Future trading relationship UK & EU

[odysseus2000]

Interesting press conference with May and Trump:

https://twitter.com/realDonaldTrump/sta ... 6470649857

All in all May comes over very well, some of the best I have seen of her.

Regards,

[RececaDron]

If this was his aim he would be happy with the status quo and enhancing it by asking nations to reduce their defence spending and to continue with a European Union that has gone from a market of equals to political marriage dominated by Germany at the expense of all others.

It was obvious that in my references to Trump desiring to weaken other nations that I was discussing trading relationships - as in the actual thread title - not their military standing.

There's little point in you responding to points that others haven't actually made, as it renders discussion impossible.

Trump's mano-a-mano business background appears to have strongly engendered in him a view of there being a fixed size commercial pie, where the more powerful side gets the (much) bigger slice, a concept he's then misapplied to the global economy as a whole.

Hence his desire to separate other nations from the protective groups they'd collectively formed, in order that he can bring his nation's strength to bear on them individually in order to secure trade terms preferential to the status quo.

He gains, they lose, in a one-to-one power battle. His entire MO.

[odysseus2000]

RececaDron
It was obvious that in my references to Trump desiring to weaken other nations that I was discussing trading relationships - as in the actual thread title - not their military standing.

There's little point in you responding to points that others haven't actually made, as it renders discussion impossible.

Trump's mano-a-mano business background appears to have strongly engendered in him a view of there being a fixed size commercial pie, where the more powerful side gets the (much) bigger slice, a concept he's then misapplied to the global economy as a whole.

Hence his desire to separate other nations from the protective groups they'd collectively formed, in order that he can bring his nation's strength to bear on them individually in order to secure trade terms preferential to the status quo.

He gains, they lose, in a one-to-one power battle. His entire MO.

Yes, but the two are not orthogonal.

If US policy was just about making the US financially stronger then one could see the logic of your argument.

But US policy is about having strong allies to combat what it sees as the enemies: Russia and China.

US policy is to create a strong unified force of the western capitalist nations to deter either enemy while at the same time maintaining its own economic strength by having a system of tariffs that are fair to both nations.

As things now stand US business have substantially larger tariffs to pay than do Chinese and European nations and others exporting to the US. US policy is to make the tariffs more balanced.

This is not just an academic exercise as tariffs pay for a lot of government spending and if tariffs are brought down as is the aim of current negotiations then other sources of income will have to be found. Hence there is a huge reluctance in Brussels, Beijing... to any change in tariffs. The US has a lot to gain from more equal tariffs, nations who have benefitted from tariffs to fund their government spending have a lot to lose as do industries within these nations that have benefitted from high tariffs keeping US products out and low US tariffs allowing them to sell more stuff in US markets.

If tariffs become more equal you can expect to see business that have benefitted from tariffs reporting reduced profits and those that have been hurt by high tariffs doing better.

In investment terms this implies that US equities will do well whereas European and Chinese ones will suffer. One has already seen e.g. falls in the Chinese market as the tariff talk has got louder and gains in the US market.

Which ever way you look at this, tariffs are a big component of global trade and setting them to be more equal is a big thing which will be resisted by those that benefit from the current ones and championed by those that lose and we could end up in some serious trade wars that will cause a lot of trouble as they did in the 1930's. Or leaders will accept that change is needed and adjust accordingly which likely means new taxes to restore government income lost to reduced tariffs, perhaps offset by increased trade and employment opportunities.

Regards,

[PeterGray]

As things now stand US business have substantially larger tariffs to pay than do Chinese and European nations and others exporting to the US. US policy is to make the tariffs more balanced.

Useful BBC fact check here on relative tariffs: https://www.bbc.co.uk/news/world-44438908

In short, yes US tariffs are a bit less in general that EU ones, but there are big variations and when you look at averages the differences are not "substantially larger". A lot of the trade imbalance that Trump complains about results from issues such as many Americans much preferring to buy European cars if they can. Trying to resolve issues like by bullying or playing with tariffs isn't going to work.

Peter

[BobbyD]

Yes, but the two are not orthogonal.

If US policy was just about making the US financially stronger then one could see the logic of your argument.

But US policy is about having strong allies to combat what it sees as the enemies: Russia and China.

US policy is to create a strong unified force of the western capitalist nations to deter either enemy while at the same time maintaining its own economic strength by having a system of tariffs that are fair to both nations.

That would explain why trump has paralysed the selection process for new members of the WTO Appellate body meaning the WTO will be unable to adjudicate on any case after Dec 10th next year, supported Brexit, offered Macron a trade deal to leave the EU, and sought to reduce NATO to a bickering wreck...

Trump is a bigger threat to rules based international cooperation than Putin and Xi put together, his interests aren't opposed to those of Putin's Russia, they are aligned with it.

[ManInTheStreet]

Postby odysseus2000 » July 15th, 2018, 10:59 am

Which ever way you look at this, tariffs are a big component of global trade and setting them to be more equal is a big thing which will be resisted by those that benefit from the current ones and championed by those that lose and we could end up in some serious trade wars that will cause a lot of trouble as they did in the 1930's. Or leaders will accept that change is needed and adjust accordingly which likely means new taxes to restore government income lost to reduced tariffs, perhaps offset by increased trade and employment opportunities.

GATT, and its successor WTO, have successfully reduced tariffs. The average tariff levels for the major GATT participants were about 22% in 1947, but were 5% after the Uruguay Round in 1999.[2] Experts attribute part of these tariff changes to GATT and the WTO.[3][4][5]

https://en.wikipedia.org/wiki/General_A ... _and_Trade

[ManInTheStreet]

#152204 Postby odysseus2000 » July 13th, 2018, 3:03 pm

Meanwhile he has (maybe had now) secured more US food going to China with its circa billion population that is a much bigger market than the UK.

Access to the Black Sea, Sea of Azov, and the Danube river have grabbed Beijing’s attention as they plan the maritime aspect of their Belt and Road trade and transportation initiative to more easily transport Chinese goods around the world.

Ukraine’s position as a transport corridor linking east and west with 170,000 kilometers of road and 22,000 kilometers of interconnected railway – although much is in need of repairs – represents a chance to dramatically decrease transport times for trillions of dollars worth of Chinese goods headed west. The new free trade agreement with the European Union makes it a perfect and logical transport corridor to the world’s wealthiest consumer market.

But hungry China also needs access to the world’s farms and Ukraine’s growing agriculture sector will soon have the capacity to feed 800 million people, according to experts. This year, Ukraine has already overtaken the United States as China’s biggest corn supplier as total bilateral trade passes $7.6 billion.
https://thediplomat.com/2018/06/ukraine ... nt-muscle/