Author: johnredwood

President Trump likes tariffs. Most economists and commentators dislike them. The so called international rules based order included the World Trade Organisation aiming to reduce tariffs. The WTO however allowed emerging economies and China to play by different rules to the advanced countries. The WTO let countries impose high tariffs and use high subsidies for food and agriculture.

President Trump has a range of aims for tariffs.

His idea of reciprocal tariffs is a device to get tariffs down . Why not make countries imposing tariffs against your exports pay the same tariff on their exports? It might persuade them to agree to getting rid of the tariff.

His penal tariffs on Mexico and Canada are designed to get them to stop the flow of harmful drugs and illegal migrants over their borders with the USA. They may well get them to tighten their borders.

There is the aim to use tariffs to onshore more investment in industrial capacity. It is a change of emphasis from President Biden’s expensive subsidies which distorted trade and may  well help onshore .

There is the aim of collecting more tax revenue. That is true, but its net effects may be less than the gross amount of additional tariff money if the policy reduces the growth rate or results in higher domestic prices squeezing real incomes.

Most commentary ignores the fact that the EU is a customs union with tariffs on 73 % of product lines that it imports. It imposes especially high tariffs on food and agriculture where the US is a leading   exporter.

Free trade is a good idea, but the WTO has never delivered it. The favourable terms for China has created huge Chinese trade surpluses.

I have longed argued against many UK net zero policies on two main grounds. In their own terms they are mad, as they increase world CO 2 forcing us to import and getting us to heat  homes and drive cars using electricity generated from gas. I have shown how you cannot make people buy battery cars and heat pumps and change their diets until the green companies can make products that perform better and are more affordable.

Let me add a third convincing argument. The UK cannot re arm and defend itself if it makes no steel, slashes its petrochemical industry , closes much of  its vehicle industry and imports most of its electronics. Modern wars consume huge quantities of ammunition, weapons, boats, planes and tanks. If you want to win such a war you need to build and protect factories to make big quantities of these necessities.

Some of you argue with the science, but these arguments should be easier to win with those who do see climate change as a threat. The UK is paying far too high a price to cut its 1% contribution to world CO 2 when the big producers, China, the USA, India and Russia keep increasing their output.The import model leaves  us unable to defend ourselves and adds to world CO 2.

I have never had problems with the NATO Treaty in the way I did with the EU Treaty because the NATO Treaty does not require a NATO member to do anything. There is no supranational court, fines and enforcement. It is a best endeavours voluntary agreement between its members. As we have seen the club fee is set at 2% of GDP spending on defence but lots of members have not implemented this. In the EU the UK was often forced to  enact laws and make payments it disagreed with under force of EU law.

The most famous Nato Article 5 says that an attack on one NATO member is an attack on all. All are requested to respond against the aggressor. There is no mandated minimum response for each, and a member may decline to join a war. When the Falkland Islands were illegally invaded by Argentina the US as the leader of NATO made clear she would not help us fight and win the war. Spain a NATO member was very hostile to us. The Nato Treaty did not cover the Falklands.

Less well known is the all important Article 3 which requires each NATO member to take strong steps to look after their own defence as the UK was expected to  do in the Falklands. This Article has not been well respected by some European members of NATO this century. Countries have let their militaries wither , relying on the prop of mutual aid.

The European end of NATO has seen plenty of action by generous numbers of senior officers meeting to co ordinate, wargame , intertwine supply systems and develop mutual dependence. There has been less concentration  on building larger and more effective national forces so European NATO has more ability to move large concentrations   of force quickly. Too much inter dependence can get in the way and slow things down. The EU now is also complicating things by introducing EU  led missions and EU joint procurements.

NATO was planned to handle continued US occupation  of Germany alongside the  UK, France and Russia post war, with the disarmament of Germany. It then defined its role to defend western Europe against the USSR with Germany as a member. Since the end of the cold war it has sought various missions in the Balkans.

If the US wishes to cut herself off from European conflicts there is nothing in the NATO Treaty to prevent  her. In 1914 and 1939 US opinion was strongly against intervening in European wars. The UK fought alone after the fall of France until the Japanese forced the US into the 2 nd WW.

History tells us the UK has to look to our own defences, geared to safeguarding our islands and ensuring greater self reliance in industrial and food production.

Time was when the UK/Great Britain had the most powerful navy in the  world. Policy dictated having a larger navy than any other pair of powerful nations. The UK sought to keep the peace, settle disputes  and uphold its own imperial interests with this global mobile power.The first great German war stretched the UK military with victory only coming after the late arrival of the Americans. It was mainly a land war needing the French army. The second world war was a joint win for the  UK, Russia and the USA. Post 1945  UK was badly damaged by the war. We had large debts to repay to the US who made us borrow and pay for war supplies.  Government granted independence to many countries and accepted at Suez it could not  dictate events against the wishes of the US. Since then we have accepted that the USA is the dominant power. It is her turn to police the peace, impose or assist settlements of disputes and pursue her global interests.

We have also accepted that we usually  side with the US against the communist/authoritarian bloc. We are the second biggest contributor to NATO, which has provided collective defence in Europe against Soviet/Russian expansion.We did not join the US in their ill judged war in Viet Nam.

As I have previously shown, the UK has suffered badly from land wars and invasion threats  from continental Europe. We have not had ambitions to conquer and occupy European lands for the last 500 years. Our sea moat has enabled us to see off the most  aggressive imperial threats from Spain, France and Germany since 1500. As the US  reconsiders its commitment to European defence the UK should not rush to replace the US in offering protection to continental countries. We should buttress the defences of these islands and  look outwards to the rest of the world to expand our trade and friendships.

The UK defence priorities should be anti missile,drone and aircraft systems combining surveillance with effective response. We need a bigger navy to defend our coasts and shipping lanes. We need much more industrial capacity as you cannot defend yourself in war depending on imports.

President Joe Biden made a disastrous decision to pull his remaining forces out of Afghanistan overnight, abandoning plenty of weapons and ammunition.He let down allies including the UK with troops stranded there without the US support they relied on. Afghanistan predictably fell to the Taliban that we and the  US  had fought for many years to prevent.

Biden then responded to Putin’s invasion of Ukraine by encouraging Ukraine to fight. He restricted the types of weapons he would  supply, told the Ukrainians not to use them over the Russian border and told NATO allies to follow similar rules. He made it quite clear NATO would stay out of the war as Ukraine is not a member.

There was no majority in the UK either to want us as members of NATO to commit our troops to Ukrainian battles. Accepting the Biden doctrine the UK signed up to a cruelty towards Ukraine. There would be enough weapons and money for them to stay in the fight but not enough for them  to win.With others we encouraged plenty of Ukrainians to leave their homeland, offering refuge here.

President Trump says this policy was wrong. He tells Ukraine to accept a peace deal. Ukraine and the EU disagree, presumably thinking they can reverse some or all of the losses of the last three years. This has just got more difficult without US  support.

If President Trump cancels future gifts of weapons and money the EU will have immediately to more than double its current contribution of both just to keep Ukraine where it currently is. It will need to go considerably further to give Ukraine an advantage over Russia. France talks tough but does not give anything like enough weaponry and money. Germany and Poland oppose even the idea of their troops being part of a peace keeping force.

The UK needs to rebuild home  defences and build the factories, blast furnaces, petrochemical works, shipyards and vehicle factories it needs to re arm. The UK cannot replace a large portion of lost US support as it lacks the industry and the cash. The UK should not offer troops to police any new Ukraine border as our army us too small and it would lack US/NATO air cover.

If the EU cannot replace  the  US then it needs to promote a peace plan. It is the EU’s task as the EU wants Ukraine as a member, pushing its borders further east.

We have now lived with a Labour government with a huge majority for eight months. They could have changed any law, budget, tax or policy they thought wrong in this time period. It is no longer an excuse for bad service to blame the past government whilst not offering proof of changes that have or will remedy the problem.

All the time we had a Con/ Lib or Con government I allowed wide ranging criticisms of government on this site including many I disagreed with. My own posts regularly pointed out problems and offered better solutions.

I will follow the same approach for a Labour government. Criticisms of the past government will not be posted as we discussed those at the time and electors  made their views clear in the election.

The person who sends over the top abuse about Labour is always wasting their time. It is easy to delete, so stop doing it, The person who daily blames a couple of billionaires for the many mistakes of successive UK governments needs to find a different outlet for the repetition of old stories which I am not going to repost.

The UK car industry campaigned strongly against Brexit, claiming they could face a 10% tariff which could be damaging. Brexiteers said the aim would be a tariff free agreement, as was secured. It was always likely as the EU exports so many cars to the UK and did not fancy a 10% tariff that would add £200-£300 to the price of a typical new vehicle.

The Remainers in charge of the official government then persuaded Ministers to impose a £15,000 tax on each new  petrol and diesel car over a small limit, a burden 50 to 75 times higher than a 10% tariff. The industry did not complain about this body  blow.

The industry signed up to the idea that they should move swiftly to shut down all their diesel and petrol car production and go over to battery vehicles. The idea they might use  hybrids as a transition was soon knocked out by purists demanding all electric cars. Hybrids were anyway heavier, more complicated and dearer, needing two power systems.

These companies were big, profitable and successful. Why didn’t they do some customer research to find out just how opposed to battery vehicles a majority of car buyers were? Why didn’t highly paid managers have any understanding of the majority of their customers? Why didnt they see the obvious business risks? Why sign up to ending successful runs making popular cars early to switch to the unknown and largely unliked?  Former Jaguar owners who used to replace their car with a new one regularly told the maker they did not want  to buy a battery one.The company  revelled in the idea of dropping people like these from their customer lists. They are still trying to find the new generation of battery Jag buyers.

The pathetic inability of industry bosses to tell the UK and EU governments they could not sell enough battery cars and they would suffer badly from a forced attempt at transition is now laying waste a once great industry. German car companies announce plant closures and redundancies. Honda has quit the UK and EU altogether. BMW is backtracking on keeping some electric Mini work at Cowley to replace the end of the petrol Mini lines. Vauxhall is slimming down. Ford no longer makes cars in the UK.

Meanwhile government Ministers tell us how much they treasure the  industry whilst doubling down on the end of petrol cars which is the cause of the collapse. I wrote two short books setting out how net zero rules were out of line  with consumer wishes. You cannot have a green revolution if customers wont buy green products, or if they see that these products often aren’t saving us CO 2 anyway.

Yesterday as predicted here came news of a further collapse of our car output in January. UK vehicle manufacture for the home market was down 30%. The government wants to stop all manufacture of petrol and diesel vehicles so they must be thrilled that one of their policies is working.

They keep lecturing us to buy battery cars. Most of us do not want to, and many cannot afford to anyway.

They have agreed the closure of the remaining blast furnaces and the UK’s exit from new steel making.

They have banned us producing from any new oil and gas field in the UK forcing us to import more.

They have imposed sky high energy prices to drive out remaining high energy using industries like ceramics, paper, glass, aluminium.

Their policies led  to the  closure of the critical large oil refinery at Grangemouth.

They put out spin of new jobs in green industries. These are outweighed by the industrial collapse. Most of the new jobs rely on imports, especially from China where most of the solar panels, wind turbines and battery cars are made. It looks as if they want to get more battery cars in the Uk by encouraging China to dump cheap battery cars here rather than struggle with 100% US tariff and the EU 40% tariff. The electric cars and heating  systems rely on electricity generated by burning gas in a power station.

The budget set up disaster for this government. It put Ministers in conflict with so many groups and interests

Farmers with family farms see their farms being taxed away from them with NI and Inheritance tax. They are on permanent protest.

Pensioners on modest incomes were mugged by the removal of their fuel grant just in time for a cold winter.

Small businesses face a large tax hike if they employ people. There has been a plunge in job vacancies already. The businesses will cut back more in April when the jobs tax hits.

VAT on school fees has led less well off parents to take their children out of fee paying schools, pressurising the state sector. Some private schools have closed.

The change of tax rules for investing in AIM listed shares has further damaged the London markets trying to provide money for business expansion.

The failure to  link well above inflation pay awards for some public sector workers to improved productivity means too much state borrowing

Allowing large increases in water bills, energy prices, and Council tax is pushing up inflation and hitting family budgets

The budget has stopped growth, increased inflation, increased borrowing and made the public sector less efficient and less affordable.

Now we see care homes and charities  saying they cannot find all the money to pay  the extra jobs taxes. Doesn’t the government care about any of this? Why wont it listen and mend its ways?

As I have pointed out there are easy ways to cut public spending by tens of billions without cutting services.

The last government was only slowly easing the self harm net zero policies the EU made us follow which the Climate Change Committee wanted to gold plate. They agreed to lift bans on new oil and gas drilling and new UK production. They delayed the ban of selling petrol and diesel cars but left in place damaging fines for selling too many. They relaxed the need to get rid of gas boilers and install heat pumps.

Mr Miliband arrived in office, reversed all of those measures and set about enforcing a more severe bout of self harm. He introduced “Clean” electricity only by 2030 requiring a further surge in imports and massive subsidies. He speeded up the closure of our petrol and diesel car plants and with the Business Secretary agreed the closure of our remaining blast furnaces. He probably welcomed the closure of the Grangemouth refinery.

Is he unaware of the massive damage his dear energy and rapid exit from gas is doing? Does he really believe relying on more windfarms and solar panels will secure our supply or lower the prices? Has he asked how much it costs to keep gas power stations on stand by for bad  weather? Has he seen how in cold snaps with little wind we pay sky high prices to import to keep the lights on?

Our electricity bills have 17% extra on for renewable subsidies and helping consumers who cannot afford the high prices. There  is VAT. There are windfall taxes on oil, gas and renewables. Oil and gas companies now have to pay 78%. The old Renewables Obligation certificates and the newer contracts for difference pour billions of pounds of subsidies into renewables.

The US grows faster and is a lot richer thanks to policies that deliver much cheaper energy. Their electricity price on average is half ours.