I think this whole debate about cars - which is one example of a broader issue - is missing an important point which I mentioned off hand a couple of days ago but want to reiterate. As we move into a far more protectionist world, where the assumption that free trade benefits both sides, which has existed for many years now, goes out the window, it will not just be about the price of your Merc or BMW going up by 20% or whatever, and will rich people still buy them. There will also be at least an element of economic nationalism, where it is seen as a duty, or at least a virtue, to buy goods manufactured in your own country. That is the whole argument behind shunning free trade.
This is more overt in the US, but I think it will become more overt here as well. All this talk about bringing jobs back to the US will generate pride in the "American made" label and it is likely to become increasingly fashionable to buy US made goods. And people will need to buy US made goods, and be happy about the fact they cost more to produce because Labour costs are higher, even if they are cheaper than, or competitive with, foreign goods that have lower labour costs but high taxes slapped on them when they are imported. In order for people to accept that new paradigm of higher prices, it will have to be sold as a virtuous thing and a price that is worth paying for repatriating jobs. And maybe it is.
The UK is in a slightly different situation but there are similarities. There has been a lot of talk about rebalancing the economy, about the need to boost manufacturing, about the fact that "we dont make anything in this country anymore." By ending our free trade arrangement the cost of imported goods from Europe will go up, that may start to make it economical to make things here again that we used to import from countries that, under the globalisation model, specialised in those industries. When I brought this up before I was talking about cars and Nissan. I can see it becoming quite fashionable to buy Nissan, or any car that is British made, which could come to be seen as patriotic, supporting UK jobs, at a time when the UK is basically in a trade war with the EU. Ditto Vauxhalls, Hondas and Toyotas. At the higher end, people who might have bought a Merc might go with a Jag, or an Aston Martin.
Otherwise what is the justification for all of this? If this is all a backlash against globalisation, what is the rational antidote to that? Bring jobs back and buy local to justify that. There is no point in bringing jobs back to the UK and paying Brits more to build things than an Asian or Eastern European or South American could do it for, unless you encourage people to buy stuff that is made locally, by creating a sense of economic nationalism. As I said this is further along in the US but I think as usual the UK will travel in the same direction and it fits in nicely with what is happening here where we are erecting barriers between ourselves and our neighbours that will make it more expensive to trade. AND, on the surface at least, it creates jobs, which is a vote winner, and serves to justify the rising prices that will come alongside it. More money for workers via more jobs, but higher prices. It remains to be seen, all things taken into account, whether that leaves people better off or not.
Obviously there are a lot of other elements to this, a lot of other forces pulling things in other directions, and it may not pan out like that at all. But I can see this happening to some extent. I just think it is worth bearing that in mind. Its not just, Mercs are 20% more expensive, but Mercs are awesome and I am rich and want people to know Im rich, so Im going to buy it anyway. Its, Mercs are more expensive but they are also German, and the Germans have treated us horribly with the whole Brexit settlement, so screw them, and screw the French and their Renaults, and the Italians and their Fiats, Im going to buy a car that was made here, in the UK, by British workers, who after all are the best in the world at operating largely automated machines. This will be encouraged from the top down in all sorts of ways.
