domestic market for home producers to provide substitutes for the reduced imports. Our government has said again and again that despite our chronic massive trade deficit with the rest of the EU it does not want to recreate any unnecessary obstacles to that trade, it is your chums in the EU who are threatening us with that for political reasons.

          • acorn
            Posted March 11, 2018 at 5:22 pm | Permalink

            As always Denis, you are neglecting the reaction of 26 million UK households. They may not want domestic produced substitutes; they want the real thing to park in the street, for the neighbours to admire.

            Woe betide the political party who tries to stop UK households’ aspirations at street level.

      • Lifelogic
        Posted March 7, 2018 at 7:11 pm | Permalink

        In times of war countries blockade their enemies ports to prevent them getting supplies. Yet in times of peace we blockade our own port with high import tariffs!

    • Anonymous
      Posted March 7, 2018 at 9:30 am | Permalink

      @ Newmania’s “finding a way to blame Germany and the EU for your co Nativist”

      The courts, government and civil service always blamed EU law claiming that they restricted in their abilities to deliver what the majority wanted.

      Of course, this tainted public opinion of the EU when it was the UK’s cultural Marxists who were to blame all along.

    • graham1946
      Posted March 7, 2018 at 10:15 am | Permalink

      And our influence of one vote in the EU was what? Zilch. Outvoted every time we put our interests first. About time you supported your own country Newmania. Why exactly do you want to be part of a Superstate with even less influence that we have? I have never seen a Remainer put a positive point by point case, just negative, usually insulting comments. Perhaps you will be the one to enlighten us all?

    • NickC
      Posted March 7, 2018 at 10:26 am | Permalink

      Newmania, The EU, or more accurately the EZ Euro, is to blame for German mercantilism.

    • Libertarian
      Posted March 8, 2018 at 7:35 pm | Permalink

      Newmania

      Er the UK is 3.8% of global GDP and Germany is 4% . The EU ( 28) is 17% and falling

  5. Mark B
    Posted March 7, 2018 at 6:30 am | Permalink

    Good morning.

    Germany has undoubtedly benefited from the Euro. Which is fair enough but, it has acquired a mass of wealth and does not wish to share some of it with those in the currency union. The US and the UK are also in a currency union and have to share. This gives the likes of Germany an unfair advantage.Germany also benefits from being allowed to burn dirty coal where as the UK is forced to shut down its cheap power generating plants, giving Germany an unfair advantage. France benefits, as do others in the EU, by getting funds for farming and infrastructure projects. All paid for by Germany and the UK. That too is unfair as they effectively get a subsidised tax rate and interest rate as they do not have to borrow the money.

    Leaving the EU is going to force some to look long and hard at how this project is funded. Some are going to have to pay a little more while, others are going to have to accept a little less.

    But the EU represents a form of subsidy that the US does not enjoy.

    A trade war will make losers of all involved.

    True. But I think it will make people sit up and listen. President Trump is all for a bit of creative destruction. He is a businessman first and a politician last. His bullish stance is going to upset a lot of people but, in the end, they are going to have to deal with this man and he will get what he wants.

    Good or bad. Like him or loathe him. He is a far better ‘leader’ (a term a hate but . . ) than our PM.

    • duncan
      Posted March 7, 2018 at 7:12 am | Permalink

      Good post.

    • Peter Wood
      Posted March 7, 2018 at 8:20 am | Permalink

      Germany’s unfair benefit from the EU – just so and easily remedied. Those who benefit the most should pay the most. Therefore those who have a trade surplus with the EU pay into the EU (the larger surplus the more paid), those that have a deficit receive from the EU. Do you think that’d work….
      BTW, this plan would of course make Germany by far the largest net contributor, so its reasonable that they’d want the whip hand on any/all EU decisions…. oh wait a minute, they already do!

      • Ed Mahony
        Posted March 7, 2018 at 9:19 am | Permalink

        Good point.

        But crashing out of the EU like we’re doing isn’t the way to respond.

        The way to respond is:

        1) Plan properly to leave the EU. This could take years. But at least we’d be able to eventually make a clean break without wrecking our country whilst trying to get out.
        2) Try and reform the EU (challenging, i know). But whilst preparing to leave the EU, we could try reforming it as well. So that we (and Europe) has the best of both worlds – strong European economy able to trade well with rest of world.

        Reply Neither of your options makes any sense, and neither will be pursued. We voted to leave now, not in many years time. The EU rejected most of the UK’s very mild reform ideas before we decided to leave. There is no damage from early departure- there are many opportunities for gains.

        • Posted March 7, 2018 at 1:09 pm | Permalink

          Thank you, Dr Redwood, for replying on behalf of all right-thinking people here, saying exactly what we would wish.

        • Know-Dice
          Posted March 7, 2018 at 1:20 pm | Permalink

          Have you given up on “Geo Politics” Ed?

          I thought you promised not to post around Christmas time, what happened to that or did I imagine it?

          • Ed Mahony
            Posted March 7, 2018 at 10:11 pm | Permalink

            Sorry, you’re right. I’ll let you have the last word!

        • David Price
          Posted March 7, 2018 at 2:55 pm | Permalink

          You are right that our government approach is not appropriate, they are not trying to leave.

          I would advocate immediately positioning for no trade deal with the EU and reciprocate any restrictive practices, adopting a tax and corporate approach to encourage business to be here rather than Brussels, Dublin etc, out-compete the EU and maybe even explore the notion of an alternative trading block with some the Northern countries outside of EU entanglements.

          The aim should be to become the EU’s worst nightmare

        • Denis Cooper
          Posted March 7, 2018 at 4:45 pm | Permalink

          We’re not “crashing out”, so far we’re playing it absolutely straight by following the procedure laid down in the EU treaties. Just a pity that the EU has chosen to adopt the most destructive interpretation of that procedure and our government has been too weak to protest and point
          out the stupidity of the EU’s approach.

          • Ed Mahony
            Posted March 8, 2018 at 9:42 am | Permalink

            @Denis,

            ‘so far we’re playing it absolutely straight by following the procedure laid down in the EU treaties’

            – Sorry, but that’s a legalistic argument that doesn’t wash with me. You’ve got to be pragmatic in your approach as well.

          • Denis Cooper
            Posted March 8, 2018 at 5:15 pm | Permalink

            We are being honourable in our approach, and “courteous” as well as David Davis calls it. Too courteous, in my view.

        • Original Richard
          Posted March 7, 2018 at 6:28 pm | Permalink

          Mr. Mahoney,

          In a recent post you first stated your belief that we should stay in the EU “in order to take time to reform it” to which I asked you if you could explain how this can be done and how it will benefit our country to have in the meantime 27 other countries (soon to be 34) together with unelected bureaucrats (failed politicians in many cases) deciding upon our laws, money, taxation, borders, agriculture, fishing, trade, energy and foreign policies and a German Chancellor unilaterally deciding our immigration policy.

          I still await your reply.

          • Ed Mahony
            Posted March 7, 2018 at 11:24 pm | Permalink

            First, i’d focus on preparing for leaving the EU (could take years).

            Don’t know answer to your question. I’d have to do loads of research + thinking. But to try and answer, would try:

            1) For those of a religious bent: service in Parliament for God’s wisdom and blessing on this. Lots of prayer in general. And campaigns in C of E, Catholic Churches and others to pray for those trying to reform the EU.

            2) Something bold and creative to break the ice such as one day event in London to discuss possible reform.

            Inviting the following sort of people:

            – Brexiters: for example, John Redwood, Lord Howard, Jacob Rees-Mogg, Michael Portillo, Sir Digby Jones

            – Remainers: for example, Ken Clarke, Lord Heseltine, Tony Blair, John Major, Lord Adonis,

            – Neutrals (sort of): for example, Lord Hague, David Willets,

            – Business leaders, civil servants and others (Remainers): Sir Martin Sorrell, Tom Enders (Airbus), Bill Gates, Sir Miachel Rake (BT), Jamie Dimon (JP Morgan)

            – Business leaders, civil servants and others (Leavers): James Dyson, Bamford (JCB), Simon Wolfson (Next), Sir Rocco Forte, Peter Goldstein (Superdrug),

            – Europeans: Prominent Europeans – both politicians and business leaders – interested in reform.

            And get someone neutral to chair. Someone such as Lou Gerstner (ex of IBM), George Mitchell, James Comey.

            3) Followed up by something a bit more ambitious (but not asking so many to attend). Something like ask Richard Brason to lend Necker Island to discuss in greater detail and build relationships.

            And overall, reminding people that important as Leave / Remain is to our country, our country has many more concerns that need dealing now. But somehow we need to sort out the problem of Europe for the long-term.

            Reminding people that great things are possible. In politics (look at Churchill). And business. BUT that people must proceed with proper strategy. And be bold and creative in thinking. We must pay off our debt. And everyone (Leavers and Remainers) must eat a bit of ‘umble pie for the good of country).

            Start off something bold and creative by inviting group to somewhere such as Richard Branson’s island for a few days. People such as (rough idea)

            Brexiters: John Redwood, Lord Howard, Michael Portillo

            Remainers: Ken Clarke, Lord Heseltine, Tony Blair, John Major

            Business leaders: such as: Sir Martin Sorrell, Sir James Dyson, Lou Gerstener, George Soros,
            Europeans: Prominent Europeans – both politicians and business leaders – interested in reform

      • ian wragg
        Posted March 7, 2018 at 11:29 am | Permalink

        If Trump slaps reciprocal tariffs on German cars and white goods, the surplus with the USA could evaporate overnight.
        We of course have a massive deficit with the EU so by your standards should be net recipients of EU funds or have a bigger say, we have neither.

        • Peter Wood
          Posted March 7, 2018 at 12:44 pm | Permalink

          This was suggested in jest, I thought that was the vein of the post today; surely everyone could see that our host was mimicking the PM in a most critical manner….

        • getahead
          Posted March 7, 2018 at 7:49 pm | Permalink

          Exactly Ian. The EU has ripped us off for years.

    • Sir Joe Soap
      Posted March 7, 2018 at 8:27 am | Permalink

      Absolutely
      Our host, along with his politician friends, takes Trump too literally.
      Trump has a business mindset. He knows that by shaking the trade imbalance box something will fall out of it for him and the US.
      Madame Theresa meantime has the polar opposite mindset that thinks trying to be nice to everyone gets results.

    • Ed Mahony
      Posted March 7, 2018 at 9:10 am | Permalink

      ‘creative destruction’

      – ‘creative destruction’ is what you see, to a degree, and most typically, in the financial / property investment sector more than anywhere else. It’s a cynical way of doing business. Nothing noble about it whatsoever. Life is too short for this type of carry-on. And it just makes one miserable (I’d, frankly, rather be poor, enjoying my family and friends and travel and the arts etc).

      Normal, decent business practice is about straight, honest work – building up one’s business / company / brand through careful research, planning and strategy, creativity, patience and perseverance, win-win partnerships and long-term investment. This pays off greater dividends in the end, looking at things overall, in terms of growth, stability and job satisfaction.

      And the second approach to business is what a country needs in a leader where growth, stability and job satisfaction is reflected in the country’s economy overall.

      • Ed Mahony
        Posted March 7, 2018 at 9:24 am | Permalink

        I don’t mean to be harsh. But people who dabble in ‘creative destruction’ are dabbling with something that is destructive to themselves, ultimately, and their families and life in general, as well as all those they harm in business.

        I just find it hard that you or anyone would want to defend ‘creative destruction’ in anyway. It’s perhaps even worse than Boris Johnson saying that ‘greed is good.’ We’re all involved in greed from one degree to another. I am at least. But i don’t think it’s good. I’m not proud of it. And I’m certainly not trying to promote it. If trying to promote anything, i’d try and promote hard work / diligence / work ethic etc ..

        Regards

        • Denis Cooper
          Posted March 7, 2018 at 5:00 pm | Permalink

          Your precious EU views the destruction of the national sovereignty of its member states as a form of creative destruction.

          https://en.wikiquote.org/wiki/Arnold_J._Toynbee

          “The local national state, invested with the attributes of sovereignty — is an abomination of desolation standing in the place where it ought not. It has stood in that place now — demanding and receiving human sacrifices from its poor deluded votaries — for four or five centuries.”

          That’s the kind of people you’ve chosen as allies, people who view their own country as an abomination.

          • Ed Mahony
            Posted March 8, 2018 at 9:40 am | Permalink

            @Denis,

            My main argument has been to reform the EU (so it is an economic union not a political one). But that if we do leave the EU, then we have to prepare for it properly.

            By not preparing for leaving the EU properly, you could damage our country for years to come. Real destruction. Creative or otherwise.

            By reforming the EU, we get the best of both worlds. Freedom to be our own country. Whilst having good healthy economic (and cultural and security) relations with our nearest neighbours in Europe.

          • Denis Cooper
            Posted March 8, 2018 at 5:17 pm | Permalink

            You cling to this illusion of reform, Ed. But if there is to be any reform it will not be in a direction we would like.

        • Mark B
          Posted March 7, 2018 at 7:00 pm | Permalink

          Where in my post did I support creative destruction ?

          • Ed Mahony
            Posted March 8, 2018 at 10:37 am | Permalink

            Sorry, i thought you did. i take it back.

    • Rien Huizer
      Posted March 7, 2018 at 4:09 pm | Permalink

      Mark B,

      In wahat way are the US and UK in “currency union” I thought that GBP and USD were freely floating currencies. You comments need elaboration.

      • NickC
        Posted March 7, 2018 at 11:02 pm | Permalink

        Rien, You have misunderstood (and not for the first time). Mark B meant that the USA and the UK were each a currency union.

      • David Price
        Posted March 8, 2018 at 6:15 am | Permalink

        Mark B didn’t say “in currency union”. The USA is a currency union and the UK is a currency union, they are both in a currency union but not the same one.

        This is obvious to someone who knows the situation and in any case the potential, temporary mis-reading does not detract from the main points of his comment which I happen to agree with.

        Yet you seek only to employ grammatical pedantry rather than address the points expressed so I infer you disagree with them but can’t be bothered to offer a rebuttal.

        BTW – What does “wahat” mean?

        • Rien Huizer
          Posted March 10, 2018 at 8:47 am | Permalink

          David Price

          Wahat is an ancient word that I use occasionally. Very hard to translate but the word “what” comes close. Currency unions are arrangements (some unilateral, usually multilateral) whereby multiple states use one currency. The US and UK are each one state using their own currency, hence not currency unions. I guiess that Rugby fanatica may think that several “nations” use the GBP but that does not make the UK a currency union.

          • David Price
            Posted March 12, 2018 at 6:38 am | Permalink

            US established a currency union in 1863 during the civil war.

            Scottish pound dropped for British Sterling after union of 1707 and the Irish Pound dropped around 1826.

            Stuff did happen before the EU.

  6. Peter
    Posted March 7, 2018 at 7:08 am | Permalink

    Brexit yes. Take back control.

    Free Trade? Only when it suits Britain.

    The US Paleocon approach has more appeal.

    Free Trade did not work out well for 19th century Britain. It lost out to Germany and the USA.

    We need to protect manufacturing jobs in Britain. A country needs certain industries to be self sufficient and independent, as Trump pointed out with steel production.

    We should match tariffs from China with similar tariffs of our own. Where necessary we should disrupt unwanted imports, by fair means or foul. Tie up unwanted imports with paperwork, delays and undeliverable requirements.

    We don’t want globalism either. That only suits elites. We want economic nationalism.

    Good riddance to Gary Cohen of Goldman Sachs from the Trump administration. He would not ‘Make America Great Again’. He was there to look after the interests of elites.

    • Sir Joe Soap
      Posted March 7, 2018 at 8:31 am | Permalink

      I think a large part of doing our own trade deals is about protecting our own interests but equally negotiating free trade where we do make more by having competitively priced supplies.

  7. Endo
    Posted March 7, 2018 at 7:21 am | Permalink

    Global trade is dominated by the US, China and EU. No one cares what the UK says or does

    • Banania
      Posted March 7, 2018 at 10:48 am | Permalink

      “No one cares what the UK says or does.”
      Says the Guardian.

    • ian wragg
      Posted March 7, 2018 at 11:32 am | Permalink

      In that case why are so many making such a fuss about us leaving. You would think they would be well rid of us.
      Couldn’t be due to our insignificant 17% of EU GDP which of course will leave Brussels with a smaller cake after we go.

      • Mark B
        Posted March 7, 2018 at 7:03 pm | Permalink

        It is actually worse than that. We are a net contributor. This would leave the many mouths to feed with a little less. Not something they , their economies and people are going to like.

  8. Iain Gill
    Posted March 7, 2018 at 7:37 am | Permalink

    I don’t think this naïve approach to supposed free trade works John.
    For lots of reasons.
    Some places the border guards are routinely bribed as the only way to get goods through in a reasonable time, often supported by their state in practise. Why let things in from these countries tariff free?
    Some supposed “free trade” agreements are far from reciprocal, or demand work visas for one country in exchange for supposed access to markets in the others, so immigration and other things that the native population would never support if it was spelled out this is what is going on under the banner of supposed free trade.
    Then we have the expensive anti-pollution kit, expensive safety kit, all mandated in UK production, together with expensive power (reflecting expense of further anti-pollution measures) all loaded onto costs of production here. Where we are quite happy to import goods from countries operating without this anti-pollution kit, or latest safety gear, indeed many using child labour, many using software without bothering to pay licence fees and so on. So, no I don’t think our workers should be forced to compete on price with countries operating these more polluting, less safe, and so on practises. We should be using tariffs to level these playing fields, to encourage equalisation of pollution, safety, and other standards.
    What is the point of closing production here because it’s too expensive driven by expense of anti-pollution measures, only to import the goods from similar factories in other countries operating without that anti-pollution or safety gear? We have not improved net world pollution, we have not improved net world industrial accidents, all we have done is shifted it abroad, and manipulated our own economy so that it is only possible to work in narrow sectors where these things are less of an issue. Indeed that is why our economy is unbalanced with financial services so dominant, the political class have actively biased the economy to favour FS to the detriment of other sectors.
    So, no I don’t believe in your version of free trade. And if I was a US car worker seeing car factories being setup in Mexico to undercut them, simply by having less safety gear, less anti-pollution gear, less safe working practises, sure I would be cheesed off, wouldn’t you? And I agree with the US president trying to start changing the worst excesses, sure he may be doing it rather clumsily initially but something does need to be done.
    The cosy liberal elite consensus pushing for more supposed free trade is not working, and if the money to pay for your children’s school books depended on something being done you too would be pushing for something different.
    So, I think you need to move on from your simplistic analysis.

    • rick hamilton
      Posted March 7, 2018 at 9:11 am | Permalink

      Free trade is a matter of give and take but it’s no good if ‘we give and they take’.

      A few years ago there was an argument about Chinese shoe makers copying Italian designs and producing them at a fraction of the cost. Economists argued that it was all part of the general readjustment that had to take place globally and we would all be better off in the end, although there would be winners and losers, short term pain for some, rebalancing of priorities blah blah blah.

      So why should a family business in Italy which had built up its brand and reputation over decades go bust so that a few peasants in a totalitarian dictatorship could be lifted out of poverty? Theory and practice often do not
      coincide and Trump has rightly made an issue of it.

      • alan jutson
        Posted March 8, 2018 at 2:05 pm | Permalink

        rick

        agreed

    • Lifelogic
      Posted March 7, 2018 at 9:36 am | Permalink

      The simplistic analysis is essentially true. Obviously there is some corruption and many other complexities but this does not make the basic analysis wrong.

    • NickC
      Posted March 7, 2018 at 10:39 am | Permalink

      Iain Gill, Well explained. Whether it is political interference in the UK (often via the EU) which makes electricity too expensive to smelt aluminium here, or child/forced labour with no worker protection in Bangladesh/China/etc, there isn’t a level playing field. We need the lever of tariffs and the WTO to make competition fairer.

    • Adam
      Posted March 7, 2018 at 10:58 am | Permalink

      Consumers assess & choose products on their finished condition & price.

      You reveal stark contrasts, Iain, in the ways those conditions & low costs are reached.

      Client countries should not shrug their pollution, risk to health & safety, child labour, & other such responsibilities, onto others. Similarly, other countries should protect their own citizens’ well-being.

  9. Sakara Gold
    Posted March 7, 2018 at 8:05 am | Permalink

    What Mr Trump is talking about is protectionism, which as you describe above leads to savings on steel import costs but higher prices for goods manufactured from domestic steel (or aluminium etc).

    Mr Trump’s economic policy adviser Gary Cohn (the ex-president of a major US investment bank) apparently disagrees with this view and has resigned. Actually, it is refreshing to note that there are still principled politicians in the USA

    Protectionism is what happened during the Great Depression in the 1930’s. What has not happended yet is the stock market crash, the deflation and the wholesale loss of international trade, that was only stopped by the outbreak of fascism and the second world war.

    Seemingly, we live in troubled times. One hopes that history does not repeat

    • Lifelogic
      Posted March 7, 2018 at 9:30 am | Permalink

      Indeed protectionism is not helpful to either side, but I suspect that Trump does actually understand this and some deal will be done without too much damage.

      He is doing it mainly for political reasons, as he said he would when he was elected.

      There is good compilation video of Trump V Milton Friedman on Trade. The EU is a hugely protectionist organisation and this does huge damage.

      • Rien Huizer
        Posted March 10, 2018 at 11:44 am | Permalink

        More damage than US protectionism? If so, use explain and document. If not ,likewise. These are nonsensical arguments peddled by demagogues.

    • NickC
      Posted March 7, 2018 at 10:42 am | Permalink

      Sakara Gold, So an ex-banker is “principled” because he upholds the NWO?

    • sm
      Posted March 7, 2018 at 10:55 am | Permalink

      Sakara, Mr Cohn is not a politician, he is an investment banker and was President of Goldman Sachs. He is also a registered Democrat.

      Please don’t assume from this post, by the way, that I am a Trump supporter.

    • Mitchel
      Posted March 7, 2018 at 11:21 am | Permalink

      FD Roosevelt’s Madison Square Gardens speech whilst campaigning for re-election in 1936:

      “The forces of “organised money” are unanimous in their hate for me-and I welcome their hate.I should like to have it said of my first administration that in it the forces of selfishness and of lust for power met their match and I should like to have it said of my second administration that in it these forces have met their master.”

      Could have been Jeremy Corbyn speaking!

      • Prigger
        Posted March 8, 2018 at 7:45 pm | Permalink

        No Corbyn was only 15 years old in 1936

  10. hans christian ivers
    Posted March 7, 2018 at 8:10 am | Permalink

    John,

    This is a great idea but is it going to work whilst the rest of the World is building up more barriers as you point out yourself and as we ae still going to be independent but on our own on a much smaller scale?

    • NickC
      Posted March 7, 2018 at 10:44 am | Permalink

      Hans, The fetish of Remains like yourself for size overlooks the fact that as a small nation our needs are small too.

      • hans chr iversen
        Posted March 7, 2018 at 12:58 pm | Permalink

        Nick C

        grow up, it was a question not a conclusion

        • NickC
          Posted March 7, 2018 at 11:12 pm | Permalink

          Hans, Grow up. It was an answer to your question.

          • hans christian ivers
            Posted March 8, 2018 at 8:52 am | Permalink

            no it was you getting carried away with your categorization that does not apply, no more no less

          • NickC
            Posted March 8, 2018 at 2:48 pm | Permalink

            Hans, No, you categorise yourself.

  11. Lifelogi.
    Posted March 7, 2018 at 8:21 am | Permalink

    Indeed free trade (trade wars just do new damage), cheap energy, fewer regulations, lower tax and far smaller government a sensible clear & affordable legal system & peace is all that is needed. We only have peace currently.

    But May & Hammond are clearly not for these things at all (other than peace perhaps). Listening to May and Javid over housing the other day it is hard to believe they have a clue about how property development works or indeed how the productive private sector works at all.

    80% of people work for the productive sector and it is about time they actually found out. It certainly is not helped by her government idiotic government’s over the top taxation of absurd complexity, her enforced gender pay reporting, the idiotically organised apprenticeship scheme, the compulsory pension scheme, the contractor tax scheme, the up to 15% stamp duty, the attacks on the gig economy and self employment, the OTT building regulations, the absurd, expensive and restrictive planning system, the requirement for house buyer to subsidise others with social housing, the double taxation of interest for landlords (thus hitting tenants), Her ordering developers “to do their duty” and government with do this and that is just moronic. Governments can only do things using money they have taken of others (people or businesses who would nearly always have used it far better the government does).

    They are clearly completely ignorant as how business in the competitive sector actually works.

  12. jerry
    Posted March 7, 2018 at 8:23 am | Permalink

    But were does a “trade war” truly begin, the imposition of tariffs or the uncompetitive dumping of product into another country.

    The country who wins a tariff war is the one that imposes tariffs upon goods they do not need to import but then suffers retaliatory tariffs on goods they do not need to export, can anyone tell me what products those are in the case of the the USA?..

  13. Iain Gill
    Posted March 7, 2018 at 8:34 am | Permalink

    And remember there would be hardly any UK car production if it were not for real and threatened import quotas and tariffs on cars made in Japan. If you mean what you say expect UK car production to stop and many more cars to come in from Japan.

    • rick hamilton
      Posted March 8, 2018 at 1:14 am | Permalink

      Also remember that we impose a 10% import duty on cars from Japan, but there is no import duty on foreign cars going into Japan. Even so, imported cars only have 5% of the Japanese market and there are practically no foreign commercial vehicles at all. Why? Because Japan makes every conceivable kind of vehicle that 95% of buyers could possibly want, with excellent quality, price and service.

      If it’s a non-tariff barrier that people prefer to buy their own domestically made products because they are better than imports, isn’t that something we should promote in the UK?

      • Iain Gill
        Posted March 8, 2018 at 10:38 am | Permalink

        Not much immigration into Japan either

  14. alan jutson
    Posted March 7, 2018 at 8:43 am | Permalink

    Seems to me the WTO needs more teeth if it is going to be the standard bearer for so called free trade, but trade without subsidy, in order to control dumping.

    Shame that our Prime minister is taking the EU side on protectionism, when all Trump is doing is responding to what he sees as unfair competition, so is fighting fire with fire.

    You would have thought our leader would be trying to support the middle ground given so called free trade is what she says she wants for the UK !

    Afraid her recent statements speak volumes about her real thoughts.
    Seems she wants to support and play by EU rules after all.

    The truth is out at last !.
    Mrs May is no free trade marketer, which is a terrible shame, when trade is better than aid of any sort.

  15. agricola
    Posted March 7, 2018 at 8:45 am | Permalink

    Prior to your letter today I have been mulling ideas re the UK, the EU and the future. Notwithstanding Liam Fox dashing round the World assessing prospects for free trade deals after we leave the EU, I think I have one better. We have the Commonwealth, 53 states, all brought together by a shared history, a mostly shared language, and legal traditions. I float the idea of the Commonwealth becoming one big free trade area. We already have much in common, let wealth be a shared goal.

    Then we have the EU, democratically fragmenting by the minute, principally because it is a top down undemocratic entity. Until it enjoys the will of the people it will never work. How about a commonwealth of EU nations, all sovereign, all with their own currency controlling their own economies, and governments answerable via the ballot box. They could group together as a true free trade area, using the Euro solely as an international trading currency. An individual country could buy the Euros it needs for trade, just as individuals do when they holiday in the EU.

    I think the time is ripe for big ideas and not getting bogged down with nay sayers detail.

    • Denis Cooper
      Posted March 7, 2018 at 1:07 pm | Permalink

      I agree it would be better for humanity if the EU was converted into something more like the Commonwealth, but now is not the time to say that.

      I get fed up with Theresa May trying to cosy up to the EU, kissy-kissy huggy-huggy when a firm handshake at arm’s length is what is most appropriate, just as I got fed up with George Osborne urging them to get on and consolidate their federal eurozone to line up against us and eventually crush us. How that man has shown his true colours since the referendum … On the other hand, if we openly threaten their EU federal project in any way that could make them more defensive and even more stupidly destructive than they already are.

    • Mitchel
      Posted March 7, 2018 at 2:24 pm | Permalink

      I think you may be expecting too much from the Commonwealth;parts of it,particularly in Asia,are integrating into other structures like the Shanghai Co-operation Organisation.

  16. nigel
    Posted March 7, 2018 at 8:55 am | Permalink

    Trump’s threats are part of a negotiating tactic. Once he gets what he considers a fair deal, he will back off.
    Mrs May would have done well to have followed his tactics.

    • Mark B
      Posted March 7, 2018 at 7:17 pm | Permalink

      +100 times over

      🙂

  17. Bert Young
    Posted March 7, 2018 at 8:58 am | Permalink

    If one could only persuade the ” surplus ” countries to pool their reserves and make them available to those ” in debt “, it might go some way in solving trade wars . Over the past 70 – 80 years the USA has lost much of its manufacturing and labour employing activity to countries with low cost labour ; we are also in this category . The result has been the build up of huge reserves in some countries that now lie somewhat dormant . If there was such a ” pooling ” and it was put under the control of a reliable international body , it would solve many problems of the imbalances . Existing bodies such as the IMF would not have the credibility to monitor and oversee such reserves , too often they have shown major mistakes in forecasts and bias .

    I would be very interested in hearing from others whether such a scheme had credibility and would go some way in correcting the trade arrangements that exist today .

  18. fedupsoutherner
    Posted March 7, 2018 at 9:09 am | Permalink

    Ha,ha. What this this government? Something sensible? Wake me up when it happens.

  19. The Prangwizard
    Posted March 7, 2018 at 9:13 am | Permalink

    I am against sin too but the US tariff on imported cars 2.5% EU tariff 10%. So why the stink when the US president suggests that that needs correcting? Why is there not the same stink to get the EU to reduce its tariff? Anything to do with the fact they and our PM just does not like Mr Trump?

    The US has been on the whole a good ally to the world. Too much protectionism is not good but I know whose side I’m on. And as if to prove why the US is right to protect itself look at(how fair Asian competition is ed). Is the steel we import for our ships and the like up to standard?

  20. Prigger
    Posted March 7, 2018 at 9:18 am | Permalink

    Free trade is great if you’re swapping cabbages and carrots . A bad season in one country and you buy from the other. But with heavy industry it requires infrastructure and a stable skilled workforce. The US cannot simply buy cheap steel from abroad all the time and hope its steel workers will just stay unemployed and waiting for EU and Chinese steel shipments to mysteriously all sink at sea in a certain year. The US Rust Belt exists.

    • Denis Cooper
      Posted March 7, 2018 at 12:18 pm | Permalink

      As I understand the Chinese are exporting steel worker unemployment, production capacity being greatly in excess of present domestic demand.

      This would never have happened under Mao, when every village was to become a highly inefficient small scale producer of low grade steel …

      https://en.wikipedia.org/wiki/Backyard_furnace

  21. Eh?
    Posted March 7, 2018 at 9:25 am | Permalink

    A good point Trump made was that the US was importing cheap steel from countries where steel in not actually produced. He says the Chinese export officially 2% of the USA’s Steel needs but actually China is exporting very much more by re-export from third countries into the USA. He says he thinks they have been really smart doing that. But he’s cottoned on to it and will stop it.

    • David Price
      Posted March 7, 2018 at 5:16 pm | Permalink

      China did this with honey exports to the USA around 2013, aided and abetted by a German company – aka “honeygate”.

  22. Mockbeggar
    Posted March 7, 2018 at 9:39 am | Permalink

    I agree that Trump is in danger of leading the US into a trade war which is bad for all parties. I am of the opinion that Adam Smith was the greatest political economist of all time, but even he suggested that if one party takes advantage by distorting prices or exchange rates, retaliation is in order. It is quite clear that China has been flouting WTO rules and stealing intellectual property. Trump is trying to signal that he’s had enough of this unfair play. Retaliation is costly to one’s own side as well as the other, but so is war.

    Of course, Trump is threatening to use an axe rather than a scalpel, but his bark, on past evidence, worse than his bite. (I apologise for all the mixed metaphors by the way).

    • Prigger
      Posted March 7, 2018 at 3:35 pm | Permalink

      Yeah you should nip it in the bud, you are barking up the wrong tree. You need to dig down and get to the root of the problem and see the full landscape.

  23. alan jutson
    Posted March 7, 2018 at 9:45 am | Permalink

    Interesting letter from DWP this morning advising me of an increase in Benefits.

    Seems my State Pension is to increase fractionally, and that’s a so called Benefit.

    So after a working lifetime of paying into a State pension scheme, the reward is being told I am now listed as being on Benefits !

    Does that mean I should support Labour ?

    • fedupsoutherner
      Posted March 7, 2018 at 12:59 pm | Permalink

      @alan. Yes, the state pension is a minefield at the moment. I am debating whether or not to spend a good few thousands pounds on buying some extra contributions to make my pension up but the rules keep changing and at this rate I may find that before I have even had a chance to get my pension the rules will change again and I may get nothing due to the fact I have a private pension and am married to a man who also has a good private pension. All the time it is classed as a benefit it can be taken away.

      • graham1946
        Posted March 8, 2018 at 11:05 am | Permalink

        Be very careful. Many have done that and have not enhanced their pension and HMRC won’t refund the money either. It is another con to get more money for the government immediately and kick the can down the road.

        • alan jutson
          Posted March 8, 2018 at 1:50 pm | Permalink

          graham

          Not exactly a con, but I agree absolutely, you need to do a simple mathematical calculation before you pass over any hard earned cash.

          The problem is none of us know when we are going to pass on to the next World, if there is one.!

    • Peter
      Posted March 7, 2018 at 1:13 pm | Permalink

      Best not to mention pensions. You will only upset some of the Remainers.

      For them, it does not mean you should support Labour. It means “It’s all your fault!”

    • graham1946
      Posted March 7, 2018 at 5:28 pm | Permalink

      They always call pensions benefits. Benefits (not in-work benefits) are not taxable and I wrote to the DWP asking for all my taxes back. Answer came there none.

    • Narrow Shoulders
      Posted March 7, 2018 at 8:27 pm | Permalink

      Softening us all up for when the Work Place Pension replaces the State Pension for all but the destitute who need benefits.

  24. Rien Huizer
    Posted March 7, 2018 at 9:46 am | Permalink

    Mr Redwood,

    It appears that free trade within “blocs’ is the only way for the time being. And in fact most of the possible economies of scale are achievable within the North AMerican (NAFTA) and EU markets by themselves. To what extent that applies to the modern sector with IT, content, etc remains to be seen when (not if) the EU starts to regulate certain aspects of that sector.

    “Free trade” as an ideology has limited political appeal, in my opinion and the “zero sum” approach clearly visible in the current White House, after the latest departure even point into the direction of something far more damaging than magared trade as in trade agreements and blocs. This is sheer politics at foreign expense for a narrow domestic audience.

    • NickC
      Posted March 7, 2018 at 11:20 pm | Permalink

      rien, You mean like USA tariffs for importing cars at 2.5%, while the EU levies a tariff of 10%? That kind of sheer politics at foreign expense for a narrow domestic audience?

      • Rien Huizer
        Posted March 12, 2018 at 11:42 am | Permalink

        Yes. both trade blocs (NAFTA and EU) have peculiarities. Singling out one element to a al;rgely uninformed audience is domestic politics. Could be quite effective though. German firms are the largest exporters of cars in the US. BMW and More make more cars in the US than tey sell. Some models are imported, others are exported.

        Second, do you think a single steel mill will open because of these tariffs?

  25. Epikouros
    Posted March 7, 2018 at 10:02 am | Permalink

    The first truth about imposing a tariff on imported goods and services is it is nothing other than another tax levied on the consumer; the citizens and producers of the importing nation. The second truth is that it impoverishes that nation by lowering consumers standard of living and although it protects jobs in those sections of manufacturing/commerce for which the tariffs were introduced to do they do not completely. However far more jobs are lost in sectors who are not afforded such protection as consumer purchasing power is diminished and foreign and domestic investment drys up. Who would wish to invest in markets where demand is falling.

    Under normal circumstances there is nothing to be feared by offering free trade even if it is unilateral. That path only leads one way. To a higher standard of living for consumers. The UK tried it once in her history after the repeal of the corn laws and it worked well giving a considerable impetus to her economy. We bewail dumping into our country from countries who can offer goods cheaper than we can produce for ourselves. Either because they have low cost economies or they indulge in taxing their own citizens to enable them to subsidise the goods they sell us. We are no worse off as consumers in fact our purchasing power is enhanced. We are better off at the expense of those taxed citizens who subsidise their exports and have the social benefit of supporting low cost poorer counties in building a better more prosperous nation far better than our foreign aid ever does. In fact foreign aid should be abolished in favour of free trade with poorer nations.

    There is a case for bewailing some imports where they are not advantaged by price and quality but because of being manipulated into having to accept them though restrictive practices. This is happening on a grand scale because of our membership of the EU which dictates to us from where and from whom we are allowed to buy from and under what conditions. Brexit can at a stroke solve that highly disagreeable situation. Once we leave we can buy from and sell to anywhere under the terms and conditions that best suit us and that includes the EU(if the EU offers us conditions we do not like then we can source elsewhere. Their loss not ours).

  26. Original Richard
    Posted March 7, 2018 at 10:07 am | Permalink

    The current US/EU quarrel over trade is another clear reason why it will be better for the UK to be outside the unfair protective practices of the EU which has disproportionally benefited Germany’s car industry and France’s farmers.

    In addition it is perfectly obvious that it will be both easier and more beneficial for the UK to negotiate its own trade deals as a single entity outside the EU rather than as just one member of a bloc of 28 (soon to be 35) countries, all of whom have different interests.

    The EU realises this and hence it is fighting extremely hard for the UK to remain in their CU even to the extent of making it seem necessary to implement a hard border between NI and Ireland despite this being unnecessary.

  27. Adam
    Posted March 7, 2018 at 10:13 am | Permalink

    Freedom from the EU enables us to use our own values flexibly.

    Domestic values suit our own needs more accurately than being hard-baked into the average of what 27 neighbours want or tolerate.

    • Dennis Zoff
      Posted March 7, 2018 at 3:15 pm | Permalink

      Adam

      There must be two Adams on this blog…this one that speaks articulately, succinctly and to the point (which most agree with)…. and the other one that does not! Mildly strange?

  28. graham1946
    Posted March 7, 2018 at 10:24 am | Permalink

    Free trade, yes of course. But Fair Trade first. Zero Tariffs are not much use if the governments concerned agree to that but unfairly support their own industries, such as Agriculture in France and a cheap exchange rate in the case of Germany.

    How can it be correct for 10 percent tariffs in the EU against American vehicles and expect 2.5 percent against the EU in America?

    Trump is correct. The EU needs to be broken up as it is nothing more than a protectionist racket tradewise and a dictatorship politically.

  29. JasG
    Posted March 7, 2018 at 11:04 am | Permalink

    The trouble with your arguments is twofold;
    a) ‘most’ economists tend to be wrong about almost everything hence a sensible person would do the opposite of what ‘most’ economists recommend.,
    b) There is significant real evidence that the US and many other countries have benefiitted from protectionism in the past.

    The free trade argument always tends to be more ideological because the facts do not tend to support the argument that both sides benefit. Of course those who benefit are always in support but they tend to have a louder voice than those who suffer. We need less ideology-driven policy and more evidence-based policy. From the anecdotal evidence I have seen I think that Trump is right on this issue and he is in agreement with such diverse people as Bernie Sanders and Ross Perot. When I find an economist who predicted both the financial crash and the oil price slump then I’ll listen to him/her but the ‘consensus’ argument is very weak.

  30. JasG
    Posted March 7, 2018 at 11:36 am | Permalink

    “I’m a free trader – I believe in free trade, right? I like free trade. But free trade’s only good if you have smart representatives. It’s not good if we have dummies. It’s not good if our leaders are incompetent…”
    Donald Trump

  31. stred
    Posted March 7, 2018 at 12:20 pm | Permalink

    Facts4eu> today has the leaked , as usual, draft from the EU brought by our friend Guy Verhofstat. It requires the UK to keep all EU rules and tariffs etc during the so called transition period. This includes migration and rights. Mrs May and her civil servants, who are working with their matching numbers in Brussels, must have known about this when writing her speech.

    The choice is to stay in the EU for a ‘transition period’ until we decide not to leave or rejoin, paying as much as at present or more, or to leave as soon as possible and trade under WTO rules while substituting home manufactured products and world sources if barriers are put up ny the likes of Verhofstdt and political stooges such as Vardakar. May has apparently ruled out WTO as too complicated and is foot dragging on WTO preparations.

    You are being taken for a ride. Was it MPs that accused a cyclist, with asthma who won the Tour de France using a legal medication, of pushing the boundaries?

    • alan jutson
      Posted March 7, 2018 at 2:03 pm | Permalink

      stred

      Mrs May seems blind to tactics being used by the EU.

      The only solution now, is to walk away say we are going to trade on WTO terms and wait.

      If the EU then do not respond, we know where we are going, still have time to adjust, and will join all the other members (who actually include the EU)

      If the EU do respond, then we simply ask for better terms than WTO.

      This is what we should have done a year ago. !

    • Rien Huizer
      Posted March 7, 2018 at 4:23 pm | Permalink

      Stred,

      The EU’s point of view is simply: our terms or no deal. Since the PM prefers a “no deal” to a “bad deal” and she is still talking, the EU’s deal must be better than a “no deal”. Now, since the EU is apparently resigned to the “no deal” itself, it may well break off the negotiations if the UK continues to be less than clear. And furthermore, no one in Brussels believes that there is achance that a “bespoke” agreement vcan be agreed between the EU and UK, because of the EU’s decision making structure. A bespoke deal (anything unlike Canada or Norway, to name two examples but I could refer to Turkey , Ukraine or Korea too) will need UNANIMOUS consent from the members. And that will take a very long time, is unpredictable and fraught with other problems (for instance Canada requesting the same treatment). So, the EU’sd “take it or leave it” is not a threat or bluff, it is a simple indication that the EU itself lacks the capacity to make an unprecedented deal, even if that would look attractive for both sides. Hence what Hammond is doing is either pointless or to demonstrate that Brexit is a moronic idea for many people with incumbent businesses. Maybe a very good idea for hedgies and vultures..

      • alan jutson
        Posted March 8, 2018 at 8:16 am | Permalink

        Rein

        Rest assured the British people will eventually walk away.

        Our original National DNA and spirit may have diminished a little over the years, but no one likes to be dictated to for too long.

        The EU will eventually push too hard, and the UK will turn against them, we have a very long history of fighting for freedom, its not all gone yet.

        If our Government and other politicians do not recognise the above, then the people will eventually turn against them, once we have found a leader we can follow.
        Such a shame that we have so many people in Parliament with no courage, vision , spirit, or pride in self government.

  32. Dennis Zoff
    Posted March 7, 2018 at 12:25 pm | Permalink

    John

    How much longer must we endure this meaningless charade with Brussels? Their latest demand below, is ludicrous and tantamount to another deep threat?

    We are not Greece, we are Great Britain and we should act accordingly! We have to stand up to this bullying!

    READ THIS AND WALK: http://facts4eu.org/news.shtml

  33. Denis Cooper
    Posted March 7, 2018 at 12:48 pm | Permalink

    JR: “Most economists and most western governments agree that the more you free trade the more prosperous the participating countries will be.”

    Well, I would say that taking the upsides and the downsides together that is usually albeit not always true, but on the other hand I would question the magnitude of the net benefits which are generally assumed to flow from liberalisation of international trade beyond the level of freedom already achieved some decades ago.

    It seems to me that in general we have long ago reached a phase of diminishing returns from increased trade liberalisation. Some people have become concerned that the world economy has been expanding faster than the volume of world trade, but I don’t see that as a problem as much as a sign that we are already exploiting most of the potential benefits of freer trade and there is less to be gained from further liberalisation.

    That is why I am no longer surprised that according to the EU Commission itself the EU Single Market has added only 1% – 2% to the collective GDP of the EU member states, and possibly at a regulatory cost which is three times as great as the benefit, but equally that on statements from both the EU and the UK government there is relatively little scope to increase our GDP through new trade deals around the world.

    I pointed this out when David Cameron was exaggerating the potential economic benefits of the EU’s proposed TTIP trade deal with the US in order to bolster support for staying in the EU, and unlike some I do not now reverse my previous opinion because we are leaving the EU:

    http://johnredwoodsdiary.com/2016/02/13/lets-get-rid-of-eu-austerity/#comment-801195

    “However whether it’s £10 billion a year or £11 billion a year it’s a one-off increase in GDP – actually equivalent to about 0.7%, or one quarter’s typical natural growth – and not the increase in government revenues arising from that increase in GDP, which would be something like £4 billion a year.

    So there we have it. A projected boost to government revenues of £4 billion a year arising from the proposed EU-US trade deal would be so important that we must stay in the EU and not miss out on that cornucopia, the good times will roll, while the government saving £10 billion a year by leaving the EU is just a “joke”.”

  34. Crazytimes
    Posted March 7, 2018 at 12:57 pm | Permalink

    So according to Tusk it’s going to be free trade as per WTO rules..great stuff..so lets get on with it

  35. Ian Pennell
    Posted March 7, 2018 at 1:32 pm | Permalink

    Mr Redwood,

    Tariffs are infact a tax levied by the government on imported goods. Like VAT, which is a tax on most goods and services, it pushes up the price of such goods and makes things more expensive, reducing demand in the process. Reducing demand in the economy in this way, but using the proceeds from tariffs (or VAT) to cut business rates and Income Tax reduces demand but encourages the supply of goods. Over time this means more goods are produced and this actually leads to lower (or at least stable) prices. In other words, these policies would be anti-inflationary over time and help foster a strong economy.

    Now then, putting up VAT would raise a lot of money, but it is unpopular with Voters. Import tariffs can be sold as protecting vital UK Industries like Steel and they do not hit Voters directly; so this is not an unpopular tax. I am not talking about big tariffs on all Imports (which would cause other countries to retaliate) but just on a few select raw-materials and products to protect key Industries. However, Britain’s Treasury needs lots more money- and fast; Voters are tired of Austerity. Yet the Conservative-led Government must make sure Jeremy Corbyn and his hard-left acolytes remain a long way from power.

    So how about 10% import tariffs on Steel and Coal, which would help protect these industries? How about slashing Foreign Aid, EU and Green subsidies? Together this could raise £40 billion per annum to fund economy-reviving Income Tax cuts, business-rate cuts, more money for vital Public Services and a Flagship House-Building programme to appeal to younger voters- to give two million more first-time buyers a brand new home of their own for just £50,000 within the next five years (the extra funds would make this programme largely self-financing).

    The surprise surplus in borrowing figures over the last year also means the Conservatives should borrow another £10 billion annually to upgrade vital national infrastructure such as roads, rail and full roll-out of 5G mobile network. HS2 should be extended right up to Glasgow.

    All of this would appeal to millions of Voters and it would help keep that anti-Brexit, anti-Free Press and economy-wrecking Labour Party away from power. Politics is (unfortunately) about offering the largest number of Voters the biggest cherries so as to win the next General Election (clearly, this has to be done without crashing the economy- unlikely if most of the proceeds go on other tax-cuts). Import Tariffs cannot be something we should write off at this time since they can raise serious revenue.

    Ian Pennell

  36. Andy
    Posted March 7, 2018 at 2:46 pm | Permalink

    Brexit was a vote AGAINST free trade.

    A dislike of foreigners put ahead of economic interest.

    At the moment, because we share regulations, our trade in goods with the EU is largely tariff and barrier free.

    In services the single market is less good. We have different laws which make it harder – for people like lawyers to work in other countries. But it is still better than any other trade arrangement.

    Now the Tory hard-right wants to ditch our shared regulations. You want the people in Westminster who have screwed up our NHS, our schools, our housing, our social care, our transport to get more power to screw up everything else too.

    And, staggeringly, I have yet to hear ANY of you outline any specific individual EU regulations which you find objectionable.

    The fact is that the Tories are in a terrible and entirely predictable mess over Brexit.

    And my generation will do you a favour and will kill off your nasty party off as a result.

    Brexit is already a sinking ship. Brexiteers will get the blame when it goes down.

    • Anonymous
      Posted March 7, 2018 at 10:20 pm | Permalink

      Heavy on ranting and light on detail as usual so I shan’t be reading this idiot any longer. He has nothing useful to contribute.

      As a Leaver Rien Huizer gets my respect and attenti0n. So much for my ‘dislike of foreigners’.

      I’ve always blamed British people for their use of the EU as a cover to perpetuate Blairism and social Marxism, not foreigners.

  37. James Snell
    Posted March 7, 2018 at 2:50 pm | Permalink

    Did you hear Hammond going on about our respective outlooks for equal and mutual partnerships and the equivalence of financialservicand..blah blah..and compare that to what Tusk is saying.. and being pragmatic..whete did i hear yhat word before?

  38. Mike Wilson
    Posted March 7, 2018 at 4:24 pm | Permalink

    But the basic premise of this article – that if country A raises import barriers and company B retaliates and does the same – and both country’s imports and exports fall – it is not possible to judge who will be the winner or loser. Who trades the most? What goods are traded most? Is that trade highly profitable. This article is simplistic.

  39. Denis Cooper
    Posted March 7, 2018 at 4:25 pm | Permalink

    Philip Hammond is trying to negotiate some kind of special EU trade deal for financial services and not only his colleagues but the media are co-operating with the usual vast exaggerations about the importance of the City of London.

    On the BBC this morning:

    “If you consider everything from your bank, your insurance company, your accountant maybe, the financial services sector in the UK is huge, about 2 million jobs and about £125 billion for the UK economy”; so “It’s no surprise ministers try to protect it and make sure these companies can continue to do business freely across the UK after Brexit”; and that “They don’t up and leave taking their jobs and their business with them.”

    On Sky this morning:

    Financial services are “hugely important to the British economy”, they “account for more than 10% of our economic activity”, they “employ more than 2.2 million people in this country”, they “have unfettered access to the European Single Market” but that will end with Brexit, maybe we could get a special access deal if we “mirrored” all EU regulations, but Paris and Frankfurt are “trying to nick our business”.

    And then again on the BBC, the Treasury Minister Mel Stride:

    “What we know is that the City of London is 11% of our economy, it pays about £70 billion in tax every year, it is hugely important to us.”

    This is all exaggerations, the same deliberate and massive exaggerations which could equally well be called by the shorter name of “lies”; the same kind of lies which have been repeated for years before the referendum and are still being repeated now; the “City of London” is NOT 11% of our economy; it does NOT pay anything like that amount of tax; and it does NOT employ over 2 million people but only a small fraction of that number; and as with services in general only a small part of the “financial services sector”of the UK economy has anything to do with trade with the EU; and I’m not expecting that any of the nice ladies at my local Nationwide branch will find that Paris or Frankfurt have nicked their jobs however poor a post-Brexit deal may be negotiated with the EU.

    I come back to that difficult question of which services are “tradable”:

    http://johnredwoodsdiary.com/2018/02/24/restoring-our-fish-and-farms/#comments

    and refer back to September 2016 when a Tory MP suggested that at most “tens of thousands” were involved in selling financial services to the rest of the EU:

    http://johnredwoodsdiary.com/2016/09/21/mr-carney-is-not-an-unreliable-boyfriend/#comment-833246

    “Mark Garnier: There are actually 2.2 million in financial services.

    Professor Miles: The proportion of people who sell financial services to the rest of Europe, in some sense, is probably a very small proportion of that. Now, they may be people who are very highly paid and, therefore, from the point of view of tax revenue, it is a slightly different story. In terms of numbers of people, I suspect it is a rather small proportion of those.

    Mark Garnier: It would be in the tens of thousands, if that.”

    And yet the same old Remoaner lies keep coming, day after day, without the government ever bothering to refute them.

  40. ian parkinson
    Posted March 7, 2018 at 5:15 pm | Permalink

    Is the UK going to formally protest if the EU goes ahead with retaliatory sanctions against the US – in which we will be forced to follow?

    That would constitute action rather than just words when it comes to the UK claiming to believe in open markets and global trading.

  41. Iain Gill
    Posted March 7, 2018 at 5:33 pm | Permalink

    On twitter just now, exactly what our politicians should have been saying for a long time. Asking our workforces to compete with other countries not paying licence fees etc is ridiculous.

    @realDonaldTrump

    “The U.S. is acting swiftly on Intellectual Property theft. We cannot allow this to happen as it has for many years!”

  42. John
    Posted March 7, 2018 at 7:38 pm | Permalink

    The punitive tariffs on Chinese steel allowed by the WTO were brought in under Obama and supported by Trump

    The EU last year agreed to impose punitive tariffs on Chinese steel also, though several years late.

    Trump is only extending the policy of punitive tariffs on Chinese steel backed by WTO rules on the holes that have appeared on Chinese steel supply.

    In response the EU has declared a trade war and wants to tax jeans, whisky and cars!?

    I’m more on the side of Trump on this one.

    • John
      Posted March 7, 2018 at 7:42 pm | Permalink

      I also agree with Trump on an environmental point. Steel production should be on every continent and not shipped daily thousands of miles on diesel powered ships.

      Its a far more sensible and environmentally friendly policy he is pursuing.

  43. KatC
    Posted March 7, 2018 at 8:44 pm | Permalink

    Well now we know .. the EU is not bluffing .. just where is IDS now and M Gove with all of their promises that the bavarian car workers would concentrate the german governments mind and then mrs merkel would delivet for us..it’s not happening so looks like things will be according to WTO rules..therefore we had better get on with it so next we want to hear from Dr Fox about those new trade deals from overseas?

  44. Prigger
    Posted March 7, 2018 at 9:51 pm | Permalink

    The Cabinet Office which coordinates the receipt of foreign news, should be particularly keen to report to HM Government the almost silent world “outrage” at the “Nerve gas assault”. It is almost as if the British Government, British police, have lost all credibility from America to Japan from Brazil to Glasgow.

  45. anon
    Posted March 7, 2018 at 11:16 pm | Permalink

    The US is likely to be no worse off in any potential circumstance given its current trading position with some trading partners. The impetus from increase in US capacity could well re-energise its internal markets and also give a fillip to inflation.

    We need to exit the EU so we can decide our own trade arrangements with more amiable trading partners.

    We need to look for similar action as world “steel” prices could drop.

  46. Ron Olden
    Posted March 8, 2018 at 12:13 am | Permalink

    TRUMP’s TARIFFs

    I thoroughly disapprove of these tariffs that Trump’s proposing.

    Tariffs are nearly always a bad thing both for the country imposing them, and for everyone else.

    But given that he’s doing it anyway, he could deliver a big favour to the UK which would cost him nothing, and would also please the Republicans in Congress (and some Democrats), who he needs to back him.

    He could announce that as well as Canada and Mexico being exempt, imports of goods ORIGINATING in the UK (pending conclusion of a UK/US Free Trade Agreement), would be exempt as well, but only after we’ve left the EU.

    Given that they won’t be introduced till about the time we leave anyway, it will give the EU something to think about and scupper Remainers here.

    I doubt whether any Trump voters (or many others) will complain about him giving the UK a special favour.

  47. mancunius
    Posted March 8, 2018 at 12:57 am | Permalink

    Outrage wouldn’t be of much use. There are definite indications but as yet no proof that Russia was the instigator. The police have already announced that the attack was specifically targeted as a murder attempt on the two individuals and nobody else. And the security/forensics/police investigation has scarcely begun.

    The ‘world’ is being far from ‘silent’ on the matter: I’ve just looked round the press on the internet – the attack is getting really extensive global coverage; it’s currently either the top story or one of the most prominent stories in all the world’s dailies that I’ve glanced at, in America, Europe, the Middle East, even in Russia. (Not quite from the same angle in Russia, unsurprisingly: I noted one Russian reader btl commenting, ‘It couldn’t have been the KGB, as it was far too sloppy as a murder attempt’ – 🙂

    • mancunius
      Posted March 8, 2018 at 11:57 am | Permalink

      Sorry – this was a reply to Prigger, above.

      • Prigger
        Posted March 9, 2018 at 12:02 am | Permalink

        I’ve been reading just now information about “contaminated ground” of the development and lots and lots of other stuff regarding water and rivers in this connection. oh and such things as and “infills” of “rubble” from somewhere or other . and a new development on the site. Oh all this goes deep, deep deep. Lots of millions involved. No doubt everything will see the light of day soon…or someday anyway

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, He graduated from Magdalen College Oxford, has a DPhil and is a fellow of All Souls College. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.

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