May's speech

[tomtomagain]

The import tax will be received by the Government and paid by the UK buyer - that's me and you, not the EU company importing the goods.

The import tax will be received by the Government but is paid for by the importer, which is usually a company ( but can be an individual, as anyone who has bought stuff from outside the EU and had to pay for it to clear customs knows ).

Whether the "Importer" chooses to pass on the cost of the goods to the end consumer is up to the circumstances of that particular importer and the goods he is trying to sell.

Broadly he has the following choices:

• Pass on the full cost of the duties - at a risk of losing market share to others
• Absorb some of the cost - pass on a partial increase
• Source alternative goods from countries which won't attract import duties
• Source goods locally

A lot of it comes down to how competitive that market is for that particular item.

So for example if we end up putting a quid on a bottle of French red wine the importer ( Tesco ) can either pass all of that on, pass some of it on, or buy a shipment from Australia and promote that instead.

The end consumer has a choice:

• Buy the goods at an increased cost.
• Buy a cheaper alternative.
• Don't buy the goods at all.

And the government has choices too depending on what it's political priorities are.

For example it could fund public services or cut the general personal tax rate or cut corporation tax or provide tax breaks for exporters or provide tax breaks for local manufacturers.

My point is that although all taxes are "bad" ( in that they depress economic activity ) it does not mean that the importer, the consumer or the government is helpless.

Choices can be made to changes in any given situation and appropriate responses taken.

[GB9]

C'mon, lighten up...




Brexit open border plan is 'an illusion' and 'unrealistic'- say key figures - Independent.ie

Are these the people who are happy? Looks like they are trying to contain their anger.

[woohoo]

I have no idea what was going on with the Liberation but I like it.

[WTFH]

And importers buying in steel to export their cars?
Manufacturing has to buy components and raw materials from somewhere. Mostly in the UK that is from abroad.

[chopper]

And importers buying in steel to export their cars?
Manufacturing has to buy components and raw materials from somewhere. Mostly in the UK that is from abroad.

Because an overly strong GBP made it cheaper to import from abroad than to make it here.

[WTFH]

Because an overly strong GBP made it cheaper to import from abroad than to make it here.

In the past, but if, as is being suggested in this thread, there will be Turriff's put on imports, then the manufacturing industry will be paying more, meaning the products will cost more, not just to the local market but also to export.

[chopper]

The thing with free trade with the EU is that we have to pay them an extraordinarily large sum of money in order for people importing our stuff to have to not pay tariffs on them, and for our importers to not pay tariffs on the things we import.

Surely if British importers had to pay tariffs on things we imported, that would provide more money to the treasury in order to give Corporation Tax breaks on the things we export in order to allow our exporters to reduce prices to offset the import tariffs that the buyers of our stuff would have to pay to their respective governments?

Zero sum game.

It isn't really tariff free trade between Britain and the rest of the EU, if HMG is having to pay huge swathes of cash to the EU in order to get it.

[WTFH]

Surely if British importers had to pay tariffs on things we imported, that would provide more money to the treasury in order to give Corporation Tax breaks on the things we export in order to allow our exporters to reduce prices to offset the import tariffs that the buyers of our stuff would have to pay to their respective governments?

Zero sum game.

It's only a zero sum game if:
1. The government provides the tax breaks after receiving the money in.
2. The tax breaks are applied fairly to the exporters
3. The tax breaks equal the tariffs imposed by the countries the exports are going to
4. The companies choose to pass the tax breaks on.

1 won't happen, neither will 2, and 4 is a business decision. Let's look at 3...
(For those of you who are mathematically challenged or cannot understand logic, look away now and think about

The cost of raw materials to build a car is 30-50% of the car's overall cost.
Let's imagine that the import tariff is 5%, and the country we are exporting to are also imposing a 5% tariff. Also, let's imagine that all the raw materials are imported.
A £20,000 car would have £10,000 of raw materials, which would give HMG a £500 tariff.
A £20,000 car sold to export would have a £1,000 tariff on it.

500-1000 = -500

It's not a zero sum game.

[tomtomagain]

And importers buying in steel to export their cars?
Manufacturing has to buy components and raw materials from somewhere. Mostly in the UK that is from abroad.

Of course this is true.

However, if one group of countries imposes a tariff on you, then as a good business-person you seek out opportunities elsewhere.

Get a trade deal with Australia and countries in Africa and South America - I'm sure they'd be happy to export their raw materials our way ( none of which are in the EU at the moment, so I guess that would mean we are either paying tariffs today on their stuff that we could choose not to, or there are no tariffs in place. )

Buy components cheaper from China, Korea, Japan ( none of which are in the EU at the moment ).

Or, heaven forbid ..... start the long overdue "Rebalancing" of the economy from consuming to manufacturing. You know? That thing, that everyone says is really important to do! This is the ideal opportunity to actually start doing it!

All countries need a reboot every hundred years or so. Normally they require a catastrophic war as in impetus to change. BREXIT gives us the chance do to so without the bloodshed.

I can understand why the Remoaners don't want change. People don't like change in general, I know it's a little bit scary. Some of them did well out of the staus-quo - but unfortunately for a lot of UK citizens those benefits did not accrue to them.

However don't blow it out of all proportion. It's not like the whole of the UK is going to collapse and we'll be begging the EU to let us pay them £12B a year to rejoin.

[AtW]

I have no idea what was going on with the Liberation but I like it.

You will like it even better once they start floggings until the morale improves