May's speech

[sal]

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.

Lets use your Tesco/French wine example:

• Pass on the full cost of the duties - at a risk of losing market share to others - Government receives full import tax, paid by the customer.
• Absorb some of the cost - pass on a partial increase - Government receives 50% of the import tax paid by the customer and another 50% paid by Tesco, tesco offsets it's 50% import tax cutting it's CT bill and cuts some jobs to make up the lost profit to appease the shareholders.
• Source alternative goods from countries which won't attract import duties - Source French wine from where?
• Source goods locally - when did UK start producing French wine?

As for the end customer choice it will soon be "rice or chips" after paying the rent/mortgage + train ticket.

The end result is that the UK public will bear the majority of the burden of any potential import tariffs

If you think that the big importers are going to absorb much if any of the import tariffs cost, you need to get off the kool-aid.

[DaveB]

As for the end customer choice it will soon be "rice or chips" after paying the rent/mortgage + train ticket.

The end result is that the UK public will bear the majority of the burden of any potential import tariffs

If you think that the big importers are going to absorb much if any of the import tariffs cost, you need to get off the kool-aid.

Nope, just chips. Rice is imported.

[sal]

Nope, just chips. Rice is imported.

India and US are among the top rice exporters, I thought that the free trade with them was a "done deal" no?

[tomtomagain]

Well red wine is quite simple.

I'd buy it from Australia, New Zealand, Chile or the US.

If I wanted desperately to have "French" Red wine, then I'd be prepared to pay extra for it - but being a savvy shopper, I'd try the "New World" alternatives first. And once I had discovered one I liked, I might never switch back.

Tesco, tesco offsets it's 50% import tax cutting it's CT bill

I think you'll find that you cannot "Offset" one tax against another. That's not how taxation works ... the government is pretty clear on that. Nor can you off-set fines.

As for the end customer choice it will soon be "rice or chips" after paying the rent/mortgage + train ticket.

Well I don't have mortgage, nor do I travel on the train. And I actually like rice and chips ( not at the same time ).

You have a very negative outlook. You'll be unable to see the opportunities as they arise and take advantage of them. Nevermind.

[WTFH]

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!

To do that the government needs to invest in education, then in 10-15 years time the country will start to see benefits. By which time the current crop of politicians will be retired on their massive pensions.
But the government's current plans are not to educate children in skills, but to spend as little as possible yet wanting more from the educators.

Bring back polytechnics, bring back student grants, not loans. Instead of having universities selling off places to foreigners, make sure all the locals get offered first.

...and that costs money. It doesn't give a quick return so modern investors are not interested. They want quick returns, forget long term benefits.

[darmstadt]

Well red wine is quite simple.

I'd buy it from Australia, New Zealand, Chile or the US.

Trade agreements with these countries would first have to be settled

[tomtomagain]

Trade agreements with these countries would first have to be settled

Really? I can buy wine today from all of them.

At a comparable price to the French stuff.

[tomtomagain]

To do that the government needs to invest in education, then in 10-15 years time the country will start to see benefits. By which time the current crop of politicians will be retired on their massive pensions.

I agree. Doesn't matter how long it takes. It needs to be done.

[CoolCat]

I quite like Ms Mays outfit though, I had not realised she was such a big Bay City Rollers fan

[AtW]

India and US are among the top rice exporters, I thought that the free trade with them was a "done deal" no?

Free trade does not mean there are no tariffs on anything!!!