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Old 05.12.2016, 15:43
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Re: The Brexit referendum thread: potential consequences for GB, EU and the Brits in

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Tarifs will effect the EU more than the UK, with over 10% fall in the a 10% tariff of sales is irrelevant & will cost exporters ZERO. Being that you can't increase the price of a commodity item by 25% most of the tariff & currency loss will have to be paid for by the foreign company selling to the UK.

It's really very easy if you understand how the market works.
Then why do you not appear to have a breeze of a notion of how it does work?

To begin with the notion that tariffs will affect the EU more than the UK betrays a lack of understanding of basic math, let alone trade. To explain, in hopefully a way you'll comprehend, you have two parties in this equation; the UK and the EU (minus the UK). One is a market of 65m and the other is a market of 445m. If trade barriers were erected, that means that only trade between the UK and the EU member states would be affected. Presently this is 45% of all UK exports, versus a fraction of that for EU nations (Ireland would have the most to loose with the UK accounting for 15.4% of Irish exports, which is still a fraction of what the UK faces).

Those are the maths and there's getting around them however much you squeeze your eyes shut and wish really hard, and they're not in the UK's favour. Suggesting that a depressed sterling would compensate, let alone indefinitely, for this is bordering on delusional. It's a simple matter of scale - The UK is small fry next to the EU - simple as that.

This is before you consider that there are other tools in the fiscal toolbox. How are quotas going to be offset by currency fluctuations, for example? Answer; they're not.

Or that many British exports will become more expensive. Yes, because just because something was made in Britain doesn't mean that the materials to make it were.

Which returns us to trade barriers for the EU to one state being erected, versus to trade barriers for the UK to 27 states being erected. And the EU would be more effected? Dream on.

So given that you've presented a calculation based on wishful thinking rather than any actual semblance of reality, how is it a bargaining chip again?
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