The Guardian Pumps Up Project Fear Over Brexit And Food Supplies

The Guardian has rather a nice set of graphics about food supplies and the connection between the EU and us here in the UK. They’re also pumping up the Project Fear nonsense:

With Boris Johnson claiming he will take Britain out of the EU by 31 October “do or die”, the UK’s reliance on EU food is a major risk. In the event of a no-deal Brexit, the UK would be obliged under World Trade Organization rules to impose average food import tariffs of 22% and conduct product inspections, leading to delays and shortening the shelf-life of products.

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Brexit Will Immediately Benefit 65 Million Consumers – From Day 1

As we well know there are people out there who manage to grasp entirely the wrong end of the stick – there is no excuse for Jezza other than that. But even among those who grasp the ordure stained knob there’s no excuse for this:

British farmers and manufacturers are at risk of being left defenceless against a flood of cheap imports in the event of a no-deal Brexit, The Daily Telegraph can reveal, amid growing concerns that the Government may struggle to pass legislation to cushion a hard exit from the EU.

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Apple’s iPhone Explains Why Trump Is Wrong About Tariffs, Trade And China

As innumerable of us have explained over the years there’s nothing wrong with a trade deficit anyway. But when that deficit is being wrongly counted anyway it’s even more trivial. Apple’s iPhone is used here as an example of why that deficit with China just isn’t what people seem to think it is:

The guts of an Apple iPhone show exactly what Trump gets wrong about trade

Crack open an iPhone and you’ll begin to see why President Donald Trump’s ongoing trade war with China doesn’t make sense.…

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The IMF’s Warning About Trade Tariffs and Trade Wars

Actually, the International Monetary Fund is arguing that the major worry we’ve all got in this global economy of ours is the silliness with which certain people are approaching that subject of trade.

The basic background to the trade story is:

Tariffs Are A Bad Idea Anyway.
The entire aim of having trade is so that we can go buy those lovely things made by foreigners. We only export so as to be able to swap something for those foreign made goods.

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Trump’s Anti-Illegal Immigration Tariffs On Mexico – This Is Near Insane

Donald Trump has announced the use of his emergency powers to impose import tariffs on goods from Mexico. This is, obviously enough, not wise given that it is American consumers who benefit from imports, they who bear the costs of trade restrictions. But we know he doesn’t understand that. However, it’s the reason which is so extraordinary. It’s to stop illegal immigrants moving through Mexico. Which is something that’s not really under the control of the Mexican government in the first place – it’s illegal, right?…

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The Effects Of Tariffs Upon Inflation

So, think through the standard points about trade tariffs. We stick a tax upon goods as they cross the border, inwards. The first two possible responses are:

1) Producers, or importers, cut prices and profit margins in order to be able to keep selling. No inflationary impact.

2) They don’t, they raises prices, inflationary impact.

Which happens depends. Largely on the elasticity of demand for the items. That closely allied to the substituitability. For example, short term demand for oil is notably inelastic.…

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The US Trade War Is Increasing The US Trade Deficit

This isn’t how mercantilists hope things will work out of course. But it would appear that a trade war can actually increase the trade deficit. Something not greatly desired by said mercantilists, given that they institute trade wars in order to reduce the trade deficit.

But we’ve been having Donald Trump’s attempts at a trade war with China for some time now. And the US trade deficit is rising. So, well done there Donnie:

Feeds exports – that could be some part of the trade war effect.

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The World Uncertainty Index Is Rising – Thank EU Donald Trump

An interesting addition to the possible economic statistics e can monitor is the World Uncertainty Index. This measures the use of the word “uncertain” in a particular series of economic reports. As we know it is uncertainty which limits such things as business investment, a major driver of economic growth. So, more people muttering about how uncertain things are the lower future economic growth. Seems logically fair even if measurement is always going to be tricky.

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Trump’s Trade War Raises American Costs, Reduces American Incomes – Heckuva Job

It is theoretically feasible that if we impose import tariffs then those selling to us are so discombobulated that they lower their prices – and profit margins – in order to be able to carry on selling to us. The more inelastic supply is – the less it varies in response to price changes – the more this will be so. It is also possible that it is demand that is inelastic. That what we’re willing to buy doesn’t change much with price.…

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Yup, Trade Tariffs And Trade Wars Are Worse Than We Thought

Economics is, as yet, an imperfect science. My own estimation is that in macroeconomics at least we’re at about the stage chemistry was when they still believed in phlogiston. But matters do progress – trade wars and trade tariffs are even worse than we thought they were:

The effects of trade policy might be more diverse than most economists think
Peter Egger, Katharina Erhardt 03 May 2019

When economists model changes in tariffs, their models make assumptions about the impact of those changes.…

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