@JohnRawls, thanks for the quantitative analysis. Now to the qualitative analysis. If tariffs are introduced, that doesn't mean that trade comes to an end. A 10% tariff on cars will make the price for consumer higher, but most manufactures, especially high value manufacturers, will manage. They will adjust their costing accordingly. Even if sales dip a bit it won't be a catastrophe.
So exports will manage. What will suffer is the international supply chains. And non-tariff barriers will have a greater impact in this than tariffs. This will force many companies to redirect their investments. Since the EU market is bigger than the UK market, the relocation of business will be primarily from the UK to the EU and not vice versa.
So whatever loss the EU may experience due to Brexit may well be compensated for by investment redirected from the UK to the EU.
I have lost count of the hundreds of companies that have announced their plans to relocate out off the UK. Nissan, Ford and Airbus are just the latest examples.
Ford has become the latest carmaker to sound the alarm over Brexit, saying that it is stepping up preparations to move production out of Britain.
The business, which has 13,000 staff in the UK, told the prime minister on a private call with business leaders that it was preparing alternative sites abroad.
The warning comes after Nissan announced last week that it was cancelling plans to build a new model in its Sunderland plant, a decision that it attributed in part to Brexit uncertainty.
During the call Theresa May confirmed reports that the government was preparing a package of financial support for businesses affected by a no-deal Brexit but declined to elaborate.
Another participant said that other companies delivered the same warning as Ford. “The general message was that this isn’t about contingencies any more — we are taking steps already because of the uncertainty. It’s real.”
Carolyn Fairbairn, head of the Confederation of British Industry, told Mrs May that a no-deal Brexit would be a “monumental act of self-harm”. “Our members are getting desperate, I feel we can’t pull our punches,” she said.
The British Chambers of Commerce (BCC) has said that businesses are being left to “hang out to dry” by Brexit uncertainty. The group, which represents 75,000 companies employing six million people, has demanded answers to 20 questions covering “fundamental aspects of how companies operate”. These include whether they will need to pay tariffs on imported goods, if they’ll be able to move skilled workers between the UK and EU after Brexit day or how trade over the Irish border will be conducted.
The BCC warned that growing uncertainties over Brexit had already had a chilling effect on the economy, stifling investment and causing some of its members to lose overseas customers.
Its bleak assessment of the economic damage being wrought by the paralysis in Westminster came as Mark Carney, governor of the Bank of England, delivered his strongest warning yet on the consequences of a no-deal Brexit. “We should not be under any illusions — no-deal Brexit would be a shock for this economy and send a signal globally about the prospects of refounding globalisation,” he said at an event in the City organised by the Financial Times.
He also said that the right Brexit deal could be the “first test of a new global order” and a possible means to “broaden the benefits of openness while enhancing democratic accountability”.
“There is a very real risk that a lack of clear, actionable information from government will leave firms, their people and their communities hung out to dry,” Adam Marshall, director-general of the BCC, said. “It is little wonder that many firms have been holding back on investment, stockpiling, and even opening offices and moving operations and jobs elsewhere. The imperative remains to avoid a messy and disorderly exit on March 29, but businesses need answers they can base decisions on, no matter the outcome. The lack of clear, precise answers is now causing real damage to many businesses, and to the wider economy.”
A spokesman for the government said that the “best way to support our economy, protects jobs and provide certainty for businesses” is to back the prime minister’s withdrawal agreement.
@Kaiserschmarrn, the UK had the greatest loss of growth. From the top of the list of OECD countries it dropped to the very bottom. The German economy is not in recession, as has been erroneously claimed, growth has been revised downward because of the international trade war, which has resulted in less demand, particularly in China.
@Ter, don't worry, the EU is indestructible.
Perhaps they should have used that at Grenfell Tower.