Reply to post: Re: re: I wonder why they would pretend to think....

Croydon school rolling in toilet roll after Brexit gift deemed unfit for the Queen's Anus Horribilis

Anonymous Coward
Anonymous Coward

Re: re: I wonder why they would pretend to think....

Say a flat rate of 10% on your exports and 0% on your imports. As your imports will always be a lower cost than your export price (i.e. you sell things for more than you buy the parts for it, which applies to every business) then you will always lose out if you have a tariff on exports.

Country A exports raw material 1

Country UK imports Raw Material 1

Country A has import tariffs on Country UK of 10%

Country A has bilateral Tariffs on other countries of 3%

Country UK has import tariffs on Country A of 0%

Country A may get the the raw goods slightly cheaper but their products will always cost more to export and so their products won't be competitive. Country A would buy exported product from either other countries at 3% or from their internal market at 0%. Hence why free trade agreements make for a competitive global market. You can play to your strengths without being at the mercy of a tariff war or the varying rates and legislation around the world.

POST COMMENT House rules

Not a member of The Register? Create a new account here.

  • Enter your comment

  • Add an icon

Anonymous cowards cannot choose their icon