Brexit, for once some facts.

[Woosh]

hate to break it to you. But if we slap duty on imports from the EU, this doesn't cost the EU company anything. The import duty is paid by the UK importer, and will be added to their costs which will be passed directly to customers. It isn't charged to the EU companies at all.

I agree.
Overtime, sale of EU made products will decrease, sales of comparable products made elsewhere increase. The overall effect is that duty will cost sale.

So who's being punished??

Countries which do not enter free trade deals will ultimately be punished.
The overall effect on large exporters into the UK like Germany, France, Spain will push the EU27 to confront this problem. I guess by March 2018.

 

[KTM Bike Industries UK]

I agree.
Overtime, sale of EU made products will decrease, sales of comparable products made elsewhere increase. The overall effect is that duty will cost sale.


Countries which do not enter free trade deals will ultimately be punished.
The overall effect on large exporters into the UK like Germany, France, Spain will push the EU27 to confront this problem. I guess by March 2018.

this assumes, that price increase reduce sales. But I can't see any competition for EU built cars... or bikes or ... or .... or can you?

 

[Woosh]

this assumes, that price increase reduce sales. But I can't see any competition for EU built cars... or bikes or ... or .... or can you?

they are quasi commodities. Give it 2-3 years, the shift will be clear for all to see. You may stick to the same brand but we'll buy more cars and bikes made in Mexico and less from Germany.

 

[Kudoscycles]

hate to break it to you. But if we slap duty on imports from the EU, this doesn't cost the EU company anything. The import duty is paid by the UK importer, and will be added to their costs which will be passed directly to customers. It isn't charged to the EU companies at all.

The only possible negative for the EU companies is if the duty puts UK customers off buying EU brands. However I don't think even a 20% increase would do that... all it will do is cost UK customers more for the products they want.

So who's being punished??

Agreed....this is not understood by most Brexiters,because we buy so much from the EU they think that it is the EU businesses that have to pay the tariffs.....I explained this to a Brexiter at a show,he thought I was lying to him.
There are products that we buy from the EU that cannot be easily replaced by home grown product....cars,food etc. However much that the EU buys from us can be replaced by the EU.
I am sure that the EU will slap anti dumping tariffs on the UK,I have asked my MP but she doesn't understand what I am talking about. If they put anti dumping duties on us that will hurt,even destroy,UK manufacturers that ship lots to the EU....for example,how many folders will Brompton sell into Europe with a 55% anti dumping tariff added,it is possible to argue out of this tariff,but the EU takes years to make decisions,they are not likely to look kindly towards us,post Brexit.
KudosDave

 

[Kudoscycles]

they are quasi commodities. Give it 2-3 years, the shift will be clear for all to see. You may stick to the same brand but we'll buy more cars and bikes made in Mexico and less from Germany.

Do you mean that we will buy VW,Audi,BMW or Mercedes made in Mexico or do you mean that we will buy other brands?
KudosDave

 

[KTM Bike Industries UK]

they are quasi commodities. Give it 2-3 years, the shift will be clear for all to see. You may stick to the same brand but we'll buy more cars and bikes made in Mexico and less from Germany.

You really think a tariff of x% will make a car from Germany less attractive than a car built in Mexico, with associated shipping, admin costs and delays.

We can buy cheaper cars now, and the roads are still full of Audi / VW / BMW etc etc. Even my new Mondeo was built in Spain. Do you think an increase in my lease cost of even 25% a month would make me choose a mexian car?? You're living in a dream world if you think that's the case, people will down spec a bit, or choose a smaller engine, before they give up the brands they love.

 

[Woosh]

Do you mean that we will buy VW,Audi,BMW or Mercedes made in Mexico or do you mean that we will buy other brands?
KudosDave

importers like yourself will act accordingly. If the same car made in Germany attracts 10% duty and 0% if made from Mexico then they'll bring in that car from Mexico.
As I said, the EU27 has currently not agreed between themselves what to do about trade with the UK after brexit. That's why they hold a similar position with the UK hard brexiters. Soon enough, EU27 will need to work out what they want post brexit then we'll have a civilized conversation with them.

 

[KTM Bike Industries UK]

importers like yourself will act accordingly. If the same car made in Germany attracts 10% duty and 0% if made from Mexico then they'll bring in that car from Mexico.
As I said, the EU27 has currently not agreed between themselves what to do about trade with the UK after brexit. That's why they hold a similar position with the UK hard brexiters. Soon enough, EU27 will need to work out what they want post brexit then we'll have a civilized conversation with them.

My gaster is well and truely flabbered.

Your point seems to be that the EU can't agree what it wants the future relationship should be. So that would seem to put us in a camp with a lot of the rest of the planet, that wants a deal with the EU and its mid negotiation. Its not a quick thing.

As you point out currently the UK, Parliament, Government and even the Cabinet can't agree what they want, so why should the EU rush?

The cliff edge is approaching us... not them!!

 

[Woosh]

You really think a tariff of x% will make a car from Germany less attractive than a car built in Mexico, with associated shipping, admin costs and delays.

We can buy cheaper cars now, and the roads are still full of Audi / VW / BMW etc etc. Even my new Mondeo was built in Spain. Do you think an increase in my lease cost of even 25% a month would make me choose a mexian car?? You're living in a dream world if you think that's the case, people will down spec a bit, or choose a smaller engine, before they give up the brands they love.

it's a market place, therefore subject to market forces.
There will always people who will pay £1300 for a Brompton M6L while others pay half that for a Tern Verge.
After brexit, it's not you who will decide where the Mondeo will come from but Ford UK. They may choose to partner with Ford Mexico instead with Ford Spain.
As for extra shipping time, we are talking about 10 days to two weeks extra, nothing to worry about.

 

[Woosh]

My gaster is well and truely flabbered.

Your point seems to be that the EU can't agree what it wants the future relationship should be. So that would seem to put us in a camp with a lot of the rest of the planet, that wants a deal with the EU and its mid negotiation. Its not a quick thing.

As you point out currently the UK, Parliament, Government and even the Cabinet can't agree what they want, so why should the EU rush?

The cliff edge is approaching us... not them!!

You seem to think that we have to beg the EU27 to deal with us.
Nothing further from the truth. We all know that no deal is bad for business and as long as there is no deal, the divorce bill won't be finalized.
The EU27 has surely more time than the UK but even so, they are just as pressured into doing a deal as we are, they can't finalize their budget as long as a deal is not made.

 

[PeterL]

it's a market place, therefore subject to market forces.
There will always people who will pay £1300 for a Brompton M6L while others pay half that for a Tern Verge.
After brexit, it's not you who will decide where the Mondeo will come from but Ford UK. They may choose to partner with Ford Mexico instead with Ford Spain.
As for extra shipping time, we are talking about 10 days to two weeks extra, nothing to worry about.

I can vaguely remember a VAT scam with lorries driving around the EU collecting VAT rebates or whatever it was. The point being that if necessary cars and such will do much the same, fairly easily done for a multi-national manufacturer and a cigarette smuggler.

 

[Woosh]

I can vaguely remember a VAT scam with lorries driving around the EU collecting VAT rebates or whatever it was. The point being that if necessary cars and such will do much the same, fairly easily done for a multi-national manufacturer and a cigarette smuggler.

in the US, there is a trick of the trade in second hand trucks. Most third world countries charge higher duty on new trucks and reduced duty on secondhand ones. The difference could well be in the region of 50%. There are plenty of importers paying US truck drivers to drive brand new trucks to clock up 10,000 miles or whatever the number to qualify for secondhand truck status.

 

[KTM Bike Industries UK]

You seem to think that we have to beg the EU27 to deal with us.
Nothing further from the truth. We all know that no deal is bad for business and as long as there is no deal, the divorce bill won't be finalized.
The EU27 has surely more time than the UK but even so, they are just as pressured into doing a deal as we are, they can't finalize their budget as long as a deal is not made.

What is that the EU has said since Brexit that makes you think they "need" a trade deal with the UK as a priority? They are mid negotiations with a host of countries about free trade, including Mexico. So why should we jump to the front of the queue? When we can't even commit to paying what is owed as part of our pre-brexit commitments?

 

[Woosh]

What is that the EU has said since Brexit that makes you think they "need" a trade deal with the UK as a priority? They are mid negotiations with a host of countries about free trade, including Mexico. So why should we jump to the front of the queue? When we can't even commit to paying what is owed as part of our pre-brexit commitments?

there are many reasons why the EU27 needs to keep the UK 'in the customs union' zone.
1. existing quotas. If the UK is out of the EU zone, quotas have to be renegotiated because of the split and reduction in trade.
2. Trade weight. The EU28 accounts for roughly 20% of world trade, EU27 15%. This is going to be very difficult for the EU27 to rebuild their world weighting.
3. Budget. Besides the net contribution that the UK pays, or will be paying if we remain in the single market, the EU collects 80% of import duty collected by the UK. If we are outside the single market, 15% of the EU programs will have to be chopped.

 

[KTM Bike Industries UK]

there are many reasons why the EU27 needs to keep the UK 'in the customs union' zone.
1. existing quotas. If the UK is out of the EU zone, quotas have to be renegotiated because of the reduction in trade.
2. Trade weight. The EU28 accounts for roughly 20% of world trade, EU27 15%. This is going to be very difficult for the EU27 to rebuild their world weighting.
3. Budget. Besides the net contribution that the UK pays, or will be paying if we remain in the single market, the EU collects 80% of import duty collected by the UK. If we are outside the single market, 15% of the EU programs will have to be chopped.

 

[Woosh]

BTW, the EU27 needs our money even more than us. We are the guy with the cash, at a pinch, we can spend £100 billions on building new trade routes.

the EU27 will start very soon (in weeks) their own discussion how they see trade with the UK post brexit.
You'll see.

 

[KTM Bike Industries UK]

there are many reasons why the EU27 needs to keep the UK 'in the customs union' zone.

But its the current Government that has said we're leaving. The EU has always said they'd rather we didn't.

 

[PeterL]

But its the current Government that has said we're leaving. The EU has always said they'd rather we didn't.

To be straight it was the UK people that said we were leaving the EU. Quite why there is still so much posturing going on is more an EU thing but it's only posturing and there are chinks of light coming through and once the notion that there might be a change in Government and a reversal of the fact that we are leaving goes away things will move on apace I'm sure.

As for the money owed scenario you conveniently ignore the fact that it's not due now but in the future. We've said we would pay and we want to talk about other things that will happen in the future as well, like buying a new car, not even borrowing one. We don't expect you to pay for it or even lose on the deal. Don't you want my money?

 

[KTM Bike Industries UK]

To be straight it was the UK people that said we were leaving the EU.

Yes, true.. but we're not talking about the EU are we, we're talking about the custom's union and the single market, which is not the EU.

As for the money owed scenario you conveniently ignore the fact that it's not due now but in the future. We've said we would pay and we want to talk about other things that will happen in the future as well, like buying a new car, not even borrowing one. We don't expect you to pay for it or even lose on the deal. Don't you want my money?

I'm not ignoring anything, I'm just saying that we've committed to lots of things. Deciding to leave the EU doesn't suddenly remove our legal commitment to things we've signed up to in the future. We have to buy out of them, or stay in. That's the nature of the law.

if I move, it doesn't get me out of my phone contract, or my gym membership, or my car lease. All of which are forward spending commitments I've signed up to.

We've said we want out of the EU, so we have to settle our account before we leave, which means paying out of all the deals we've agreed to be a part of.

 

[Woosh]

if I move, it doesn't get me out of my phone contract, or my gym membership, or my car lease. All of which are forward spending commitments I've signed up to.

except that the terms of the contract in this case are far from being clear and enforceable.
That's why there is a need of goodwill from both sides.