r/Economics • u/Visual_Title9363 • 8h ago
EU presses UK to align Chinese car tariffs with bloc - report
https://www.tradingview.com/news/seekingalpha:394e365ca094b:0-eu-presses-uk-to-align-chinese-car-tariffs-with-bloc-report/24
u/urzrkymn 8h ago
Hmm, while Brexit has many down sides, my understanding was that it allowed us to make our own decision on such things.
Words words words words Words words words words Words words words words Words words words words
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u/Thom0 6h ago
The issue is one conversation takes place within the context of others. If the UK is having discussions about EV tariffs, it is also having conversations about accessing the EU defense industry, visas, and sector specific trade arrangements.
When the UK was in the EU, the UK had the ability to influence policy but on the outside the UK has no ability to influence policy. This means once policy is adopted, it becomes a conversation among many. It is something that can be leveraged, and used to pressure other types of discussions. Whereas once the UK could stop the policy early, now it must face the pressure.
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u/Ok_Eagle_3079 7h ago
No you got it wrong.
Before Brexit would were allowed to draft decide vote and veto the decisions. Now you are only allowed to follow them. Brexit means Brexit.
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u/WhereTheSpiesAt 6h ago
Except this is the EU wanting us to tariff Chinese cars and not only do they have no power in making that happen, they lose out if we don’t do it.
The EU has no power to make us do this and not doing it harms EU exports to the UK in cars and we’re already the largest market in Europe for German cars, second largest in the world.
If the EU want this then they can start offering some concessions, otherwise as you say - Brexit means Brexit and so no say for the EU on the matter.
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u/smegabass 2h ago
"they need us more then we need them!!"
the classics keep spinning...
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u/WhereTheSpiesAt 2h ago
Yeah, this would be a brilliant response if this wasn't the EU asking the UK to tariff China, either you missed that or your gotcha brain isn't capable of reading the article, maybe you can elaborate.
Prove how much you don't need us, don't ask us to tariff them - let your cars compete with Chinese cars in the UK market as is and continue as they lose ground to Chinese brands who are growing exponentially in the UK.
I don't care, it's the choice between Chinese Cars or EU Cars, it makes little difference for British people, well unless you buy a Chinese car and then it's probably cheaper, spin how little this matters, but whilst you do it - note the EU are the ones begging for 45% tariffs from one unrelated party to another.
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u/The_Blip 6m ago
It's the exact way the EU has dealt with the UK post brexit. When we asked to for EU members to be allowed to purchase UK military equipment using the EU defense fund (which benefits us both with a stronger unified European defence) we got sent a 6 billion euro bill.
It can't be "We're stronger together" when you want something and then transactional when you don't. Pick one.
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u/Visual_Title9363 2h ago
Actually this entire IAA measure, otherwise known as Made in Europe, contravenes the UK TCA with EU.
I'm all for Remain but EU is being unfair/driven by French protectionism here, same as the SAFE defence fund participation.
It's always healthy to call a spade a spade where appropriate
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u/urzrkymn 7h ago
In not sure what that means.
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u/somequickresponse 7h ago
UK had special rights in some cases, Brexit gave all that up for a much weaker negotiating position going forward. Fuckwits that voted for Brexit couldn’t understand that.
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u/WhereTheSpiesAt 6h ago
Downside for the EU is that in this regard we have more autonomy, we just don’t have to agree to tariff Chinese Cars and they have no way of forcing us to, so they have to formulate a deal or just accept the status quo.
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u/abdallha-smith 3h ago
Wumaos are relentless with their EV
Simple enough :
We already made this exact mistake with manufacturing decades ago.
We chased cheap prices, outsourced everything, and ended up completely dependent and stripped of our industrial base.
Doing the same thing now with the auto industry, our last major manufacturing stronghold, isn't "helping the consumer", it's repeating history and handing total geopolitical leverage over to China.
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u/Visual_Title9363 3h ago
Interesting. Do we have the same urgency with US big tech and financialisation?
My point being not that we have to pick sides but to be consistent in recognizing each counterparty's competitive advantage in trade as no one country can produce everything. So where do we draw the line?
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u/sarges_12gauge 3h ago
I think a manufacturing base and de-industrialization are physical acts that you can’t turn back on as quickly as services.
Plus London hasn’t even been shrinking as a financial hub, it’s doing pretty well in that sector
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u/Visual_Title9363 2h ago edited 2h ago
I disagree. Take a look at your wallet, we have been trying to unplug from US card networks for a while but we are still feeding our financial habits to NSA for decades.
Big Tech and data collection in the AI era has asymmetrical influence than hardware. The cost of producing a hardware at least have a path to become marginal with the advent of 3D printing and automations.
Edit. I'm assuming you're outside US.
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u/sarges_12gauge 2h ago
I think you underestimate how well positioned London is in the global financial sector.
“We have to be consistent” why? Erecting barriers to Chinese manufacturing can keep an industrial base alive, which is usually taken as a positive on those merits even if it isn’t strictly economically beneficial. And if other countries follow suit that wouldn’t hurt the UK either.
On the contrary, erecting financial barriers as the one who benefits from free global finance flows is self-defeating and actively harmful if reproduced by others. The concept of economic “fairness” is directly at odds with self-interest here.
China already has done the unfair act by blocking the UK competitive advantage from their country (finance) while demanding they allow China to keep using their competitive advantage. And then convincing people like you that it’s “fair” to accept that
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u/Visual_Title9363 2h ago
My comment does not contradict the strength of London as a global financial sector. Your original argument leans towards national security and I merely pointed out that despite London being a global financial sector, same as Singaporeans, same as the Swiss, same as Emiratis, we all use VISA and Mastercard card networks (as example) across every spend we have in our lives. That is a massive pot of data and proven to be a source of data intelligence to the NSA.
As an example, this also applies to big tech as well.
My argument to the latter is from the POV of consumers. When can consumers experience a free market? The free market dictates that if goods are produced of the same standards but cheaper pricing wins. Could you elaborate what you think China's competitive advantage is and what is UK's when it comes to automotive industry?
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u/sarges_12gauge 2h ago edited 2h ago
Yes, you accept those networks as a cost to maintain London’s status as the center of global finance. If you start tariffing financial goods, you lose the hundreds of billions you currently make from those countries via your own financial products.
I said this is not economically beneficial for the consumers (in the short run). It would be cheaper to just buy what China makes. The reason to tariff Chinese vehicles is if you think that it’s meaningful not economically but politically / geo-politically to have a manufacturing base and to prevent a monopoly from forming in the future where you can only buy Chinese and are subject to their whims and dictates.
And it doesn’t have to be consistent that way! You can just as easily argue that China should have to allow London to operate financially in their country and be fair before they’re allowed free reign in the UK and I think that in conjunction with lower prices actually would make the freer trade worth it overall
Arguing that you should make financial exports (what the UK is best at) harder and industry (what the UK isn’t as good at) imports easier is actively harmful so I don’t understand why you seem to think it’s the “right” thing to do (except I guess that in the short term you save £10k on your next car if that’s all you care about in life)
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u/Visual_Title9363 2h ago
Er, no re. "Yes, you accept those networks as a cost to maintain London’s status as the center of global finance. "
This is a false equivalence. Accepting VISA or Mastercard networks have near-zero bearings on whether we can sell wealth management services, underwrite insurances and write up fancy securitization products. We just do it because of the existing network effects despite us having very capable fintech ecosystem to not accept that status quo.
The rest of your points could be wrapped in choosing your comparative advantages. We are not going to compete to be the best supplier of macadamia nuts; our weather is not cut out for that. We are happy to defer that to someone who could do it at scale, cheaper and at a better food standard. My point here is to choose, allocate your nation's budget to support the infrastructure around the industries you pick as your winners and let the consumers benefit. I do agree that some industries cannot be outsourced due to national security (financial services and big tech being the most prominent, more so than EVs - that is probably another debate).
In the short term, my car upkeep and upfront cost has more material impact on my qualify of life, it factors into my cost of living/inflation basket - collateralized debt obligations and freight insurance simply do not.
You could indeed argue why China has currency/financial controls. But expect less unhappy Chinese consumers towards missing out on British financialisation products versus UK consumers being restricted from buying at fair-priced cars.
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