Brexit Bungle

[Dill]

(12-13-2018, 12:31 AM)Nebuchadnezzar Wrote: Great Britain will then be free to open negotiations with the rest of the world and I'm thinking the United States will absorb Great Britains imports, increase exports to Great Britain and maybe even slow trade with the EU. Could you imagine what that could do to Ikea alone? 

The "rest of the world" across oceans and continents? I'm pretty sure Britain is already free to "open negotiations" with them.  Will they import US canned food and beef with no GMO labeling?

Imagine you own and operate a shoe factory in Ashford. You're an hour from Dover, and the ferry from there is an hour to Calais. You can truck a semi loaded with shoes to the Continent pretty easily. Leave earlly, be in Paris by 2 pm. And no tariffs.  Buy a load of leather the next day and drive it back to Ashford by 6 pm.

Post Brexit maybe you've got some tariffs. Paying those is still probably cheaper than trying to ship that semi load to the US or Russia or China. And that is the extent of your "world trade." Profits down.  Wages down too?

Or take a step up. Suppose you are a car maker. You already have your products on the world market, selling your minis or Land Rovers or whatever in the U.S. and South Africa and Brazil. But France and Germany and Italy are serious markets.  You've still got them, probably, but with the same tariffs non-EU members pay--10%.  Profits down. It might even make sense to offshore some production. Relocate headquarters?  Jobs gone? (Wild card here would Trump's threat to raise tariffs on EU cars to 20% last summer. That is pushing European countries work up lower tariffs plurilaterally for world wide car imports.)

Scotland is chock full of remainers. Suppose it rethinks its Union with Britain because it wants to stay in the EU. Hammer blow to "Great" Britain, now just England, Wales and Northern Ireland. And tariffs on goods shipped to Scotland now too?

Would IKEA pay tariffs to ship to Great Britain?  Don't see why they would ship fewer goods to the U.S. because of British tariffs.

Fewer Polish dentists in London though.  Fewer Poles everywhere in GB. Britain for the British.

Just my ruminations on market forces and the possible consequences of Brexit.