Discussion
Everyone is talking about trade tariffs with the EU and how awful it will be, and they seem to average about 5%...
If I buy something from an EU country after 1 Jan, eg a pack of Spanish tomatoes, and the price includes a 5% tariff, does that tax raised go to the HMRC or to the EU? If both the UK and EU charge each other 5%, it seems to me that essentially both parties benefit as the tax take rises... so they won't have to hike other taxes so much to fill the Covid hole...
If I buy something from an EU country after 1 Jan, eg a pack of Spanish tomatoes, and the price includes a 5% tariff, does that tax raised go to the HMRC or to the EU? If both the UK and EU charge each other 5%, it seems to me that essentially both parties benefit as the tax take rises... so they won't have to hike other taxes so much to fill the Covid hole...
Simpo Two said:
Everyone is talking about trade tariffs with the EU and how awful it will be, and they seem to average about 5%...
If I buy something from an EU country after 1 Jan, eg a pack of Spanish tomatoes, and the price includes a 5% tariff, does that tax raised go to the HMRC or to the EU? If both the UK and EU charge each other 5%, it seems to me that essentially both parties benefit as the tax take rises... so they won't have to hike other taxes so much to fill the Covid hole...
Yes, but the tomatoes will cost you more, unless the farmer or someone in the supply chain absorbs the tariffs - ok with that?If I buy something from an EU country after 1 Jan, eg a pack of Spanish tomatoes, and the price includes a 5% tariff, does that tax raised go to the HMRC or to the EU? If both the UK and EU charge each other 5%, it seems to me that essentially both parties benefit as the tax take rises... so they won't have to hike other taxes so much to fill the Covid hole...
Our government will receive the tariff on imported goods.
Edit: I suppose we won't know for a while what the overall inflationary effect is.
The middle class won't mind paying X% more for their imported produce, but a few points here and there on staples could be an issue
Edit: I suppose we won't know for a while what the overall inflationary effect is.
The middle class won't mind paying X% more for their imported produce, but a few points here and there on staples could be an issue
Edited by JeffreyD on Friday 11th December 19:07
I was thinking about this earlier. BBC seemed to be pushing it as a given that prices for goods imported from the EU will go up in price.
It doesn't have to be like that, as it will be up to the UK government whether or not to impose import duty on EU goods.
I guess the only reason to impose tariffs on EU goods would be to stick it to the EU if they do it to our exports (or to raise more cash while blaming someone else)?
If it makes us eat more of what we grow/make, then it might even be sensible from an environmental viewpoint (food miles).
Different story for the automotive industry though. And financial services.
It doesn't have to be like that, as it will be up to the UK government whether or not to impose import duty on EU goods.
I guess the only reason to impose tariffs on EU goods would be to stick it to the EU if they do it to our exports (or to raise more cash while blaming someone else)?
If it makes us eat more of what we grow/make, then it might even be sensible from an environmental viewpoint (food miles).
Different story for the automotive industry though. And financial services.
abzmike said:
Yes, but the tomatoes will cost you more, unless the farmer or someone in the supply chain absorbs the tariffs - ok with that?
Absolutely. And it might encourage us to grow more of our own food rather than depend on others. Why keep Spanish farmers in business if you can keep British farmers in business?felixw said:
Depending on the mix of goods in your shopping trolley (UK vs the EU) 5% probably won't be that noticeable to be honest
Indeed. I was careless enough to engage with a rabid Remainer who banged away that we imported 60% of our food from the EU and we were all going to starve. A quick check when I got home showed it was 27%.I think the EU is quite fearful of an independent UK. They know we'll be more competitive which is why they're trying to stop it.
I’m not sure the Govt has much choice on tariffs. My understanding is that it couldn’t waive them on Spanish tomatoes without waiving them on all other tomatoes from other parts of the world. Excluding Favoured Nation status, there would have to be an FTA in place to do this?
As you say, a good way of raising revenue without increasing personal taxes.
As you say, a good way of raising revenue without increasing personal taxes.
Jockman said:
I’m not sure the Govt has much choice on tariffs. My understanding is that it couldn’t waive them on Spanish tomatoes without waiving them on all other tomatoes from other parts of the world. Excluding Favoured Nation status, there would have to be an FTA in place to do this?
Yes - we default to WTO rules.If, as has been said above, it is the UK Govt which receives the tariff - call it tax - on goods imported from the EU, then presumably it is the UK Govt which imposes that tax, not the EU. If so then the UK Govt is simply - as is the case with all other taxes - choosing how much to tax its own people and on what goods. Could it not say 'Actually we won't tax goods from the EU' - and its current tax take remains the same?
The common-held belief seems to be that tariffs are punishment from one country to another; to me they seem entirely self-inflicted, but of course can reduce imports due to higher cost. Protectionism vs international competition; I can see a role for both.
The common-held belief seems to be that tariffs are punishment from one country to another; to me they seem entirely self-inflicted, but of course can reduce imports due to higher cost. Protectionism vs international competition; I can see a role for both.
Simpo Two said:
If, as has been said above, it is the UK Govt which receives the tariff - call it tax - on goods imported from the EU, then presumably it is the UK Govt which imposes that tax, not the EU. If so then the UK Govt is simply - as is the case with all other taxes - choosing how much to tax its own people and on what goods. Could it not say 'Actually we won't tax goods from the EU' - and its current tax take remains the same?
The common-held belief seems to be that tariffs are punishment from one country to another; to me they seem entirely self-inflicted, but of course can reduce imports due to higher cost. Protectionism vs international competition; I can see a role for both.
The UK has already published its import tariffs.The common-held belief seems to be that tariffs are punishment from one country to another; to me they seem entirely self-inflicted, but of course can reduce imports due to higher cost. Protectionism vs international competition; I can see a role for both.
Under WTO rules these must be imposed fairly on all imports where a FTA or tariff free quota does not exist.
Stay in Bed Instead said:
The UK has already published its import tariffs.
Under WTO rules these must be imposed fairly on all imports where a FTA or tariff free quota does not exist.
You do wonder if people deliberately misunderstand the way things are.Under WTO rules these must be imposed fairly on all imports where a FTA or tariff free quota does not exist.
We've had years to work all this out.
JeffreyD said:
We've had years to work all this out.
Yes but nobody knew what the 'deal' with the EU was going to be until now/very soon.Global economics not being my degree subject, when and why did all countries seemingly sign up to the WTO in the first place? What happens if you don't?
Simpo Two said:
Yes but nobody knew what the 'deal' with the EU was going to be until now/very soon.
Global economics not being my degree subject, when and why did all countries seemingly sign up to the WTO in the first place? What happens if you don't?
We knew we were becoming a "third country" when we set our red lines. This was further reinforced at the last general election. The Tories secured a strong majority with these red lines as the mainstay of their manifesto. This is what people voted for. Global economics not being my degree subject, when and why did all countries seemingly sign up to the WTO in the first place? What happens if you don't?
In terms of when and why, there has been a general attempt to regulate trading since the end of WW2. Probably because we were all fatigued with the efforts of killing each other in an attempt to secure advantage.
If you don't sign up to it I'd have thought you end up like North Korea or similar.
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