The economic consequences of Brexit (Vol 2)

[Blue Oval84]

Liokault said:

Am I missing something in that report? They say that imported cars will increase in price by £1500 but they imply that this threatens the 750k auto industry jobs in the UK.

How is a price increase on imports not great for the domestic market (I type this from BMW Munich, as a lifer long automotive guy).

Are the SMMT not more concerned about tariffs and non-tariff barriers disrupting their delicate supply chains? Components whizz back and forth from UK to rEU and back again throughout the manufacturing process. Disruption to this process (even if tariffs aren't imposed) could be seriously problematic.

[Liokault]

Blue Oval84 said:

Liokault said:

Am I missing something in that report? They say that imported cars will increase in price by £1500 but they imply that this threatens the 750k auto industry jobs in the UK.

How is a price increase on imports not great for the domestic market (I type this from BMW Munich, as a lifer long automotive guy).

Are the SMMT not more concerned about tariffs and non-tariff barriers disrupting their delicate supply chains? Components whizz back and forth from UK to rEU and back again throughout the manufacturing process. Disruption to this process (even if tariffs aren't imposed) could be seriously problematic.

This is what I do for a living. I buy parts for my OEM from all over the world, USA, Japan, Mexico....why would EU borders be more confusing than buying explosives (airbags) from Mexico, via the US and Romans?


The red tape will increase, but the opportunity for business within the UK will massively outweigh that. What we are seeing is the pain of OEM's that have made a lot of money by outsourcing work from the UK and then importing product back.

[Murph7355]

Liokault said:

This is what I do for a living. I buy parts for my OEM from all over the world, USA, Japan, Mexico....why would EU borders be more confusing than buying explosives (airbags) from Mexico, via the US and Romans?

The red tape will increase, but the opportunity for business within the UK will massively outweigh that. What we are seeing is the pain of OEM's that have made a lot of money by outsourcing work from the UK and then importing product back.

Ah yes, but you don't understand the details of how complicated this all is. You should go and read Dr North's views on it all.

We are doomed. Trade with the EU will fall to zero and there's no way on God's earth we will ever be able to make that up with Row.

()

As a related aside, from a sustainability point of view, and an economic and supply chain one, I find it bizarre that it's effective for a single component to make multiple thousand mile journeys across several plants before it becomes a final product.

[Liokault]

Murph7355 said:

I find it bizarre that it's effective for a single component to make multiple thousand mile journeys across several plants before it becomes a final product.

As do I. In my example of Mexico > USA > Romania > UK, The USA and Romania add zero to the product. All processing and packaging is done in Mexico (with the largerst sub component comming from Vietnam), but for some reason the supplier chooses this supply route. I can only assume its for tax reasons.

[Carl_Manchester]

My reading of the Queen's speech notes are that we are leaving the EU customs union.

https://www.gov.uk/government/uploads/system/uploa...

[loafer123]

Carl_Manchester said:

My reading of the Queen's speech notes are that we are leaving the EU customs union.

https://www.gov.uk/government/uploads/system/uploa...

It is somewhat surprising that you weren't aware of that, given both sides stated it explicitly on the first day of negotiations in Brussels on Monday.

[Mrr T]

loafer123 said:

Carl_Manchester said:

My reading of the Queen's speech notes are that we are leaving the EU customs union.

https://www.gov.uk/government/uploads/system/uploa...

It is somewhat surprising that you weren't aware of that, given both sides stated it explicitly on the first day of negotiations in Brussels on Monday.

Will the DUP vote for a Queens speah which implies border control in Ireland?

[turbobloke]

Mrr T said:

loafer123 said:

Carl_Manchester said:

My reading of the Queen's speech notes are that we are leaving the EU customs union.

https://www.gov.uk/government/uploads/system/uploa...

It is somewhat surprising that you weren't aware of that, given both sides stated it explicitly on the first day of negotiations in Brussels on Monday.

Will the DUP vote for a Queens speah which implies border control in Ireland?

http://ukandeu.ac.uk/explainers/the-customs-union/

[anonymous-user]

So this seems like a genuinely big problem with limited prospects of a successful solution.

https://www.theguardian.com/business/2017/may/02/n...

[andy_s]

Greg66 said:

So this seems like a genuinely big problem with limited prospects of a successful solution.

https://www.theguardian.com/business/2017/may/02/n...

Shame we were so short sighted as to lose the primacy in nuclear we had in the fifties along with nailing the coffin shut in the nineties.

[FiF]

Personally I still reckon that a transitional deal will be the result. Setting aside all the grandstanding from various factions, for and against, Uk and EU, public and politicians, there apoears to be a significant majority in favour of a transitional deal of some sort, detail to emerge during negotiations, particularly a majority in parliament, allegedly.

http://www.telegraph.co.uk/news/2017/06/21/whisper...

[andy_s]

FiF said:

Personally I still reckon that a transitional deal will be the result. Setting aside all the grandstanding from various factions, for and against, Uk and EU, public and politicians, there apoears to be a significant majority in favour of a transitional deal of some sort, detail to emerge during negotiations, particularly a majority in parliament, allegedly.

http://www.telegraph.co.uk/news/2017/06/21/whisper...

Hopefully money will talk louder than politicians on both sides, hopefully no one is going to cut their nose to spite their face and hopefully a pragmatic solution (Prag-Brexit? Trans-Brexit?) can be eased in that benefits the country in the longer term.

[KrissKross]

///ajd said:

Yes, yes,

[London424]

News from CBI.

https://twitter.com/cbi_economics/status/877828514...

[PurpleMoonlight]

London424 said:

News from CBI.

https://twitter.com/cbi_economics/status/877828514...

Possibly:

We haven't left yet.

The £ is cheap.

Business are hedging against possible tariffs and buying now while its cheap and we haven't left.

[anonymous-user]

PurpleMoonlight said:

London424 said:

News from CBI.

https://twitter.com/cbi_economics/status/877828514...

Possibly:

We haven't left yet.

The £ is cheap.

Business are hedging against possible tariffs and buying now while its cheap and we haven't left.

You're saying that EU businesses are buying forward in anticipation of the tariffs that will be imposed on them by the EU's stance should negotiations not prove successful?

I'm not saying you're wrong but if you are right they don't have much faith in their 'leaders' do they?

[Mrr T]

turbobloke said:

Mrr T said:

loafer123 said:

Carl_Manchester said:

My reading of the Queen's speech notes are that we are leaving the EU customs union.

https://www.gov.uk/government/uploads/system/uploa...

It is somewhat surprising that you weren't aware of that, given both sides stated it explicitly on the first day of negotiations in Brussels on Monday.

Will the DUP vote for a Queens speah which implies border control in Ireland?

http://ukandeu.ac.uk/explainers/the-customs-union/

Some times when you read a bit of opinion like that its almost amusing. Like something they dashed off in the lunch break with no research.

Let me help you with this. France and Spain are both in the SM and the CU and there are no customs checks between them. France is in the SM and CU but the US is not so there are customs checks. Norway is in the SM and not the CU so there are customs checks.

Do you get it now? The CU is not just about the external borders it’s about internal borders. So if the UK leaves the CU and Eire does not Eire must put in place a customs border

[jjlynn27]

REALIST123 said:

You're saying that EU businesses are buying forward in anticipation of the tariffs that will be imposed on them by the EU's stance should negotiations not prove successful?

I'm not saying you're wrong but if you are right they don't have much faith in their 'leaders' do they?

Do you have much faith in your 'leaders'? DD who until recently couldn't figure out that he can't negotiate with specific countries? The 'strong and stable' May?

EU businesses are buying stuff for the same reason we are still buying from the EU, as nothing has changed yet, apart from fx rate. Not sure why would those figures be surprising to anyone.

[Murph7355]

andy_s said:

Hopefully money will talk louder than politicians on both sides, hopefully no one is going to cut their nose to spite their face and hopefully a pragmatic solution (Prag-Brexit? Trans-Brexit?) can be eased in that benefits the country in the longer term.

Nationally no one will be any the wiser.

Predictions are for a drop in growth, not outright poverty overnight (that argument was tried last June and proven to be silly).

It will be impossible to calculate the absolute effect. But at least that gives all of us the chance to continue these threads for the next 20yrs.

[wl606]

Pound deemed riskier than the Euro - http://www.reuters.com/article/us-britain-sterling...