Wednesday 31 March 2021

The UK is finding Brexit is a lonely place

The Biden administration has threatened to impose tariffs of up to 25% on a range of British goods in retaliation for Sunak imposing a  2% tax on the revenues - not profits - of search engines, social media companies and online marketplaces which provide services to UK users. Brought in last April it is expected to raise £300 million this year.  Recently Biden issued a communique after speaking with Taoiseach Martin which included a reference to all parties complying with the Good Friday Agreement.

Liz Truss is still pushing for a trade deal with the USA, which will undoubtedly demand access to the UK market for its massive agri-food sector with lower standards of quality and animal welfare.

US Secretary of State Antony Blinken was in the EU last week to "launch a European charm offensive on his first official trip to Brussels on Tuesday, looking to rebuild ties with NATO allies and the EU."  He seems to have bypassed London altogether.

I mention these things because they come as Brexit continues to damage our relationship with the EU and The Telegraph has an article;  Brussels tries to freeze UK out of quantum and space projects. This is about our associate membership of the flagship Horizon Europe research programme after Brexit which was negotiated after Brexit. The European Commission only wants EU members to be able to participate in the sensitive sectors and The Telegraph is bellyaching about it.

We are still waiting decisions on the TCA (not ratified yet by the European parliament), equivalence for financial services and on data adequacy. Plus imports are pouring in from Europe as the ONS announce the trade deficit with the EU for  Q4 last year widened to £22.8 billion.  Meanwhile our exports face huge self-imposed barriers. Expect it to widen even further in Q1 2021.

At the same time Raab is goading Beijing over the plight of the Uighurs as Liz Truss calls on members of the WTO to "get tough: with China:

There is a pattern developing here which is starting to point to Britain's future place in the world being powerless against the three major trading blocs and forced to accept their demands in the face of the overwhelming economic power that they wield.  Each is the gatekeeper to its own market, access to which we will need if we are to see any benefits at all from Brexit - ever.  India will soon join them.

Britain will soon be seen as a sort of Jack Russel of the international community, a nation which makes a lot of noise and barks a lot but has no real power or influence and becomes regarded as a soft touch when push comes to shove. Newspapers on the right will rail against it and present the UK as being trodden on to build up a sense of resentment against these powerful interests but it won't make any difference.  Brexit is a lonely place.

Finally, I see the latest polling on the WhatUKthinks series asking if in hindsight Britain was right or wrong to vote to leave the EU is showing the two sides now neck and neck at 44% each. This is, I assume, the vaccination story but it's troubling that government propaganda seems to be doing its job. The graph looks like this at the moment:


You can see how the gap has narrowed since mid-February:


However, we are in it for the long term and I still expect the economic penny will drop sooner or later -  although it looks like it might be later.