The easy way to understand whether someone groks trade or not is to see what they suggest when someone throws rocks in their own harbour. If they then insist that we’ve got to make our own lives worse by tossing boulders into our harbour then they’re all three of an idiot, a protectionist and a mercantilist. Jean Claude Juncker and the European Union more generally qualify for those three epithets therefore.

The European Union is threatening to target some of America’s most iconic brands if Donald Trump follows through on his threat to impose swingeing tariffs on imports of steel and aluminium.

Levi’s jeans, Harley-Davidson motorbikes and bourbon could all receive tit-for-tat duty hikes, according to Jean-Claude Juncker, the European Commission president.

Donald Trump makes Americans poorer by idiot tariffs on steel and aluminium, the EU response is to make Europeans poorer by idiot tariffs on Levi’s, bikes and booze. This is idiocy.

A very useful reminder that the EU simply is not a free trade project, it’s a zollverein instead. Free trade within the bloc but with strong barriers to trade with the rest of the world. This isn’t how we usually hear it of course. The Remoaners are those shouting that the EU is all about free trade – but that’s only within it. With the rest of the world, that might not be carrying the huge social costs, we of course must have barriers.

But, you know:

“If the Americans impose tariffs on steel and aluminium, then we must treat American products the same way,” Juncker told German television stations.

“We must show that we can also take measures. This cannot be a unilateral transatlantic action by the Americans,” he said. “I’m not saying we have to shoot back, but we must take action.

“We will put tariffs on Harley-Davidson, on bourbon and on blue jeans – Levi’s,” he added.

The reason we don’t like tariffs is because they make the population behind them poorer. The aim and point is to make steel and aluminium more expensive in the US. So, the retaliation must, just must, make Harley’s, jeans and booze more expensive in Europe. So, we’re going to say “Trump, you’re making Americans poorer! To hit back, we’ll make Europeans poorer!”

As we say, this is idiocy. Or, that Joan Robinson line about harbours and rocks. People who understand trade do not argue in this manner, only protectionists and mercantilists do. That the EU is so arguing shows they’re not about free trade.

As is pointed out, we all used to know this:

I have been watching the second season of Victoria on PBS (quite good, I think) and much of it has covered the famines of the 1840’s and the debate over the Corn Laws. At the time, it seems that average people understood that the British tariffs on imported food were in place solely to protect the agricultural profits of aristocratic (and by definition well-connected) landowners while hurting the country as a whole by raising food prices for every consumer and contributing to the famines that were sweeping Ireland and parts of England.

That is why Cobden won and the Corn Laws were repealed. Because the bulk of the population understood the issue. It’s also, and not by chance, the repeal which coincided with the rise of the standard of living of the working man after the Industrial Revolution. Instead of all the money going to landlords it went to the peeps, a good thing too.

Everything that the EU – and the Remoaners – says about trade is proven wrong in this reaction here. They are indeed making the protectionist, mercantilist, argument, that because the American government is stupid enough to make Americans poorer then the European one must make Europeans poorer in response.

At which point, bugger ’em, eh?

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Bongo
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Bongo

It’s hard to fathom Juncker’s reasoning but tit-for-tat is such a common behavioural trait it must be hard-wired into us. But the planned tariffs on Fe and Al mean it will be harder for Europeans to gain the dollars that mean they can go and buy stuff that are sold by Americans anyway. So unilateral tariffs if Trump goes ahead are already tit-for-tat, as less of their stuff, or services, or property or shares etc will get bought by foreigners anyway, because there will be slightly fewer dollars available to foreigners to do so. What Juncker is proposing could be… Read more »

The Meissen Bison
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The Meissen Bison

Does this démarche tell us anything about the EU that we didn’t already know? No, but it is a salutary reminder of the mindset that the EU’s panjandrums bring to the Brexit negotiations from which nothing good can come.

David Davis ought to break off talks with Michel Barnier instanter and linking arms with Boris Johnson begin a series of bilateral discussions in European capitals.

Quentin Vole
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Quentin Vole

The fundamental problem is that the EU’s decision makers (the Commission) have no democratic skin in the game. So Barnier has only two considerations in mind: (a) will this help me in my quest to succeed Juncker; and (b) does this increase the powers of the Commission. You can’t blame him for this; were I in his position, I’d adopt the same mindset.

Kevin B
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Kevin B

DJT replies to Junker.

“Donald J. Trump
‏Verified account @realDonaldTrump
15m15 minutes ago
If the E.U. wants to further increase their already massive tariffs and barriers on U.S. companies doing business there, we will simply apply a Tax on their Cars which freely pour into the U.S. They make it impossible for our cars (and more) to sell there. Big trade imbalance!”

Rhoda Klapp
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Rhoda Klapp

You know, if we used the term Zollverein instead of customs union people who support it might not be so keen.

Bloke in North Dorset
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Bloke in North Dorset

In the USA if they don’t like what Trump is doing they can sack him. Here in the EU we have no choice but to accept their idiocy.

A timely reminder of the main reason why I vote leave.

Maritime Barbarian
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Maritime Barbarian

Strange to relate, but Zollverein was one of the first German words I learned; after “blitzkrieg”, that is. We covered Bismarck and German unification in high school.
Archbishop Cranmer’s spoof column “Mrs Proudie” uses ‘Zollverien’ when talking about the EU.

Maritime Barbarian
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Maritime Barbarian

And also, I think a classic study on US tariffs covered salt.
Salt producers lobbied (and paid) politicians to impose tariffs. They did so. Raised $30m, from memory.
The producers could then raise prices so much that US consumers (the voters) paid an extra $300m for their salt. Straight to the bottom line.
The lobbyists only paid the politicians $3m, to gain $300m. Darned cheap, those politicians.

jgh
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jgh

“If you threaten to shoot yourself in the face, then we’ll just have to shoot ourselves in the face as well”

Dongguan John
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Dongguan John

Isn’t all this against WTO rules? Can’t just go around putting tariffs against particular economies or companies as you feel like it.