Cont: Brexit: Now What? Magic 8 Ball's up

[Dave Rogers]

It's not the tariff level that the smugglers are concerned about - only the profits they can make by smuggling.

The tariff level is an essential part of the profit margin smugglers can make, because they can substitute profit for tariff payment. It is exactly what they're concerned about.

Dave

 

[ceptimus]

The tariff level is an essential part of the profit margin smugglers can make, because they can substitute profit for tariff payment. It is exactly what they're concerned about.

Dave

No. You're not reading and understanding. If goods sell for roughly the same price in the two countries, then the tariff level is irrelevant. The tariff could be set at one million percent, but if a bottle of whiskey costs the same on either side of the border, then there is no profit to be made by smugglers taking it across that border.

You can post all the horrible laughing dog gifs you wish. It won't alter the facts.

 

[GlennB]

No. You're not reading and understanding. If goods sell for roughly the same price in the two countries, then the tariff level is irrelevant. The tariff could be set at one million percent, but if a bottle of whiskey costs the same on either side of the border, then there is no profit to be made by smugglers taking it across that border.

You can post all the horrible laughing dog gifs you wish. It won't alter the facts.

#despair

 

[Lothian]

I doubt if any of you believe that lamb prices across the rest of Europe will rise 40% as a result of Brexit - so you must think that lamb prices in the UK are going to fall by the same amount

The costs of an EU shop buying British lamb will be subject to a 40% uplift as the importer pays the duty. The cost of EU lamb will not change but the excess of demand over supply would mean that shops can charge more.
The costs of a british shop buying British lamb will not change but the supply will exceed the demand so the selling price will be cheaper but I doubt 40% cheaper. In practice shops don't buy what they can not sell. Farmers will be left with sheep than no one will buy for what it cost them to produce.

If you're claiming that our try UK food prices will fall that much, then that is yet another good reason for leaving the EU. I look forward to being able to buy my lamb and other food items up to 40% cheaper than I can right now!

Foods we regularly export will be cheaper for a while but over time they will return to current prices but the number of UK suppliers will shrink due to a smaller demand from the EU. Farms will go bust.
Foods we regularly import, if we apply tarriffs, will be more expensive. Estimated are our shopping basket as a whole will be more expensive.

 

[ceptimus]

There's always an upside. If UK food prices rise significantly, it will help reduce the scandalous amounts of food currently thrown away, and could also reduce the UK obesity epidemic.

I don't believe that food prices will rise though, except maybe during the turbulent period following Brexit. In the longer term, I expect UK prices to fall once we can import goods from other countries without having to pay the very high levels of EU import tariffs we currently do.

 

[Dave Rogers]

No. You're not reading and understanding. If goods sell for roughly the same price in the two countries, then the tariff level is irrelevant. The tariff could be set at one million percent, but if a bottle of whiskey costs the same on either side of the border, then there is no profit to be made by smugglers taking it across that border.

Well, if you think that tariffs have no effect on the prices commodities sell at in different countries, then you're certainly giving a clear picture of the level of understanding of economics it takes to favour Brexit.

Dave

 

[Olmstead]

I guess all countries with border checks are just throwing money away. Don't really need them.

 

[Delphic Oracle]

There's always an upside. If UK food prices rise significantly, it will help reduce the scandalous amounts of food currently thrown away, and could also reduce the UK obesity epidemic.

I don't believe that food prices will rise though, except maybe during the turbulent period following Brexit. In the longer term, I expect UK prices to fall once we can import goods from other countries without having to pay the very high levels of EU import tariffs we currently do.

Just for reference the current tarriff rate is...?

You want no protection for UK farmers?

 

[Andy_Ross]

There's always an upside. If UK food prices rise significantly, it will help reduce the scandalous amounts of food currently thrown away, and could also reduce the UK obesity epidemic.

I don't believe that food prices will rise though, except maybe during the turbulent period following Brexit. In the longer term, I expect UK prices to fall once we can import goods from other countries without having to pay the very high levels of EU import tariffs we currently do.

We will have to apply WTO tariffs until we get trade deals.

 

[ceptimus]

You want no protection for UK farmers?

That's not really a Brexit specific question, but no, I don't want special protection for any UK industries, farming included.

If they are unable to compete in the world market (assuming similar standards apply) then they deserve to go bust.

This assumes, of course, that the farmers they're competing against, say in the EU, aren't being subsidised by the state: if they are, then we should apply an import tariff commensurate with that subsidy, so that our farmers are then, effectively, competing against EU farmers on a level playing field.

I think all subsidies to farmers and other industries are a bad thing. We should eliminate subsidies entirely in the UK and have completely free trade deals with other countries that do likewise. We should slap import tariffs on imports from countries that do subsidize, to cancel out the effects of those subsidies.

When we're buying things like oranges, that we don't grow here, then we don't have to worry whether the exporting country subsidizes them or not - we can just buy from the cheapest source that supplies oranges of the standard we want, so there would be zero import tariffs on those.

 

[Mojo]

That's not really a Brexit specific question, but no, I don't want special protection for any UK industries, farming included.

If they are unable to compete in the world market (assuming similar standards apply) then they deserve to go bust.

This assumes, of course, that the farmers they're competing against, say in the EU, aren't being subsidised by the state: if they are, then we should apply an import tariff commensurate with that subsidy, so that our farmers are then, effectively, competing against EU farmers on a level playing field.

I think all subsidies to farmers and other industries are a bad thing. We should eliminate subsidies entirely in the UK, have completely free trade deals with other countries that do likewise. We should slap import tariffs on imports from countries that do subsidize, to cancel out the effects of those subsidies.

Great, a trade war with the EU.

 

[Lothian]

No. You're not reading and understanding. If goods sell for roughly the same price in the two countries, then the tariff level is irrelevant. The tariff could be set at one million percent, but if a bottle of whiskey costs the same on either side of the border, then there is no profit to be made by smugglers taking it across that border.

You can post all the horrible laughing dog gifs you wish. It won't alter the facts.

It is good you don't understand as your view on brexit is clearly affected by the idea that tariffs are irrelevant.
Here is an example to show you are wrong.
Currently:-
A Scottish distillery makes whisky adds a small profit on cost and sells it for £10
An Irish distillery makes whiskey adds a small profit and sells for £10 (Euro equivalent)
An EU wholesaler/importer buys the whisky and whiskey for £10 and sells it to off licences for £15. Off licences buy whiskey and whisky for £15 and sell it to customers for £20.

Post brexit assuming a 1,000,000% tariff.

A Scottish distillery makes whisky adds a small profit on cost and sells it for £10
An Irish distillery makes whiskey adds a small profit and sells for £10 (Euro equivalent)
The EU wholesaler/importer buys the whiskey for £10 and sells it to off licences for £15.
The EU wholesaler/importer buys the whisky for £10 and pays £10,000,000 in duty to the government. It then sells the whisky to the off licence for £10,000,015 making a £5 profit.

Off licences buy whiskey for £15 and whisky for £10,000,015 and sell it to customers for £20 and £10,000,020 respectively making £5 on each bottle.

Given shops in the EU now sell to punters for £10,000,020 goods which cost £15 from a UK wholesaler smuggling those goods to the EU gives s profit of £10,000,005 a bottle less smuggling costs.

I realise that your million % tariff is an exaggeration but it makes the point very nicely.

 

[ceptimus]

You're just deliberately pretending to be stupid. Once again, read slowly. How much does a bottle of whiskey sell for, say in France? How much does the same bottle sell for in England? If the two prices are similar then there is no incentive for smugglers to smuggle. That is economics 101.

Now if you're claiming that the price will be significantly higher in one country than the other, I want you to explain what you claim the price differential will be, in which country the price will be highest and why. Just blathering 'tariffs' won't cut it. It's the final selling price to the customer that matters.

 

[Lothian]

You're just deliberately pretending to be stupid. Once again, read slowly. How much does a bottle of whiskey sell for, say in France? How much does the same bottle sell for in England? If the two prices are similar then there is no incentive for smugglers to smuggle. That is economics 101.

Now if you're claiming that the price will be significantly higher in one country than the other, I want you to explain what you claim the price differential will be, in which country the price will be highest and why. Just blathering 'tariffs' won't cut it. It's the final selling price to the customer that matters.

Which part of whisky selling for £20 in the UK and £10,000,020 in the EU in the example above do you not understand?

Edited to add
If the EU off licence bought the whisky direct it would pay £10 for the whisky and £10,000,000 in a tariff. How much do you think they will then look to sell that whisky for?

 

[ceptimus]

Well it's not grounded in any reality. It's just stupid. What do you REALLY think the prices will be after Brexit? Do you think there will be a sufficient difference to encourage smuggling? Which country will the smugglers be taking the goods to?

 

[Lothian]

Well it's not grounded in any reality. It's just stupid.

It makes the point your claim that tariffs have no effect is ignorant bull **** and you have no clue about the effect of brexit on trade. There is only one stupid thing in this conversation.

 

[ceptimus]

No. You're just unable to read and comprehend. I said IF the prices are the same in the two countries, then the Tariff levels are irrelevant to smugglers. Smugglers concern themselves with the selling price of an item, not the tariff level.

I see you are unwilling to engage on what you think the prices really will be after Brexit, and whether the price differences will be sufficient to encourage mass smuggling. That's fine. I don't think there will be mass smuggling either.

 

[Guybrush Threepwood]

So it seems there are three competing theories on tariffs currently:

Almost everyone: Tariffs are a tax on consumers in the country that applies them. They tend to supress international trade.
Donald Trump: Tariffs are a source of income for they country applying them, they impoverish the countries they are applied to.
Ceptimus: Tariffs have no effect on anything except when they do.


Who to believe?

 

[Mojo]

No. You're just unable to read and comprehend. I said IF the prices are the same in the two countries, then the Tariff levels are irrelevant to smugglers.

If there is an tariff on imports from country A to country B, then the price will pretty much inevitably not be the same in both countries.

 

[ceptimus]

So it seems there are three competing theories on tariffs currently:

Almost everyone: Tariffs are a tax on consumers in the country that applies them. They tend to supress international trade.
Donald Trump: Tariffs are a source of income for they country applying them, they impoverish the countries they are applied to.
Ceptimus: Tariffs have no effect on anything except when they do.


Who to believe?

Well, the way you phrase it, the version you claim I espouse is self-evidently true, and applies not only to tariffs but any other conceivable thing.

Turpentine has no effect on anything except when it does. Yup.
Ants have no effect on anything except when they do. Yup.
The planet Jupiter has no effect on anything except when it does. Yup.
Enthusiasm has no effect on anything except when it does. Yup.

Seems watertight.