Trade wars

Part of the problem facing the world economy and assisting the global manufacturing recession is the outbreak of tariff and trade wars.

The largest is in the headlines regularly as China and the USA battle out a new basis for trade between them. There are others. There is the South Korea/Japan trade war over historic conflicts and grievances. There is the interruption to trade created in Kashmir by the clash between Pakistan and India. There are the tariffs the US has imposed on the EU following the adverse finding over Airbus subsidies. There is the US attempt to get Iran to change her approach to Middle Eastern politics by imposing a wide range of sanctions on trade with Iran, and now seeking to prevent payments for exports to Iran through the western banking system.

None of these is helpful to world growth, jobs and output. Many of them individually are not significant in their impact on the world economy, but cumulatively they are now having a measurable impact. More importantly they are also damaging confidence, which leads to cancelled investment programmes, less demand and a further slowdown in economic activity.

The US has escalated its dispute with China to include criticisms of China’s approach to the Hong Kong protests, and to encompass bans on the sale of US items to Chinese technology firms . The US is critical of China’s approach to intellectual property and concerned about the potential use of certain technologies for strategic and political purposes.

The UK’s recent tweaking of its proposed tariff schedule for post Brexit trade is a welcome example of an attempt to go the other way. Tariffs will be removed from certain items altogether, so 88% of our trade is tariff free once out of the EU. Economic analysis suggests removing all tariffs would boost consumers more and would benefit the economy over all but would come at a potentially high cost to sectors at risk, mainly in agriculture.

The government has sought to find a balance,. offering some tariff protection to UK farmers but otherwise opting for a freer system. IT is a pity the world as a whole cannot move on from this period of tariff wars, which are adding more downward pressures on growth to the monetary policy and economic policy mistakes of the major players .

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130 Comments

  1. Lifelogic
    Posted October 10, 2019 at 5:19 am | Permalink

    Indeed. Get the governments out of the way wherever possible please.

    So Dame Sally Davies wants to ban everyone from eating on public transport now, so how will they enforce that? Will it include eating a mint or an apple. Will it include breast feeding too?

    Is this nanny really the best person to be Master of Trinity College Cambridge I wonder?

    • Martin in Cardiff
      Posted October 10, 2019 at 8:52 am | Permalink

      Re your first sentence, that is exactly what the dedicated good people in our sovereign Parliament are trying to do, and, thankfully, with some success, LL.

      I trust that you will applaud their sterling, patriotic service to the nation?

    • Fedupsoutherner
      Posted October 10, 2019 at 9:25 am | Permalink

      L/L Don’t you mean Dame Silly Davies? What about people travelling long distances through the lunch time? Honestly, there will be nothing we can do without permission soon and all because some in society are not responsible for their own health.

    • Hope
      Posted October 10, 2019 at 9:57 am | Permalink

      JR, could you explain what happens if N.Ireland is in a different regime to the rest of the UK and what this means in relation to where tariffs go ie UK or EU? These vast sums are never mentioned only the vast EU contribution.

      The EU does not want a competitor on its doorstep and one where all tariffs goes to its govt rather than the EU.

      This seems to escape EU fanatics like Hammond and co. in being open and transparent to the British public.

    • Gary C
      Posted October 10, 2019 at 5:33 pm | Permalink

      “So Dame Sally Davies wants to ban everyone from eating on public transport now, so how will they enforce that? Will it include eating a mint or an apple. Will it include breast feeding too?”

      Good points, adding to that they cannot stop youngsters carrying knives so how do they think they going to stop them eating on public transport?

  2. Shirley
    Posted October 10, 2019 at 5:19 am | Permalink

    A very good move to reduce many tariffs. It will cost the UK not one penny, as the UK never benefited from the tariffs anyway as they made their way to the EU. Consumers will benefit a lot and hopefully UK agriculture can be protected.
    We need to produce more food but arable land is disappearing fast in our neck of the woods due to housing needs. It’s idiocy to keep importing more immigrants. Food production should take priority.

    • Martin in Cardiff
      Posted October 10, 2019 at 12:16 pm | Permalink

      Tariffs are not the main barrier to trade. Regulatory non-alignment is, and it is among the brilliant achievements of the European Union that it solved this between twenty-eight nations.

      • Edward2
        Posted October 10, 2019 at 10:12 pm | Permalink

        That is a myth Martin
        If you sell into Europe there are many different product requirements.
        Lighting, electrical systems and plumbing are just three examples.
        Yet UK manufacturing companies supplý what is needed to each country’s specifications already.

      • libertarian
        Posted October 11, 2019 at 9:19 am | Permalink

        Martin

        DO NOT TALK UTTER BALDERDASH

        For the entire history of trade from 20th century onwards providers of goods have always complied with the standards of markets into which they sell .

        With the 28 there IS NOT a uniform standard on many things , for a start there are 5 different types of electrical plug in use in the EU , plumbing supplies use different gauges etc etc

        Quote from EU website

        “There are also product rules that are not harmonised in the EU, this means specifications might differ in each EU country. In such cases, you must only comply with the rules applicable in the EU country where you intend to place your product on the market.”

        You should also be aware that a lot of basic standards are GLOBAL enacted by global trade bodies

        This nonsense repeated by people with no knowledge of business is one of the many reasons why remainers lack credibility . The reasons they cite for wanting to remain are based on myths and incorrect information

        • bill brown
          Posted October 11, 2019 at 3:04 pm | Permalink

          Libertarian

          The continued generalisations from you are losing their credibility, but you keep using them

    • Narrow Shoulders
      Posted October 10, 2019 at 1:52 pm | Permalink

      One issue I have with removing tariffs is our government’s punitive approach to climate change.

      We can not import goods that are cheaper from elsewhere just because we have made them more expensive to produce here due to climate levies.

      If we are going to pursue zero carbon by 2050 then we have to put tariffs on countries that don’t have the same restrictions.

      • Mark B
        Posted October 11, 2019 at 4:51 am | Permalink

        Agreed.

  3. Ian Wragg
    Posted October 10, 2019 at 5:25 am | Permalink

    You have Bercow negotiating directly with the EU to prevent Brexit. What makes you think that we will be leaving on October 31st.

    • Martin in Cardiff
      Posted October 10, 2019 at 8:54 am | Permalink

      Where is your evidence for those two claims?

      Ah. You’re a Leave voter. You don’t need any.

      • libertarian
        Posted October 11, 2019 at 9:22 am | Permalink

        Martin

        What you mean apart from Michel Barnier announcing he had met with Bercow to discuss blocking Brexit , what further evidence do you want ? A confession signed in blood?

    • Mark B
      Posted October 10, 2019 at 9:26 am | Permalink

      Ian

      We do not know the nature or content in which these discussions were taken but, as the Speaker is a public person and, as convention and precedence dictates has, only eyes to see and tongue to speak as parliament directs him, I ask on whose authority and in whose name were these discussions taken ?

    • Fred H
      Posted October 10, 2019 at 5:20 pm | Permalink

      it is about time that 5th column monster was taken out and locked up.

  4. Lifelogic
    Posted October 10, 2019 at 5:30 am | Permalink

    BBC going on about some social housing in Norwich winning the Stirling Prize. The reporter seemed rather excited that to (pretend to) save energy they have letter boxes outside on the gate posts rather than in the front door.

    That way people have to open the door to collect the post each day (which surely lets out rather more heat). Especially if you leave it open while you fetch the post as most probably will do. It helps to meet the governments rather artificial heat lost tests while wasting more energy in reality I assume. Plus being more hassle for the tenants and perhaps less safe too.

    • Lifelogic
      Posted October 10, 2019 at 7:04 am | Permalink

      How can it be right and fair for two people or families (on similar incomes & living in similar houses) for one ( in social housing) to have perhaps £ 100 PW of their rent paid by the taxpayer. While the other pays market rent? So they pay the same tax but one has perhaps £100pw more spending money courtesy of other (often worse off ) taxpayers.

      It is also totally unfair competition in the housing market where is the competition authority?

      • a-tracy
        Posted October 10, 2019 at 4:16 pm | Permalink

        Well, it isn’t fair that’s the truth of it. Oftentimes you are given social housing in an arbitrary way.

    • Lifelogic
      Posted October 10, 2019 at 7:06 am | Permalink

      These heat loss tests are also the reason so many house have such pokey small windows as it is the cheapest way to meet regs.

    • Fred H
      Posted October 10, 2019 at 5:19 pm | Permalink

      HILARIOUS . another green example of stupidity made to look wise.

    • rose
      Posted October 10, 2019 at 7:20 pm | Permalink

      I too thought that about the letter box and the front door being left wide open but on the other hand isn’t it a good thing they have chosen terraced housing over skyscrapers? Terraces with gardens fit in more people than skyscrapers, and most people prefer them.

  5. Mark B
    Posted October 10, 2019 at 5:54 am | Permalink

    Good morning.

    Tariffs are very attractive to government. It provides the means to tax the consumer without them feeling they are being ripped off. You see, unlike VAT and other taxes such as NIC, we do not see the percentage the government is taking. So a tariff of say 5%, although not large, can in certain circumstances make the government a lot of money.

    Currently we give the EU around £2bn a year in non-EU tariffs. That money, should we Leave, will go to the UK Government. Of course I would like to hear and know more about the government’s plan for a New Customs Partnership. I think this has fallen off the radar somewhat and needs revisiting. 😉

    • Denis Cooper
      Posted October 10, 2019 at 9:31 am | Permalink

      Well, £2 billion a year is of marginal importance in the larger scheme of things, for example compared to total UK government revenue of around £800 billion a year:

      https://www.ukpublicrevenue.co.uk/

      And it comes at a disproportionate compliance cost for businesses.

      Referring back to comments made in July 2018:

      http://johnredwoodsdiary.com/2019/10/08/car-loans/#comment-1061590

      “Making importers bear compliance costs of £1.8 billion so HMRC can collect £3.4 billion of customs duties seems unreasonable and stupid, whether that is done on behalf of the EU as now or it is done on our own behalf in the future”

      “Then going on to make businesses bear additional compliance costs of £17 billion to £20 billion to collect what could be similar additional revenue, maybe about £3 billion of duties on imports from the EU, seems utterly insane.”

    • Lifelogic
      Posted October 10, 2019 at 10:07 am | Permalink

      It would be good if all prices said something like Petrol £1.50 per litre cost 30p plus government taxes of £1.20!

  6. RichardM
    Posted October 10, 2019 at 6:01 am | Permalink

    So it’s a good bye to UK manufacturers relying on EU customers. Still, the peasants will have cheap food. Shame about the extra air miles foor it all though.

    • Caterpillar
      Posted October 10, 2019 at 9:16 am | Permalink

      RichardM,

      Food miles as both a CO2 and a sustainability measure were debunked over a decade ago.

      Mass food transport (enabled by refrigeration and packaging) vs individual e.g. Kenyan beans to supermarket good, driving to local farm bad.
      Seasonality e.g. shipped apples good, long duration refrigerated local apples bad. Minimising end processing by consumer e.g. least processed ingredients => more kitchen gadgets and longer cooking times => higher energy usage.

    • dixie
      Posted October 10, 2019 at 9:48 am | Permalink

      How many UK manufacturers, how many of those are actually European companies and how many won’t actually be able to sell to EU markets?

      Evidence please.

      The knife cuts both ways so from your extensive volume of evidence you should also be able to tell us which EU manufacturers will not be able to sell into our internal market. Might that include VW et al who don’t manufacture here, if not why not.

    • libertarian
      Posted October 10, 2019 at 2:30 pm | Permalink

      RichardM

      UK manufacturers have been relying on EU customers less and less for the last 10 years, most of our food will CONTINUE to come from the same places as before we just get them cheaper

      Do you know what you voted for ?

    • John Hatfield
      Posted October 10, 2019 at 6:30 pm | Permalink

      Just 8 per cent of our firms do business with the 27-member bloc.

      • RichardM
        Posted October 11, 2019 at 7:05 pm | Permalink

        Oh so it’s ok to lose 8% of our firms.

        • libertarian
          Posted October 12, 2019 at 5:29 pm | Permalink

          RichardM

          I love remainers like you, every time you post you show your total lack of knowledge

          Those 8% of firms ( about 400,000 companies) dont ONLY export to the EU, they also export to the rest of the world

          What is hilarious is how the ignorant think that all trade stops if we aren’t in the SM and CU

          You do realise if what you thought was true no one in the EU would own a mobile phone as just one example

          Laughing out loud here

          Oh by the way I’m one of those 8%

          I export to Spain, also Brazil, Japan and Canada . Spain is the smallest market for me and whilst I would like to retain it ( theres no reason why I won’t) it would not damage my business that much if we didn’t .

          Keep posting Dickie , you do the leavers job for them

      • dixie
        Posted October 12, 2019 at 2:15 am | Permalink

        define “our”. Is it a company that perhaps used to be British but has relocated R&D and IP, production and profits elsewhere?

        Would you include Cadburys who pretend to be a UK company but aren’t? Or Jaguar, British Airways?

        If there is no such thing as “our” firms then why should we allow foreign ownership, or FDI as a means to strip IP when other countries won’t reciprocate or make things very difficult.

  7. Dave Andrews
    Posted October 10, 2019 at 6:10 am | Permalink

    Should we not apply tariffs to countries like in Eastern Europe, where the national minimum wage is a third of what it is here? Should we only offer zero tariffs where there is a level playing field?

  8. Dominic
    Posted October 10, 2019 at 6:22 am | Permalink

    Trump uses tariffs to confront communist barbarity and oppression in China and is slandered. Obama incites civil war in Syria to alleviate Germany’s reliance on Russian gas and he’s praised. This is the western media today. Utterly repugnant to the core, highly politicised and without moral foundation

    Tariffs? Trump should impose even greater tariffs on any despotic state that exports their products to the US and then when US democracy is dismantled by those reprobates on the other side Trump can point to their support for oppressive states

  9. Sea Warrior
    Posted October 10, 2019 at 6:45 am | Permalink

    Whatever his failings, Trump, unlike other western leaders, has got the measure of China. Sadly, too many western nations – Australia, for example – are being completely spivvy in their attitudes towards Beijing.

    • Mitchel
      Posted October 10, 2019 at 10:07 am | Permalink

      Sea Warrior-and others-I’m afraid you do not understand the lead the Chinese already have-and which they will extend if the China 2025 project achieves it’s objectives.I would stongly suggest everyone read a recent (26/9/19)article in Asia Times by Asia specialist,David P Goldman-“We need our mojo back vis-à-vis China”-(googleable and free to view).

      Take the issue of Huawei and 5G-specifically “Quantum communications”:-

      “…a Chinese innovation which inaugurates a revolution in signals intelligence.Washington’s campaign to dissuade its allies from buying 5G mobile broadband technology from Huawei has been a humiliating failure;not a single country on the Eurasian continent bent to American threats,which included the suspense of intelligence sharing.Quantum communications(QC) explains why.

      Not only the Chinese but S Korea,Japan,Britain and others are building the capability to embed QC in the new 5G networks.Not only will China go dark to US signals intelligence;the rest of the world will,too,in short order.Huawei’s 5G systems will wipe out America’s longstanding advance in electronic eavesdropping.The US intel community spends $80bn a year,mostly on SIGINT and the whole investment is at risk…….China will allow the rest of the world to cut off America’s access to everyone else’s data.When Secretary of State Pompeo urged a senior German official not to buy Huawei’s broadband,the German replied that China hadn’t eavesdropped on Chancellor Merkel’s cell-phone connections,unlike the US.”

      • Fred H
        Posted October 11, 2019 at 10:50 am | Permalink

        Like geostationary satellites for Satnav etc, we have been at risk of US pulling the plug at their choosing. We may develop our own after leaving EU. The group of countries sharing mobile comms data, will be disadvantaged after 5G, but then at risk of China pulling the plug.
        So which do you prefer?

        • Mitchel
          Posted October 11, 2019 at 3:03 pm | Permalink

          China is unlikely to be bombing anyone back into the stone age.Nor does it tear up international agreements on a whim;I’m relaxed about going with China.

  10. Everhopeful
    Posted October 10, 2019 at 6:45 am | Permalink

    Don’t think UK manufacturing has much faith in govt policy ( I read) but in spite of perception and according to ONS we are doing ok. Even compared to 1970s.
    Trump is facing an election and needs to address “ Rust Belt” syndrome in recognisable ways? MAGA etc. Get people back to work.
    (Might be more to the point to get another McCarthy).
    Some say the EU is in decline ..heading for recession so it doesn’t have many muscles to flex trade wise…and hasn’t it been taking unfair advantage of low US tariffs for years?
    And then there is China v EU in the stainless steel battle…Let’s get out now!

  11. oldtimer
    Posted October 10, 2019 at 6:48 am | Permalink

    The most significant element in the trade wars appears to be Trump’s aim to persuade/force US companies to reverse their “hollowing out” policies that caused them to relocate operations away from the USA to benefit from lower wage rates. The second is his determination to replace shooting wars (which have been notoriously unsuccessful) with economic wars. It is difficult to see how either will change this side of the US presidential election, or after if Trump wins a second term.

    • Mitchel
      Posted October 10, 2019 at 10:15 am | Permalink

      All the economic wars are achieving is the destruction of the post war financial system and $ as reserve currency.Russia and China are using their advanced cyber/crypto/fintech skills to construct an alternative system out of reach of the US.Russia and Turkey(Russia is one of Turkey’s largest trading partners) announced yesterday they are de-dollarizing in their bilateral trade(probably using the ruble as it’s the nearest thing to a gold-backed currency these days)with Turkish banks connecting to the Russian SWIFT alternative.

    • Eh?
      Posted October 10, 2019 at 8:12 pm | Permalink

      You can tell if a leader is winning hands down when the Opposition tries to use the law to stop his success and accuses him of sexual improprieties with legal implications. I speak of Trump only of course. No parallels here

  12. Stephen J
    Posted October 10, 2019 at 6:56 am | Permalink

    Yes Sir John and we in the UK should be doing all we can to support President Trump, particularly in his dealings with China, who are behaving abominably over Hong Kong.

    But so far, we have heard nothing…

    Not a single word of support for a true analysis of what we have let them get away with.

    Globalism stinks, it hollows out the economies of less well managed nations, and the people pay for their politicians’ lack of skill. President Trump has not only proved it, he is taking action against it…

    We should be supporting him.

    • Fedupsoutherner
      Posted October 10, 2019 at 9:19 am | Permalink

      Quite right Stephen but it seems that whatever Trump does regarding anything the media are always against him. True democracy in the Western world is severely under threat and never more so than in the UK with what is going on at the moment. We have no say anymore. We have too many people in authority that are against the people.

    • Mitchel
      Posted October 10, 2019 at 11:01 am | Permalink

      Mr Trump’s options are limited.According to a recent survey by the Chicago Council on Foreign Affairs,whilst 63% of Americans describe China as rivals,68% say the US should pursue a policy of friendly co-operation and engagement with China vs 31% who want to work to limit the growth of China’s power.

      And the Asia pivot/Indo-Pacific Stategy is in tatters.The serious spat between S Korea and Japan can only help with the Sino-Russian objective of “Finlandizing” S Korea and sucking both Koreas into their Greater Eurasia project.Furthermore, the hope of enticing India is fading-India is significantly broadening and deepening the close relationship with Russia it has had ever since independence.According to a 6/9/19 article in The Diplomat “Is Asia Ready for an Indo-Russian order?”:

      “……It(India) has not bought into the US idea of containment which retains features of the Cold War pushback against the former Soviet Union.Moreover,India has carefully broached the issue by avoiding overt anti-China posturing in the region.It has shown no desire to toe the US line which it deems as harming it’s “strategic autonomy”.”

    • tim
      Posted October 10, 2019 at 4:20 pm | Permalink

      Stephen J, Dominic, oldtimer, Stephen J, -YES I totally agree, Donald Trump is a great leader, and he puts America first, Let us hope this has rubbed of on Boris. We need to stop attacking Russia and make friends with them, and start to concentrate on the giant Leviathon {China} slowly but surely taking hold of the entire free world. But until we get free of the EU parasite we can do nothing.

      • Mitchel
        Posted October 11, 2019 at 9:39 am | Permalink

        That’s a lost cause;you will not separate Russia and China,at least not for the next decade-they are on a roll,it’s the west which is collapsing.As Mr Putin said some years ago:

        “Let China be the wind in our sails.”

        Besides which you blew it by moving NATO to Russia’s borders.

  13. Martin in Cardiff
    Posted October 10, 2019 at 7:02 am | Permalink

    Perhaps a majority of your contributors appear to want a trade war between the UK and the European Union, John.

    I think that it’s pretty clear that there would be no net winners for either side, but that the UK would come off far, far worse.

    • Robert McDonald
      Posted October 10, 2019 at 8:52 am | Permalink

      So please explain how we will be far far worse off, or even worse off. The eu export far far more to us than we do to them.

    • dixie
      Posted October 10, 2019 at 9:54 am | Permalink

      In my experience the majority of contributors you scorn on this blog wanted an FTA. Some of us don’t believe the EU can be trusted so wouldn’t want to go that far considering the EU has engineered a bigger slice of the pie whilst we have been under it’s administration.

      If the EU wants to turn things into a trade war that is their decision. Personally, I would rather give my trade to friends and family in the UK and Commonwealth, and to countries who wish friendly trade.

      Certain EU countries have demonstrated they do not wish friendly relations at all so why trade with them.

    • Edward2
      Posted October 10, 2019 at 12:22 pm | Permalink

      I see little evidence of that claim.
      Most say they want free trade with low or no tariffs

    • David Taylor
      Posted October 10, 2019 at 1:54 pm | Permalink

      A Trade war is possible , trade with & from the EU is stifled by its over regulation .
      There is too much regulation .
      Britain trades more with the non E.U countries than with the E.U .

      On another matter , Mr Trump did not parrot what was written on his briefing notes did He ? He stated that He would talk to the American woman and try to do something about the situation , which is nothing like what has been reported in various newspapers .

    • libertarian
      Posted October 10, 2019 at 2:33 pm | Permalink

      Martin

      Please explain how we would come off worse when we buy more from them than they do from us. Come on explain, you post this nonsense almost daily but never give concrete examples just brain dead analogies

      Put up

      ps I dont want a trade war with anyone which is why I voted to leave an organisation that tries to restrict trade and applies huge negative tariffs operating a protection racket

      • libertarian
        Posted October 12, 2019 at 5:32 pm | Permalink

        Martin in Cardiff

        Tumbleweed

        Posts a meaningless statement, challenged to produce evidence, runs away

        Hilarious

    • Original Richard
      Posted October 10, 2019 at 6:26 pm | Permalink

      It’s obvious that UK leavers do not want a trade war with the EU even though we have currently a trading deficit with the EU of £100bn/YEAR.

      Leavers want the UK to leave the EU and regain the country’s freedom as smoothly as possible.

      It is the UK remainers who are threatening that the UK will be economically damaged because the EU will apply high trade tariffs to UK exports and will apply non-tariff barriers to trade including blockading ports, stopping flights, imposing excessive regulatory and customs controls etc..

      Who else but the EU would be hindering our importation of medicines and fresh food ? Certainly not the UK!

    • pragmatist
      Posted October 10, 2019 at 8:08 pm | Permalink

      No we wouldn’t. Smaller nations are bureaucratically incapable of making preparations for a trade war. They lose out from day one. They cannot withstand a political backlash by their opposition parties. Politicians don’t take prisoners

  14. Posted October 10, 2019 at 7:04 am | Permalink

    The point that is often missed is very simple and which Trump fails to recognise is that when you increase tariffs it is inflationary.

    Tariffs will not make America great again.

    There’s nothing inherently bad about a trade deficit. It doesn’t mean one side is winning and one side is losing. But understanding why one side has a deficit and the other has a surplus is an important part of understanding this discussion and whether it can be fixed with changes to trade policies.

    Now, the main reason the USA runs a trade deficit with countries like China is because it’s much cheaper to make stuff in China than it is in the USA. A factory worker in China commands just $3.60 per hour versus $23 in the USA. US workers command higher wages because there are fewer workers and those workers demand higher wages to meet their higher living standards. The inverse is true in China where living standards are lower and there is an abundance of labour.

    When multinational US corporations decide where they’re going to make their goods they can either choose the $23 worker in the USA or the $3.60 worker in China. In the last 30 years more and more companies are choosing the $3.60 worker in China because that results in higher relative profits in the USA. But the thing that many people don’t realise is that when those goods are made in China they are often reported as imports into the USA. So you have US companies selling US products that are made in China and reported as imports in many cases.

    Of course, you might say that US workers are worse off because they have lost their jobs to the Chinese workers. This is true in some sense and wrong in another sense. When US corporations make their goods in China they are then able to sell those goods at much lower prices in the USA. So while some workers are worse off the larger consumer base is better off since the benefit to the US consumer is that they get the cheaper goods AND they have more money to spend elsewhere. Importantly, this results in demand in other parts of the economy which leads to job growth in other segments of the economy.

    So let’s say we want those jobs to come back to the USA and decide that raising prices on China’s exports is a good way to do that. Well, what really happens there? In short, Americans end up paying higher prices for all of those goods sold in the USA because corporations will pass on the costs to their consumers. And if they decide to bring the jobs back then all those goods are now being made by a $23 worker which results in the same price increases to the end consumer. In either case, this raises the cost of things like iPhones and reduces the amount of money we have to spend in other parts of the economy. Yes, it makes some workers better off, but it makes most of them worse off.

    Now, Trump and his team think that making those imports more expensive is a good deal because Americans will then buy American produced goods which will increase the number of American workers building those goods. But the more likely outcome is that those jobs never come back because companies like Apple won’t just bring those jobs back to the USA – they will move them to places like Vietnam because they have to protect their profit margins.

    • a-tracy
      Posted October 11, 2019 at 10:26 am | Permalink

      Derek, Trump boasts that job creation rate hasn’t gone down through his tariffs it went up? He says unemployment also went down and it was fact-checked that companies also moved back to America.

    • Fred H
      Posted October 12, 2019 at 11:57 am | Permalink

      self-sufficency on essentials is always better than relying on others. Importing luxury goods is fine, and the consumer can have an effect on pricing – stop buying – price falls.

  15. Alan Jutson
    Posted October 10, 2019 at 7:07 am | Permalink

    Its as simple as do as I say, not do as I do.

    That sort of policy does not work long term.

  16. George Brooks
    Posted October 10, 2019 at 7:14 am | Permalink

    Our hands are tied while still a member of the EU but once free we will set an example and have much more influence. Our ability to trade his been suffocated for years by EU rules and regs.

    Only a few more days to go. Let’s hope

    • margaret howard
      Posted October 10, 2019 at 12:30 pm | Permalink

      Makes you wonder why we begged to join them in the first place!

      • Fedupsoutherner
        Posted October 10, 2019 at 10:14 pm | Permalink

        Not what the EU has become now Margaret. Change the record. Its on replay.

      • Edward2
        Posted October 11, 2019 at 5:49 am | Permalink

        Because it was a simple trading club of 6 similar nations called the Common Market.
        Many of us thought it would be good for business.
        Back in the days when the left hated the idea and campaigned to stay out, calling it a bosses club.

  17. Alan Jutson
    Posted October 10, 2019 at 7:32 am | Permalink

    I see it is now being reported widely, that our Speaker is having Direct talks with the President of the EU, in order to frustrate Brexit.

    How is this allowed to happen JR, I thought the Speaker was supposed to be impartial.

    Our so called democratic system is now becoming an absolute farce.

    Rather than draining the Swamp, its now starting to overflow.

    • Bob
      Posted October 10, 2019 at 10:00 am | Permalink

      So the Speaker and the Supreme court have now formed a quasi govt?
      Has HMQ consented to this?

    • Dennis
      Posted October 10, 2019 at 12:04 pm | Permalink

      As usual JR cannot summon up a response . Perhaps he is scared of the Speaker?

    • Asleep ticketeer
      Posted October 10, 2019 at 8:04 pm | Permalink

      Don’t worry, he started asking for a plane ticket a week ago and has only just got to the part where they ask “Where to?”

  18. Andy
    Posted October 10, 2019 at 7:33 am | Permalink

    It is wrong to say that 88% of our trade will be tariff free once we have left the EU.

    You can ditch all the tariffs you like on imports – and it seems that you will – but that does not do much for exports.

    British producers and manufacturers will face significant barriers selling overseas because there is little to no incentive for other countries to offer us tariff free access to their markets when they can secure virtually tariff free access to our markets regardless of what they do in return. Most countries will choose to offer some protection to their domestic businesses. The Tories are offering next to none.

    They hope services will make up for it but we already know services rarely form any part of trade deals – and services are significantly harder to align than goods. Most countries can agree to similar standards for TVs or kettles for example – but nurses and lawyers are something else entirely.

    As in the 80s and 90s the Tories are knowingly consigning millions to unemployment. Have they no shame?

    • Mike Wilson
      Posted October 10, 2019 at 11:10 am | Permalink

      So, the answer is to trade much less. We could start by buying cars made here instead of having an obsession with German cars. In my experience they make good cars, but they are expensive to buy and very expensive to repair. Having owned a few Audis – and a number of Toyotas – I am very happy to own (and buy in future) a nice, British built Toyota.

      The obsession with trade means outsourcing has been viable. So we have lost lots of skilled jobs in manufacturing. Many of our problems could be solved by:

      Growing our own food.
      Creating our own energy.
      Trading as little as possible and only where necessary.

      In many ways the EU is neither the problem nor the solution. It is intrinsically undemocratic which is why we need to leave.

    • Robert McDonald
      Posted October 10, 2019 at 12:03 pm | Permalink

      You clearly don’t know how business works.

    • Edward2
      Posted October 10, 2019 at 12:27 pm | Permalink

      Yet again you show how little you know about international trade andy.
      The UK will offer low or no tariffs to suitable countries on chosen products but not unilaterally.
      There would need to be an agreement that suits both parties.
      So your long rant is based on a false premise.

    • Richard1
      Posted October 10, 2019 at 1:11 pm | Permalink

      The Thatcher govt in the 80s transformed the UK economy making it the most dynamic in Europe.

      Its policies were followed and imitated around the world

      particularly in former socialist / communist countries

      and together with Reagan, Thatcher faced down Soviet communism, winning the cold war and so liberating 1/2 of Europe.

      that’s why Thatcher is recognised as a world-historic figure

      45 countries representing 70% of applicable trade have so far rolled over EU deals to the UK. you said this wouldn’t happen.

      you were wrong.

      Of course – assuming the UK isn’t bound by a Brino deal – there will be new trade deals.

      Many trade deals also cover services.

      Its the EU which has been so slow and reticent in extending the SM to services

      Odd how the view of Continuity Remain is tariff free trade is essential with the EU, but essential we don’t have it with the rest of the world (unless through the EU). which is it – free trade is good or free trade is bad and we need protectionism?

      make up your mind

    • libertarian
      Posted October 10, 2019 at 2:34 pm | Permalink

      Andy

      Hold on you told us the value of the pound would collapse following Brexit

      I dont think you have a clue what youre talking about

      • bill brown
        Posted October 11, 2019 at 2:58 pm | Permalink

        Libertarian,

        The loss in value of the Pound has already happened compared to the dollar, EURO and SWFR

  19. Thames Trader
    Posted October 10, 2019 at 7:38 am | Permalink

    I’d like to see a proper grown-up debate about the pros and cons of setting our tariff for imported cars at a Trump-like 20% (I believe the current plan is for 10%). This would put the wind up the german car industry, putting more pressure on Merkel’s leadership of the EU to agree a deal and strengthening the case for building cars in Britain. There would be downsides and a proper debate about these would be interesting (not the usual uninformed Project Fear and hysterical shouting).

  20. Lifelogic
    Posted October 10, 2019 at 7:44 am | Permalink

    Highest (and most idiotically complex) taxes for 40 years, the grim reaper and economically illiterate Philip Hammond in the Telegraph and on LBC today. Going on about chlorinated chicken and hormone fed beef.

    He is showing very conclusively why he should never, ever be allowed back into the party. It would tarnish (even further) the Conservative brand and he would surely undermine the next Conservative government (if there ever is one) if he is allowed back.

    No real Conservatives would vote for him anyway. Get lost and join the LibDims if you must Hammond. You were never a real Conservative. Conservatives believe in low taxes, deregulation, cheap reliable energy, free markets, small government, freedom of choice and real democracy for the UK. Hammond wants the compete opposite.

    • Bob
      Posted October 10, 2019 at 10:18 am | Permalink

      He was on Radio 4 too this morning, promoting the Brussels viewpoints naturally.

      The BBC has become an open platform for Remoaners and climate alarmists to promote their causes.

      Apparently, Tony Blair’s idea of road pricing is now being resuscitated because the Treasury need a new source of revenue to replace what they’re losing through their idiotic CO2 hysteria.

      We need a UKIP govt as a matter of urgency!

    • Mike Wilson
      Posted October 10, 2019 at 11:01 am | Permalink

      You can’t ‘believe’ in ‘cheap, reliable energy’. It may be that energy is not cheap and that may have to be accepted as fact. Of course, digging oil and coal out of the ground is cheap – relatively speaking – but expensive in other ways as it is so very, very DIRTY. It must be cheap as the government takes 70% of a gallon of petrol in tax. But how do you price the cost of childhood asthma in our cities? You surely have to take that into some sort of consideration, even if only fiscal.

      • Lifelogic
        Posted October 11, 2019 at 4:35 am | Permalink

        They do not have to be “dirty” and CO2 is not dirty it is plant food.

  21. CHRISTOPHER HOUSTON
    Posted October 10, 2019 at 7:47 am | Permalink

    All trade negotiations are trade wars.

    • Mike Wilson
      Posted October 10, 2019 at 11:02 am | Permalink

      And yet, they aren’t.

      • CHRISTOPHER HOUSTON
        Posted October 11, 2019 at 8:41 am | Permalink

        It depends where you draw the line and if you draw it. If you as a consumer for example decide not to buy Irish products and 17.5 million people decide similarly plus their non-voting youngsters then negotiators at the very highest level are not trade-warring. And yet, they are

  22. A.Sedgwick
    Posted October 10, 2019 at 7:47 am | Permalink

    A likely reason for trade wars is the balance has gone between many countries. An impulse purchase yesterday of an own label, big retailer, tube of mints I later read – made in Netherlands. This is another industry with the UK once a world leader that has been thrown away. Tariffs may not be the answer but incentives for UK manufacturers are. The EU is a drain on our balance of trade and manufacturing, Corbyn & Co. would finish it off. No wonder given the option of No Deal or Corbyn almost 100% of businesses say NO DEAL.

    • IanT
      Posted October 10, 2019 at 9:16 am | Permalink

      Not to mention my favourite brown sauce, which you could smell being brewed as you drove the Aston Expressway – and which is now also made in Holland.

  23. Kevin
    Posted October 10, 2019 at 7:52 am | Permalink

    The Prime Minister, meantime, has another Scottish sword of Damocles hanging
    over his head in the form of the “noble office” of the Court of Session. This term
    means the judges’ ability to provide a remedy in a legal dispute (the disputed
    matter here being the Benn Act) where no remedy otherwise exists. So,
    you can help us leave the EU, judges. You can legislate instead of Parliament.

  24. Posted October 10, 2019 at 7:59 am | Permalink

    I really do hope that Brexit is delivered. If you go onto the left wing Labour sites – like the Canary – you can see that the lawyers are lining up to make the Prime Minister apply for an extension. Apparently Parliament is going to have to sit on a Saturday to try and prevent this – or something or other.
    It is, as you say, a cruel hard world out there. But inside the EU we are tied hand and foot when it comes to economic decisions and initiative. We just have to trust our native cunning and determination.

    • Mike Wilson
      Posted October 10, 2019 at 11:05 am | Permalink

      We just have to trust our native cunning and determination.

      Why so? It is a level playing field. All we have to do – if we are OBSESSED with trade – is to make good products at a price that will sell.

      Just think – if we stayed in the EU but everyone in this country decided to buy cars made in Britain and food grown in Britain. Who would care about trade with the EU if we didn’t do much. As it is it is largely one way. Maybe we could make our own pills to pop.

  25. NickW
    Posted October 10, 2019 at 8:23 am | Permalink

    The EU does not want a free economy anywhere near it and will do anything and everything to prevent that from happening.

    Regarding the strange activities of Bercow, paragraph 55 of the Supreme Court Judgement regarding Miller v HMG contains the following;

    ” The Government exists because it has the confidence of the House of Commons. It has no democratic legitimacy other than that. This means that it is accountable to the House of Commons – and indeed to the House of Lords – for its actions, remembering always that the actual task of governing is for the executive and not for Parliament or the courts.”

    Negotiating Treaties is the duty and sole prerogative of the Government, Bercow is Parliament, not Government.

    Bercow’s actions are in contempt of the Supreme Court, as are those of the rogue MPs who have been plotting with the EU behind the Government’s back.

  26. David J
    Posted October 10, 2019 at 8:31 am | Permalink

    The US and China represent 40% of the Global trade: there has been a significant imbalance in favour of China, this has been compounded by China’s relentless theft of IP in terms of copied product. Trump- love him or hate him- is starting to redress the balance. Post the Presidential elections some of the heat will come out of the relationship. This is the main driver in the global slowdown- but not the only factor.

    Brexit tariffs. The government have laid down the olive branch to say that we are open for business- to everyone. That has to be good as it will promote trade agreements and not protectionism.

  27. BOF
    Posted October 10, 2019 at 8:37 am | Permalink

    Governments always seek advantage in trade negotiations and a balance has to be struck between a strong negotiating position and being screwed due to weakness. Fairness should be the outcome but unfortunately this is not always the case.

    Evident in current negotiations with the EU is their overwhelming desire to maintain control over the UK. Sovereignty should not be compromised in any way as this is the key to successful trade negotiations after Brexit.

  28. agricola
    Posted October 10, 2019 at 9:12 am | Permalink

    Free Trade unencumbered with tariffs or bans will only arise when all nations fly by the same moral compass. I cannot name any nation that is whiter than white in this respect so continue to anticipate minor or major disruptions for the foreseeable. As we the UK are starting with a clean sheet in many respect after Brexit, why not use it to set an example. The opportunity exists within the Commonwealth to create a true free trade area. Members are not coerced into membership so those who may wish to take part are free to do so. It would not be without problems but I cannot think of a better grouping of sovereign nations with the potential to achieve it.

  29. Fedupsoutherner
    Posted October 10, 2019 at 9:15 am | Permalink

    How come there are reports of 5 cabinet ministers resigning over a no deal scenario? They all knew what Boris said would happen and were happy to take their posts. They make me sick.

    • Fred H
      Posted October 11, 2019 at 6:50 am | Permalink

      +1

  30. Iain Gill
    Posted October 10, 2019 at 9:38 am | Permalink

    I am just off to have a snack on a train.

    In open defiance of the publicly funded nonsense the public sector has churned out today.

  31. Iain Gill
    Posted October 10, 2019 at 9:45 am | Permalink

    I think the world needs to find equitable ways of applying tariffs. For instance country X produces more pollution than country Y for a given industrial process, then tariff of those goods from country X should be higher. Country A uses child labour to undercut Country B, then imports from country A should have a higher tariff than country B.

    I realise this could lead to bureaucrats assigning the tariffs to everything, without any accountability, but thats largely what happens already.

    I dont think that we should stop tariffs at all, I dont believe in a “freerer system” I believe in a system which encourages low pollution, safe industrial practices, intellectual property protection, and so on. I want as far as possible a “level playing field” for UK workers in competition with the rest of the world, not a system that rewards those countries using the cheapest and worst anti-pollution gear, safety gear, and so on.

  32. JoolsB
    Posted October 10, 2019 at 9:50 am | Permalink

    “The US has escalated its dispute with China to include criticisms of China’s approach to the Hong Kong protests,”

    If only the UK Government would take a similar stance. I am embarrassed by my Government’s almost silence on the matter.

  33. Gareth
    Posted October 10, 2019 at 9:50 am | Permalink

    I think tariffs are unfairly demonized, while they should be ideally zero the same could be said of any tax.

    While long term tariffs may lead us to slightly worse resource utilization in the short term they simply can be balanced out by reducing costs elsewhere. This point needs to be made publicly. A UK exporter would be happier with a 10% tax cut when charged 10% tariffs to the EU then free trade.

    On Iran and China I believe the issue of helping a authoritative regime outweigh free trade, although that argument could also apply to the EU.

    Now the EU have ruled out free trade I would like to see the UK government spend its energies on the rest of the world which is keen on free trade.

  34. a-tracy
    Posted October 10, 2019 at 10:24 am | Permalink

    This is all very confusing.

    I thought 80% of goods traded were tariff-free anyway.

    What will happen with VAT, the EU takes a portion of internal UK trade VAT I think I read 0.3% (we pay more than Germany I was told), I believe they also take 80% of imported VAT from RoW? The EU runs on around £155bn doesn’t it, this money doesn’t come from the membership fee. When Ireland moves goods across their land border does the EU get 80% of the VAT or 0.3% of the VAT?

    Can we see the detail of the figures raised and what the EU are actually arguing over because it’s bound to be the money.

  35. Mick
    Posted October 10, 2019 at 10:47 am | Permalink

    Off topic
    Just been watching Corbyn giving a General Election speech in Northampton, what a load of Bo££ocks , everything to be put back into public ownership ,free prescription , free student loans, one million new homes, a deal with the Eu aka a surrender to them to keep us in the single market & custom union etc etc , were the bloody hell will the money come from oh I know increase in taxes and borrow more, the guy is a walking disaster for our country how can anybody in there right mind even think of voting for this bunch of muppets , when the General Election does eventually come the Tory’s are going to have to have a pack with the Brexit party to guarantee success and win a majority in Parliament

  36. James Freeman
    Posted October 10, 2019 at 10:56 am | Permalink

    According the HMRC, it will cost £15Bn a year to administer customs paperwork to trade with the EU after a WTO Brexit. So presumably it also already costs the UK a similar amount to trade with the rest of the world.

    This is complete madness! The admin costs are an order of magnitude higher than the revenue raised in tariffs.

    Without trade deals we cannot do anything about exports, but surely a simpler system can be devised for goods imports?

  37. Mike Wilson
    Posted October 10, 2019 at 10:57 am | Permalink

    And, as always, ‘global trade’ is offered up as some sort of panacea for the world’s problems. I am interested in the UK’s problems. Just once I would like to hear a politician say that we should trade as little as possible. That we should grow our own food, create our own energy (NOT dig it out of the ground and burn it!) and make as much of the stuff that we NEED to consume as possible. That, allied with some plan to redistribute wealth from the obscenely wealthy so everyone, on their one visit to this planet, has a decent and interesting life.

    But, no, we are treated again to a load of stuff about trade and tariffs. You forgot to mention borrowing to buy new cars every couple of years as a boost to the economy.

    I moved to the West Country recently. It really brings home just how much of this country is covered with grass to feed cows and sheep. Shame we don’t grow food that doesn’t have to use animals to be converted to food. It is very inefficient.

  38. Denis Cooper
    Posted October 10, 2019 at 11:49 am | Permalink

    I tend to agree with Philip Hammond about the marginal value of new trade deals the UK could make with countries around the world; where I disagree with him is about the value of our present special trade arrangements with our EU neighbours.

    I am not alone in suspecting that Treasury economists succumbed to pressure from their political masters and built models with a favourable bias towards the impact of our trade with other members of the EU compared to the rest of the world.

    Back when David Cameron was trying to bolster support for EU membership by talking up the economic value of the proposed TTIP trade deal with the US the numbers were larger than Philip Hammond is now suggesting, in fact larger than his numbers for all possible new trade deals.

    From April 29 2015:

    http://johnredwoodsdiary.com/2015/04/29/parliament-the-media-and-numbers/#comment-764434

    “I mention this figure of £10 billion because at an election meeting here last week a question was asked about potential risks to the NHS from the proposed Transatlantic Trade and Investment Partnership, TTIP, between the EU and the US:

    http://ec.europa.eu/trade/policy/in-focus/ttip/

    and the Conservative candidate, one Theresa May, extolled its virtues and said that it would provide a £10 billion boost to our economy.

    That would, of course, be a one-off rise in GDP, and as that one-off rise of £10 billion or 0.6% would be spread over a number of years it would pale into insignificance compared to the £100 billion or £200 billion added through natural growth.”

    Now instead of Theresa May as a member of the previous Cameron government talking up the benefits of TTIP we have had the Treasury under Theresa May talking down the benefits of that and other trade deals, estimating that trade deals with all the English speaking countries including the US would be worth only 0.2 – 0.4%.

    While the Treasury estimates of the loss of GDP if the UK left the EU without a special trade deal and defaulted to the WTO treaties exceed the estimates from the German ifo institute by a factor of about four:

    http://johnredwoodsdiary.com/2019/03/07/euro-area-growth-falls-away/#comment-1001064

    International trade has already been liberalised to such a degree that as a general rule we should only expect diminishing returns from further liberalisation, but by the same token resiling from the special preferential trade arrangement of the EU Single Market will not have such a large impact as might once have been the case.

  39. Dennis
    Posted October 10, 2019 at 11:54 am | Permalink

    Surely this is all very good news as it will reduce perhaps significantly climate change emissions. Why haven’t the protesters brought this to our attention, or have they?

    • Mark B
      Posted October 11, 2019 at 5:48 am | Permalink

      Why haven’t the protesters brought this to our attention . . .

      They are too busy waiting for their order at a certain Fast-Food restaurant to notice. 😉

  40. Dennis
    Posted October 10, 2019 at 12:10 pm | Permalink

    NickW – who knows what JR thinks about that and a lot more too. He’s a dark horse all right.

  41. Rule Britannia
    Posted October 10, 2019 at 12:35 pm | Permalink

    It is a pity, but there are more important things than trade. It is to the credit of the USA that it has taken a stand on China/Hong Kong and to our shame that we have not done so, especially in view of the fact that we are the other party to the relevant treaty.

    Economic policy mistakes they are – but that’s the consequence of democracy: ‘the worst system of government apart from all the others’. We have dumbed it down to the point where actors are elected as governors and people with no experience of much of anything elected to be part of leading a country, since politics became tribal and that sorry state has been increasingly weaponised by those seeking power.

    The upsurge in political correctness opened the door wide – you can no longer challenge someone, even on the basis of ability or suitability for a role. It seems that the answer to perceived discrimination is deemed to be to accept discrimination in the opposite direction, which leads to the UK being led by the metaphorical equivalent of a bunch of (purportedly) liberal teddy bears wearing various colours of rosettes.

    We have only ourselves to blame, collectively, for getting what we voted for (unless of course we vote to leave the EU).

  42. Ian @Barkham
    Posted October 10, 2019 at 12:50 pm | Permalink

    When we say ‘Free Trade’ is it meant to mean you can produce goods with the cheapest labor and turn up with them in any market place without fear of contributing to that society. Or do we just simply mean goods should be able to travel without hindrance to a marketplace, with the seller contributing to that community in the same way as the locals.

    The contradiction is that to some it means they want to profit from a community but never contribute to it. That attitude is the same as weaponizing trade, strip an area of wealth and move on. Modern day rape and pillage

    You also get it in reverse places like the EU are protectionist, if its not tariffs being used to keep others out it is expensive standards, while at the same time subsidizing their own internal market.

    Strategically subsidizing your internal market does have merit in terms of a country’s security and prosperity. However, that then becomes something more sinister if that subsidized production is then exported elsewhere. That is weaponizing trade to undermined another society i.e. to destroy their commerce therefore security – which is the US complaint against the EU and China.

    Nearer to home the EU has the CAP, yes that is for the protection of its own production capabilities, but once those same producers export they are in fact waging war against other countries.

  43. Ian @Barkham
    Posted October 10, 2019 at 12:57 pm | Permalink

    Off Topic, but worth a share –
    “The EU is committed to respecting the territorial integrity and constitutional order of the UK, just like the UK has committed to respecting the integrity of our single market, including Ireland, obviously,”

    “Therefore, the EU proposes to carry out these checks in the least intrusive way possible.

    “For customs and VAT checks, we propose using the existing customs transit procedures to avoid doing checks at a physical border point.

    “Companies in the rest of the UK would fill in their customs declarations online and in advance when shipping goods to Northern Ireland.

    “The only visible systematic checks between Northern Ireland and the rest of the UK would involve scanning the bar codes of the lorries or containers, which could be done on ferries or in transit ports.

    The above is Mr Barnier last October(2018) in the European Parliament that online customs declarations and bar code scanners could be used to carry out the necessary checks without erecting infrastructure at the border.

    It makes you smile just how the goal post get moved.

  44. tuppence
    Posted October 10, 2019 at 2:03 pm | Permalink

    I see the Daily Express is writing you up again John- a good paper to have at your back if you need publicity with the brexit classes- hope they will be still there when all of this crazy stuff goes pearshaped in a few weeks – very likely starting the first week of November in Dover- again Mrs Merkel’s fault I presume-

  45. BillM
    Posted October 10, 2019 at 3:28 pm | Permalink

    Both the EU and China are guilty of provoking these “Trade wars”. For decades they have got away with the huge disparities between Imports from the USA and Exports to them.
    Imported vehicles to the USA, for instance, carry a 2.5% trade tariff whereas Exports from the USA to both the EU and China are taxed at 10%. Why is this?
    Is it any wonder the Whitehouse are trying to equalise them?
    The problem is that neither the EU nor China want to play on a level playing field but seem to think that Mr Trump is as a gullible Obama clone and will not dare challenge them.
    The USA trade deficit with these two, amounts to a staggering circa $500 Billions per year and this has been the case for decades.
    It is time they realised that Mr Trump is not a politician but he is a successful and experienced hard nosed Businessman who sees the USA as his Corporation and its citizens his responsibility. He is there to right the wrongs.
    It is time these two woke up to these facts and solidly met their responsibilities towards fair trade practices. It will be the best outcome for all parties.

  46. Original Richard
    Posted October 10, 2019 at 4:18 pm | Permalink

    Although the EU likes to say that it is better to be a large bloc concerning trade, the reverse is in fact the case :

    1) It is easier and quicker to reach a deal if you are a single country, rather than a group of 28 countries each with their own economic interests.

    2) In the case of the EU there is no mechanism to compensate those areas or countries which may lose out in any deal which may be negotiated for the benefit of more influential members, so some countries may lose out heavily.

    3) Outside of the EU the UK will not only be able to negotiate trade deals which benefit our type of economy, rather than that of Germany (cars) or France (food), but we would no longer be in danger of access to our institutions (such as the NHS) being traded away for cheaper tariffs on cars and wine.

    4) Outside of the EU we are less likely to be affected by trade wars between two larger blocs.

    • a-tracy
      Posted October 11, 2019 at 9:20 am | Permalink

      It sounds like our NHS supplies chain was already traded away Richard to such a degree that a Dame yesterday said sick people in the UK were doomed without an EU deal because they now supply a vast quantity of drugs.

      • Original Richard
        Posted October 11, 2019 at 1:41 pm | Permalink

        Surely who supplies the drugs is not important ?

        As it happens the UK exports more medical supplies to the EU than it imports.

        Of more importance to the continued existence of the NHS is just how many people it will be treating free of charge if we remain in the EU, particularly an expanded EU.

  47. acorn
    Posted October 10, 2019 at 4:39 pm | Permalink

    Once the world gets rid of Trump, things will cool down considerably. He, having played a part in exporting US jobs to cheaper labour countries, (via Neo-Liberal globalisation); now wants to bring them back again, presumably at the same foreign wage rates.

    The US is running a $500 billion a year current account deficit. Getting the benefit of importing finished goods, components and services, in exchange for fiat “units of account” called US Dollars. The US Treasury has a bottomless pit full of brand new US Dollars. It is the US Dollar issuer, you can’t get them from anywhere else.

    The result is all the countries that exported to the US, end up with large piles of US Dollars. China currently has $3,210 billion worth (the UK = $187 billion) of “foreign currency reserves”. That’s how the US Dollar has become the World’s reserve currency, the planet is awash with them. The US economy is actually driving this World’s total economy. This is the bit that Trump Conservatives do not understand.

    As long as all those holding US Dollar assets continue to believe in the strength of the US economy, they will be happy to keep holding them. In these troubled times, people are dumping fragile currencies and buying US Dollars, which is pushing up its value; little to do with FED interest rates. You can’t say the same for the Euro or the Pound. In the latter case we must assume that the UK Treasury and its wholly-owned BoE, are well prepared to tackle “capital flight”, should Sterling dive as a consequence of any form of Brexit.

    • a-tracy
      Posted October 11, 2019 at 9:17 am | Permalink

      Which Neo-Liberal policies acorn?
      I read Trump created more new jobs in America nearly 5 million in his first two years. America lost 34% of its manufacturing jobs between 1998 and 2010 on average manufacturing jobs paid nearly $80,000 per year. If he is exporting low wage jobs and importing higher waged jobs that a benefit isn’t it?

    • Mitchel
      Posted October 11, 2019 at 9:32 am | Permalink

      Having weaponised the $ through sanctions,the world (other than the USA’s vassals) is becoming less keen to hold $-you have seen this most acutely with Russia,holdings down from a peak of c$180bn to $9 bn currently.

    • Mark B
      Posted October 11, 2019 at 4:49 pm | Permalink

      Acorn old chap, where have you been the last 50 years? Clinton, Bush and Obama have all partaken in highly pointless and destructive wars. Things have been much cooler since President Trump.

  48. Know-Dice
    Posted October 10, 2019 at 4:43 pm | Permalink

    Off topic.

    To anyone who may be interested:

    Smart Border 2.0
    Avoiding a hard border on the island of
    Ireland for Customs control and the free
    movement of persons

    An EU publication – https://www.europarl.europa.eu/RegData/etudes/STUD/2017/596828/IPOL_STU(2017)596828_EN.pdf

    In summary:
    The first answer to the research question is:
    There will be a need of a Customs and Border solution post-Brexit on 29 March 2019
    at 23.00, regardless of political solution and Brexit negotiation results. It will have
    severe consequences if such a Customs and Border solution is not designed,
    developed and implemented to facilitate the movement of people and trade.

    The second answer to the research question is:
    It is possible to implement a Customs and Border solution that meets the
    requirements of the EU Customs legislation (Union Customs Code) and procedures,
    with expected post-Brexit volumes of cross-border people and goods, if using a
    combination of international standards, global best practices and state-of-the-art
    technology upgraded to a Smart Border 2.0 or similar solution.

    • acorn
      Posted October 12, 2019 at 2:10 pm | Permalink

      The author has since retracted much of his report,which was part of his election campaign for the WCO.

    • Posted October 18, 2019 at 7:41 pm | Permalink

      VAT not paid on goods not at port od entry requires tracking internally by the eu
      System is already in place.

  49. Denis Cooper
    Posted October 10, 2019 at 6:03 pm | Permalink

    This report on the Sky website includes a video which implies that in a no-deal scenario not only goods but the 30,000 people who now freely cross the Irish border every day for work would become subject to controls at the border:

    https://news.sky.com/story/boris-johnson-and-irish-pm-meet-in-wedding-venue-for-last-ditch-brexit-talks-11832073

    Totally ignoring the provisions of Common Travel Area which long predated the creation of the EEC/EU/EU and is expressly recognised in the present EU treaties.

    Likewise the Irish Times website has this video:

    https://www.irishtimes.com/news/world/brexit/brexit-a-day-in-the-life-of-an-irish-border-crossing-1.4040102

    which from the start assumes that any border controls would be applied to people and not just goods, notwithstanding this report in May in the same newspaper:

    https://www.irishtimes.com/news/politics/britain-and-ireland-to-sign-common-travel-area-deal-1.3884176

    “Britain and Ireland to sign Common Travel Area deal”

    “Agreement will guarantee the free movement of people between the two countries”

    Neither of these grossly misleading media reports has been challenged by Michael Gove’s famous rapid rebuttal unit, which is still stuck with just three articles.

    • Garland
      Posted October 11, 2019 at 2:31 pm | Permalink

      Any border controls that are applied to goods will also affect people

    • acorn
      Posted October 12, 2019 at 1:58 pm | Permalink

      The full range of rights under the CTA only applies to British and Irish citizens. Irish immigration officers have the power to treat those from outside the EU and EEA coming from the UK as though they have come from elsewhere. In the UK certain categories of traveller coming from Ireland require leave to enter, mainly those who require visas or are deemed a security threat. (British Academy)

  50. Lindsay McDougall
    Posted October 10, 2019 at 8:35 pm | Permalink

    America wants to fight fewer foreign wars. That’s great news. But it exaggerates the effectiveness of economic sanctions. It still wants influence overseas without spilling its blood.

    It’s about time that the UK made its attitude to China’s trade policy clear. We should apply import tariffs to counteract subsidies, something that the WTO ought to approve of. We should give partial backing to USA policy on the theft of intellectual property rights. However, patents should last for about 5 years rather than 20 years or sine die. That way, innovators get rewarded but not for ever. This rule should apply to most pharmaceutical and high tech products.

    More controversially, I propose that WTO rules be altered so that higher tariffs may be imposed on goods imported from countries ‘running a dirty economy’. To begin with, that would apply to countries burning too much coal, including America, China, India, Germany and Poland.

  51. Englander
    Posted October 10, 2019 at 9:09 pm | Permalink

    It’s all higgledy-legaledy-piggledy and is interpreted as in all countries by who has the unelected power. These people in all fairness may not have available data.

  • 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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