Liam Fox is supposed to be our International Trade Secretary but he doesn't seem to understand the basics of foreign trade or even ordinary business. He has told the BBC that, "If we got no agreement with the European Union that would be very harmful to European trade too. European businesses would have to pay tariffs to access the UK’s market, possibly to the tune of as much as 14 billion pounds a year" (HERE).
Think about this. You are a German company supplying cars into the UK - let's say BMW or Mercedes or Porsche. These are top quality products that are "pulled" into the UK market because of the cachet they have for certain people. Many if not most of them will continue to buy those cars after Brexit with or without tariffs.
When the invoice is made out to the customer, along with shipping costs, vehicle registration and VAT there will be another item - Tariff, about 10%. Who will pay the tariff? OK Mercedes or BMW or Porsche may send the tariff to HMRC but be in no doubt, the UK customer will pay it. Will the customer be happy to see 10% of his car's price paid to HMRC? Probably not. Unless he's a Brexiteer of course in which case I assume he will be delighted.
Fox says, "That is quite a big business tax to apply to European businesses. It is everyone’s interest that we reach an agreement and do it as quickly as possible".
No, Mr Fox, European Business will not pay the £14 billion in tariffs, we will you idiot! The amazing thing is that neither the BBC or Reuters questioned Fox's assertion. Really, very troubling.
There might be fewer German cars sold but they won't be sold at a loss and Jaguar in the UK might benefit. We will have shot ourselves in the foot.
