They certainly aren't just a problem for the UK, but the EU companies suddenly needing new markets at the same time as the UK actually makes the UK position even worse. Any cross over areas of exports suddenly means massive new competition.
Brexited | the worst threads live the longest
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In the latest episode of the United Hour Podcast, Nik (@Rood) is joined by CEO Duncan Drasdo and Financial Director Andy Green from the Manchester United Supporters Trust for a special episode on all things behind the scenes at Old Trafford including a brief history of MUST and their aims today, views on INEOS and Sir Jim Ratcliffe so far, and the Old Trafford regeneration.
They certainly aren't just a problem for the UK, but the EU companies suddenly needing new markets at the same time as the UK actually makes the UK position even worse. Any cross over areas of exports suddenly means massive new competition.
France's exports of wine to the UK is 0.28% of its total exports and cheese to the UK is 0.07% of its total exports.
However, the trade is not suddenly going to stop, it just becomes more expensive.
The biggest importers of cars produced in the UK are China and the USA who are not in the EU.
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All well and good if we produced our own luxury cars and machine parts, it won't just be German cars that increase in price in the UK when we leave, it will be all of them. People driving a Merc, BMW or Audi now won't be swapping it for a British made car, I'll weigh up my budget and may have to downgrade my E-class for a C-class when I get a new one although thankfully my renewal will be up before the actual Brexit so I'll not face that for 5 years.
We're going to need to buy our food from somewhere, especially when the cost of UK produce rises after we refuse entry to all the seasonal labourers from the continent that the UK industry currently relies on. The ironic thing is that many of the biggest "British" food brands are now part of multinationals and are generally made in the Netherlands, Belgium and Germany so we're likely to find that even stuff we considered British rises in price including the likes of Marmite, HP Sauce, Twinings, Smarties etc as they are all made elsewhere in Europe these days.
I know British wine has improved but it's still not up to scratch with the stuff we import when you compare the price bottle for bottle, it will just become more expensive for the cheaper French, Spanish, Italian and German wines and remain situation normal for the vast majority of the mid price plonk we import which comes in from Argentina, Chile, the US, Australia and South Africa for the most part.
If you want decent French cheese you're going to have to pay more for it or accept a bland British alternative like Somerset Brie, same with decent chocolate from Belgium, France and Switzerland rather than that high vegetable fat stuff that leaves a film on the roof of your mouth that we produce in the UK whilst anyone that drinks Belgian beers is hardly likely to revert to Carling.
I think you have just described the majority of politicians in this country, of any colour, over the past 20 odd years.
Well the sky hasn't fallen which proves that all the remainders are idiots.
I checked again today and it's still up there.
If however the sky should fall after brexit it will be because of foreigners
In fairness it is because many official bodies including The Bank Of England and the European Commission were badly wrong about the initial impact of Brexit.
Their projections were based on the very idea of the UK leaving the EU would cause a crisis in consumer confidence which would in turn cause significant economic contraction.
As the proposed NIC increase for the self-employed has been dropped, where will the missing 2 billion quid come from ?
There will be repercussions on both sides of the table. However it won't everybody the same way and there might be countries that might even benefit from Brexit.
The UK till now had seen itself as cutting itself from the EU while retaining most of its current trade and wealth as if that trade and wealth is somehow static. Hence why many had criticised such attitude as cherry picking. It can't be further from the truth. Competition in the EU exist. A British car part manufacturer is still competing with a French car part manufacturer and a German car part manufacturer to sell its products to the EU market. What the EU does is to harmonise laws among those within the EU domain which create a level field environment for companies to work in.
Now what will happen if the UK leaves the EU without a deal? UK manufacturing is pretty much integrated to the EU one. Hence before the final product is on the market, its parts come and leave the UK as they are refined elsewhere. Therefore red tape and tariffs will have to be forced upon that part as it leaves and enter the union. The final product would also incur tariffs, if of course, its sold in the EU. That means that products (finished products (ex cars), unfinished products (tyres) and raw material (milk)) from the UK will become more expensive.
And what happens under such circumstances? Well, the producer will look elsewhere. That means products will be made in other EU countries, hence those areas will become richer and the areas were those products used to be made will become poorer. That surplus will reduce itself as the EU customer will be able to afford more products at the expense of the UK ones.
Sir Andrew Cook explains it magnificently at the link below.
http://www.bbc.co.uk/news/uk-politics-38540813
Their projections were based on the principle that the UK would actually trigger article 50 soon after the vote, and not twat around for 8 months dragging it out, weren't they?
The EU commission has recently had to upgrade its 2017 UK growth prediction that it made in November at 1% to 1.5% so they continue to be wrong. I'm not sure the prediction were made on that assumption initially either. I could be wrong though.
The OECD also recently upgraded the 2017 forecast to 1.6%.
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I can see where all you guys are coming from regarding which Merc you'll be able to afford ( my heart bleeds for you - how about a Jag ? ) or where Marmite is made, or having to start drinking inferior wines ( ever tried Argentinian Malbec - superb ) etc, etc.
But apart from raw materials, there is very, very little which the UK wants and / or needs which can't be manufactured in the UK or imported from countries outside the EU and which at the moment are prohibitively expensive because of EU tarifs. Same thing for the EU as well - most things currently bought from the UK can be sourced inside the EU.
My simple maths says the UK's Balance of Trade would be about $43 billion better off if that's what happens. And if it ends up with WTO tariffs, well the UK is going to be anywhere between 5% and 45% of $43 billion better off than the EU countries.
But if you guys think that Big Business in the EU is just going to shrug its shoulders and move on while the politicos in Brussels do their best to block trading deals, then I'll remind you of just how much in the pockets of Big Business ALL politicos are, even those in Brussels.
But apart from raw materials, there is very, very little which the UK wants and / or needs which can't be manufactured in the UK or imported from countries outside the EU and which at the moment are prohibitively expensive because of EU tarifs. Same thing for the EU as well - most things currently bought from the UK can be sourced inside the EU.
My simple maths says the UK's Balance of Trade would be about $43 billion better off if that's what happens. And if it ends up with WTO tariffs, well the UK is going to be anywhere between 5% and 45% of $43 billion better off than the EU countries.
But if you guys think that Big Business in the EU is just going to shrug its shoulders and move on while the politicos in Brussels do their best to block trading deals, then I'll remind you of just how much in the pockets of Big Business ALL politicos are, even those in Brussels.
https://www.theguardian.com/business/2017/jan/05/chief-economist-of-bank-of-england-admits-errors
https://www.theguardian.com/business/2017/jan/05/chief-economist-of-bank-of-england-admits-errors
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I know a little about the forecast model of your treasury (the models of the BoE won’t be completely different). They make a shit-ton of assumptions and many of these assumptions are “controversial” (e.g. the size and duration of the shock). Yet by changing some variables even a little, you might get quite different predictions. The short-term VAR analysis models are already quite problematic, but their assumptions were nothing short of crazy (or better: political motivated). Anyone should understand that predicting a “special” event like Brexit (or specific crisis) with a model that is calibrated with the data of the last 25 years is "difficult". The long-term prediction follow a different model and make slightly more sense, yet these models run also hand in hand with incredible uncertainty. The idea that anyone of us can make credible statements about the economic development of the next 10-20 years is quite laughable. These models have their utility, but you need to understand them (and statistics) at least to some extend to understand their meaning. Catchy headlines create more confusion than anything else.
There's 2 very different issues there. On the EU goods being more expensive, sure. That's down to both regulatory standards and some protectionism. The EU certainly doesn't want China dumping vast quantities of below cost textiles into the EU market (which happened recently due to UK incompetence or fraud) and damaging European textiles companies. When we leave the EU we can certainly buy in some stuff cheaper. On the regulatory side though, our choice then becomes do we want to start buying in lower quality products which could well have been produced under substandard conditions and which don't carry the quality guarantees we've come to expect? Is that a price worth paying?
As for just replacing things made in the EU with things made locally, the question then becomes what was stopping us before? Either we can't do it as cheaply or we can't do it at all. If we can't do it as cheaply now then what's going to make it cheaper once we leave the EU and don't have tariff free imports on materials and parts? Again the only option is to reduce regulations and settle for substandard goods. So maybe we go back to kids toys made with lead based paints or cows fed on mashed up bits of other cows. Yay..
If its not intentionally misleading, you lack some very basic understanding on how economies work.
Sigh.
As others have deconstructed this laughable post already, I will just add something to this sentence:
"As most of Germany's exports are high quality / high value hard products, not services, then I wonder how may other EU countries can afford to buy all those expensive ( and desirable ) cars and machine tools to make up for the reduced sales to the UK ?"
Do you think before you write something?
You just said it yourself, those are high quality products. Who will buy them if you leave without a deal? You. Just that it becomes more expensive.
The biggest strenght of the German economy and trade is that most of the goods are irreplacable.
You really think someone will buy a Jag instead?
They won't. You know why? In Jaguar's bracket, the biggest sales driver are company cars. Those companies are looking for resale value. The resale value of German cars is higher. They will continue to buy how they buy.
There is very little the UK can't manifacture themselves? True. Thing is, the UK doesn't produce anything anymore. You have decidied to have a service/baking economy. Especially the latter is very vulnerable to new EU regulations, while it is, in reality, impossible to just stomp whole industries out of the ground. Most of the knowlegde needed for those industries is long lost in the UK and won't ever come back.
You really have lost your sense for reality. Or, you really don't know better.
Probably the latter.
See guys, this is how we ended up with Brexit.
Baking economy
Your question about reglation / quality is valid. And the answer is a question of morals and choice, no ?
Can I ask whether you, personally, have stopped buying Nike trainers or Apple products even though there's overwhelming evidence they're made in Asian sweatshops by child labour or adults being paid less than $1 per hour as a matter of moral principle ? If you have, then good on you - especially because you're probably one of a miniscule mintority. I mean, if everyone had the same moral standards as you're suggesting we should have, then Nike and Apple plus hundreds of other 'brands' just wouldn't exist.
But I'll also remind you that many Third World countries complain bitterly that more than few of the EU's current quality regulations ( plus tariffs and quotas ) appear to be specifically designed to protect the Single Market from cheaper competiton. So maybe we should widen the debate to include where the EU's moral compass is, now, today, and not just where the UK's moral compass might end up in a couple of years' time.
As for your second observation - multinationals. They make things where they can get the biggest economies of scale. And in crunching the numbers, they obviously take into account on-site labour costs and from-site transportation costs.
I agree that not all of them will make changes to their geo-economic locations if the UK and the EU don't get a deal, but not too many will be prepared to ignore the world's 6th largest economy and simply stop making, say, UK branded cigarettes at a factory in Poland, as they are not only walking away from the UK market, but if they do they are also fecking up the economies of scale for the factory in Poland. It wouldn't be beyond the realms of possibility that there will be manufacturers who will bring previously relocated factories back to the UK if the majority of those factories' output is for the UK and other non-EU markets. Not saying that will happen, but don't rule it out. Yay indeed....
Can I ask whether you, personally, have stopped buying Nike trainers or Apple products even though there's overwhelming evidence they're made in Asian sweatshops by child labour or adults being paid less than $1 per hour as a matter of moral principle ? If you have, then good on you - especially because you're probably one of a miniscule mintority. I mean, if everyone had the same moral standards as you're suggesting we should have, then Nike and Apple plus hundreds of other 'brands' just wouldn't exist.
But I'll also remind you that many Third World countries complain bitterly that more than few of the EU's current quality regulations ( plus tariffs and quotas ) appear to be specifically designed to protect the Single Market from cheaper competiton. So maybe we should widen the debate to include where the EU's moral compass is, now, today, and not just where the UK's moral compass might end up in a couple of years' time.
As for your second observation - multinationals. They make things where they can get the biggest economies of scale. And in crunching the numbers, they obviously take into account on-site labour costs and from-site transportation costs.
I agree that not all of them will make changes to their geo-economic locations if the UK and the EU don't get a deal, but not too many will be prepared to ignore the world's 6th largest economy and simply stop making, say, UK branded cigarettes at a factory in Poland, as they are not only walking away from the UK market, but if they do they are also fecking up the economies of scale for the factory in Poland. It wouldn't be beyond the realms of possibility that there will be manufacturers who will bring previously relocated factories back to the UK if the majority of those factories' output is for the UK and other non-EU markets. Not saying that will happen, but don't rule it out. Yay indeed....
FCBforever....
Like I said last time - you really are an insulting little twat, aren't you.
As many people have said the past few hundred years - it's easy to love Germany, just difficult to love arrogant germans.
Edted to add that I just showed your post to my wife.
She's German.
And she agrees with me.
Like I said last time - you really are an insulting little twat, aren't you.
As many people have said the past few hundred years - it's easy to love Germany, just difficult to love arrogant germans.
Edted to add that I just showed your post to my wife.
She's German.
And she agrees with me.
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Maybe the UK prefers home made bread, Hovis, just like when I were a lad
Bread is so crap in the UK, western and north europe is where its at.
Agreed
Denmark is amazing, good cheese too
You laugh but Channel 4 paid £75m for Paul Hollywood and a tent.
Did they get the other freaks for free?
You mean the short to mid-term effect immediately proceeding the result of the vote right?
Because the impact is not felt until the After the actual split.
I'm devastated
And we'll get another timeline if it doesn't happen then
Yeah I mean we have only lost about 20% of the value against the euro so far...
Sadly probably worse to come by the end of the month as well
thats not what BoE or treasury predictions said.
No, what I mean is that the short term effects were predicted by every man and his dog in the field of economics to be far worse than they have proven to be. That is why people have become sceptical of the 'doomongers' economic predictions on the matter.
Personally I expect a significant economic downturn in the next 2-5 years but find the predictions that the U.K. will been doomed long term and will have to go back to the EU cap in hand one day to be fanciful.
I am also hopeful that we will come away with a reasonable agreement with the EU by the end of the two years but worry that politics could scupper that.
Markets know a50 will be triggered so there wont be any surprise when it is
If its not intentionally misleading, you lack some very basic understanding on how economies work.
Sigh.
As others have deconstructed this laughable post already, I will just add something to this sentence:
"As most of Germany's exports are high quality / high value hard products, not services, then I wonder how may other EU countries can afford to buy all those expensive ( and desirable ) cars and machine tools to make up for the reduced sales to the UK ?"
Do you think before you write something?
You just said it yourself, those are high quality products. Who will buy them if you leave without a deal? You. Just that it becomes more expensive.
The biggest strenght of the German economy and trade is that most of the goods are irreplacable.
You really think someone will buy a Jag instead?
They won't. You know why? In Jaguar's bracket, the biggest sales driver are company cars. Those companies are looking for resale value. The resale value of German cars is higher. They will continue to buy how they buy.
There is very little the UK can't manifacture themselves? True. Thing is, the UK doesn't produce anything anymore. You have decidied to have a service/baking economy. Especially the latter is very vulnerable to new EU regulations, while it is, in reality, impossible to just stomp whole industries out of the ground. Most of the knowlegde needed for those industries is long lost in the UK and won't ever come back.
You really have lost your sense for reality. Or, you really don't know better.
Probably the latter.
See guys, this is how we ended up with Brexit.
Well done with the trolling, good effort but a bit over egged.
If its not intentionally misleading, you lack some very basic understanding on how economies work.
Sigh.
As others have deconstructed this laughable post already, I will just add something to this sentence:
"As most of Germany's exports are high quality / high value hard products, not services, then I wonder how may other EU countries can afford to buy all those expensive ( and desirable ) cars and machine tools to make up for the reduced sales to the UK ?"
Do you think before you write something?
You just said it yourself, those are high quality products. Who will buy them if you leave without a deal? You. Just that it becomes more expensive.
The biggest strenght of the German economy and trade is that most of the goods are irreplacable.
You really think someone will buy a Jag instead?
They won't. You know why? In Jaguar's bracket, the biggest sales driver are company cars. Those companies are looking for resale value. The resale value of German cars is higher. They will continue to buy how they buy.
There is very little the UK can't manifacture themselves? True. Thing is, the UK doesn't produce anything anymore. You have decidied to have a service/baking economy. Especially the latter is very vulnerable to new EU regulations, while it is, in reality, impossible to just stomp whole industries out of the ground. Most of the knowlegde needed for those industries is long lost in the UK and won't ever come back.
You really have lost your sense for reality. Or, you really don't know better.
Probably the latter.
See guys, this is how we ended up with Brexit.
No the biggest strength the German economy has is its production is undervalued by being in the Euro rather than the Mark.
If the EU takes this attitude then we are going to have to find out which will be sad for all parties.
German car sales to the UK are worth 30 billion Euros per year. You can shut your eyes and pretend that doesn't matter, that whatever is done to the UK sales into Europe the UK will still buy BMW's because they are irreplaceable. I think that is nonsense. We buy BMW's because we want to and we will stop if we want to. The quickest way to force that change in thinking is to go about things the way you are suggesting in just about all your posts and that is by taking the customer for granted.
The tarrifs introduced will be rather low since the UK has to export cars into the EU as well. So, yeah, there might be small drop. But all in all, VW sells twice the cars in China per month then it does in the UK per year. Just to put it into perspective.
The simple point here is that the EU has the better (bigger) cards. It's as simple as that and people need to understand that.
It's not trolling. It's breaking down simple truths.
See I'd a tight wad but I've never managed to come across a Malbec that didn't taste like cough medicene. But anyway if European wines face tarrifs the Argie companies can put up prices as they get more demand for their wines.
This isn't true unless you want prices to quadrupple or more in some cases. I run a nutritional supplement company. Most nutrients can't be bought in Europe and next to none are manufactured in the UK. The ingredients manufactured in the EU cost multiple times what Chinese suppliers sell for.
Now that's just my example, but there's countless examples of hyper inflation that could happen without free trade.
I saw a casestudy of 1 family owned car manufacturer (bespoke stuff), that bought most of their parts in the EU and sold most of their parts in the EU. They will get doubly hit by paying more for parts and selling less because of import duties. They'll probably go under, as many businesses will.
Your balance of payment equation ignores exports and ignores inflation for businesses and consumers. Busienss inflation reduces
Ask yourself when Britain stopped being an impoverished nation and became rich and why. It was when we embraced global trade.
Big business could simply move to EU countries, that's the huge danger for Britain.
You paint a wonderful picture of rich britain in the eu, lets hope that those not feeling your joy and wealth can get something in the next 2 years before they really start not feeling the benefits.
This just isn't true though... If it were true, why is the UK so fixated on having a 'strong' pound? A stronger currency would simply reduce the numbers in a global economy... There is almost nothing produced in Germany that wasn't sourced somewhere else first. In my opinion it's not just wrong to claim, it's used deliberately as a piece of propaganda.
Your thoughts and experiences...My thoughts and experiences below.
Argentinian Malbec - wish I could find cough syrup which tastes as good, but each to his own, etc. Sure they might put their price up, but unless Chile, USA, Sth Africa, Australia and NZ do so as well, then that'd be economic suicide and so no tears shed for them if they do.
No too sure I understand what the problem is with your supplements. You will still be able to buy from China or pay four times as much buying from the EU after BREXIT, no ?
The car company you mention is no different to lots of similar, smaller companies in the EU, who will pay more for what they buy from the UK and will sell less to the UK because of Tariffs. Harsh, but it's the EU who will insist on tariffs - the UK would be more than happy to contnue tariff free trade.
The Balance of Payments computation - no.... no trade would 'save' the UK $43 billion at the last count. Probably more given devaluation of the £
Agreed with you about the UK's historical trading. But can I add that at the time, the UK got raw materials for virtually nothing from its Empire, and had very little competition for its exports. The UK stopped being impoverished because almost free raw materials and little competition on World Markets gave the UK a massive Balance of Payments surplus. I know it's hard to believe, but the UK was once the richest country in the world on the back of Global Trade. It won't ever be again, but with new opportunities, new impetus and real need to think Globally in order to survive and thrive, it might get better than it is now.
Finally, all Big Businesses with clout are global. They're already present inside the EU so no change there. And it's certain that some will leave the UK for their EU businesses and some will come to the UK to continue their UK businesses.
It's not just Bill....
http://www.telegraph.co.uk/business...-chief-peter-navarro-accuses-germany-abusing/
FYI - this huge march in London on Saturday will get hijacked by Trump/BrExit bashing, if anyone wants to indulge. I'm going to take photos and scream some obscenities.