It may be time for the UK to consider the possibility the German car industry might not be riding to the rescue.
Since the UK Brexit Referendum, a lot of ink has been spent on trying to measure the resolve of the European Union over issues like the Irish Backstop.
Consistently, those optimistic about the chance of an EU retreat have argued the UK’s significant trade deficit in goods with the EU means they’ll have to back down. The EU, they argue, simply sells far more things to the UK than the other way around and won’t risk tariffs fouling that up.
The current front runner for the UK Prime Ministership, Mr Boris Johnson, has indicated he believes that even if the EU doesn’t remove the backstop, he can get them to agree to a so-called “Article XXIV FTA” which would eliminate all tariffs both ways and provide tariff-free time for a more comprehensive agreement to be negotiated. This would be legal under WTO rules, but the EU have to-date denied being open to it.
Still, Mr Johnson believes the threat of tariffs on their exporters will make them move. But what are tariffs, who will be hit by them in a No-Deal and to what extent could their potential imposition scare the EU into compliance? Your humble (everyone who has ever met me just did a spit-take) author explains, using… data!
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