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Are there plans to impose tarriffs post Brexit

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treez

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Hello,
Sorry to speak of Brexit here.
Many UK companies now import electronics from China and avoid the EU import tariff, because they pretend that they have made the products themselves, here in UK.

The Chinese manufacturer even stamps the British company's name on the PCB inside the product. Very often, the product comes direct from China to the UK customer, and never enters the UK company premises. When customs officials occasionally stop a shipment, the Chinese manufacturer then pretends that they bought the products from the UK's (token) manufacturing setup, and that they are now returning them to UK because they are the wrong power level, color, etc etc.....does the trick...customs disappear and are none the wiser.


When UK leaves the EU, UK companies will not have to pay this tariff anyway, because they will be out of the EU.
Currently, UK companies that import Chinese electronics have a small set of home made products, …kind of a ‘token’ design/manufacturing setup, so that its more believeable that they actually can make stuff themselves……(in fact, truthfully, even this small set of products are initially designed in China). This keeps the customs officials conveniently at bay
Anyway, if UK leaves the EU, then there will be no need to have this “token” design/manufacturing operation, and any UK company will in fact be able to import what it likes from China, and not have to pay any import tariff to anyone.
What this in fact means is that anybody, regardless of whether or not they are a company with a fake, token set of electronics products, will be able to import cheap stuff from China. As such, the small ‘token’ design/manufacture industry that UK currently has will die off…and there will be no electronics industry left in UK whatsoever…..however, if UK government elects to raise tariffs on Chinese imports, then this will not be the case……so what do you think?....will the UK government put tariffs on Chinese imports into UK post Brexit?
 

The EU imposed the tariff to protect the EU component manufacturing industry, however there was no tariff on manufactured goods, so it made it uneconomical to produce electronic manufactured goods in the UK or EU other than in small specialized areas. The UK has only a very small component manufacturing industry so it would be advantageous to remove the tariff and hope that UK electronics goods manufacturing will pick up. This is one of the reasons I voted to leave the EU.
 

To add to the confusion, I've done work in UK factories that assemble products from PCB assembly through to final packaging then fit "Made in the USA" labels to them. I've also seen lines of production workers assembling products by hand then applying "assembled by robots" stickers.

The problem is how to Police it and who has the right to decide the amount and penalty for abuse. I too have ordered parts from "UK distributors" only to be advised they have been shipped from Hong Kong. Even the largest UK component distributor is now based in Poland (no disrespect to Poland intended). For decades there have been import duties to the UK and Europe to 'support' home industries but they inevitably fail when the component parts are manufactured outside Europe in the first place. With the best will in the World, if you offer products at twice the price of your overseas competitors, you lose out to them. Removing tariffs to level the playing field would, in my opinion, be more advantageous to home industries.

Treez, for example, how many of your LEDs are manufactured in the UK? If a new manufacturing plant was set up (maybe by your own employer) and the LEDs cost say 50% more than Chinese ones, would you still be able to sell your lighting products at a profit? Extend the scenario to resistors, capacitors, semiconductors and substrates, would it improve the situation? Would imposing a tariff on imported components help you compete in an international market?

Brian.
 

Thanks, I suppose it wouldnt help us compete, no, Though the country that throws it all in the air (with respect) is Germany. In 2014, Germany was the worlds biggest exporter by capital vlaue.
Again i speak with total respect of Germany here.....Germany is a protectionist country (just look at the way the state funded KfW bank funds German small/mid companies), and yet Germany somehow manages to compete internationally in a brilliant way.
Germany knocks all popular marketing and economic theory to pieces.

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Oops sorry, maybe imposing a tariff on imported components would help, but how do you stop the Black market?....also, as you know, UK has no component manufacturing industry whatsoever at the moment.
 

In my opinion it will be cheaper for everyone to import electronics from China.
Outside of the EU the UK won't be able to compete with German, French, Spanish, Czech manufacturing companies because of high import taxes to the EU imposed on British goods. British-made electronics will be simply more expensive for customers, so maintaining any manufacturing industry will be pointless.
Of course the UK can sign trade deals with other countries in Africa or South America but those markets are not as wealthy as the European customers. African customers will buy Chinese-car instead of British-made Jaguar... And at the end of the day most of the foreign-owner manufacturing plants will be moved to the EU.
 

Thanks Filip you speak good sense.
As you know, what you do not mention is that the UK does not actually manufacture stuff anyway, ...even while it was in the EU. So being in the EU did not make British exports popular in the EU....because the UK did not manufacture anything whilst it was in the EU.

There are exceptions of course, eg Dyson products.

You say that the EU countries will not buy UK stuff....but of course, the EU does buy Dyson vacuum cleaners, even though these are sold into the EU on W.T.O. rules, and always have been...even while UK was in the EU. So your argument is not toally correct, as you would i am sure appreciate.

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You also mention Jaguar cars.....these are Indian owned. Not British.
Jaguar is an example of how, whilst in the EU, the UK went through a massive program of de-industrialisation....now the UK does not make any cars at all.....and that is from when UK was in the EU.
Whatever the EU did for UK, it certainly did not help UK exports...because UK industry died off while UK was in the EU.

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Another point is, that any country in the world can sell stuff to eg Romania, Greece, Italy etc without having to worry about EU tariffs.....because the Romanians etc simply dont declare the products........and there simply are not enough customs officials around to police the tariffs.
And after all, the non-EU country that is exporting stuff into say Romania, will just put "made in Romania" on the product and then the customs officials dont even know that the merchandise came from outside the EU anyway.

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Do we seriously believe that Romanians and Portugese etc will pay top dollar for German goods just because of they are tariff free?.....no, they will import non-EU stuff and just avoid paying the tariff.

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With all respect to Greece, i think that country should be excused all of its debt, as it is so unfair to the Greek people....but seriously, we all know it, Greece is broke financially, do we seriously expect Greeks to restrict themselves to buying EU goods when they could buy cheaper from outside the EU, and just avoid paying the tariff?...No.

Greece would never have been able to borrow itself into bankruptcy if it had not joined the Euro...and the Greek people were taken into the Euro currency without a referendum.

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And yes, I am ashamed to be British sometimes….when I hear of all the Greek’s who are wrongly taking money out of Greece and investing it in expensive London properties. This should be stopped. Any British who profited from such money should be made to give the money back.
 

Thanks Filip you speak good sense.
As you know, what you do not mention is that the UK does not actually manufacture stuff anyway, ...even while it was in the EU. So being in the EU did not make British exports popular in the EU....because the UK did not manufacture anything whilst it was in the EU.

There are exceptions of course, eg Dyson products.

You say that the EU countries will not buy UK stuff....but of course, the EU does buy Dyson vacuum cleaners, even though these are sold into the EU on W.T.O. rules, and always have been...even while UK was in the EU. So your argument is not toally correct, as you would i am sure appreciate.

Dyson products are not made in the UK. Some time ago all the manufacturing was relocated to Malaysia. And I am pretty sure that Dyson's company is registered in one of those tax havens to avoid paying taxes in the UK. But to be honest, vacuum cleaners are rather niche products.

You also mention Jaguar cars.....these are Indian owned. Not British.
Jaguar is an example of how, whilst in the EU, the UK went through a massive program of de-industrialisation....now the UK does not make any cars at all.....and that is from when UK was in the EU.
Whatever the EU did for UK, it certainly did not help UK exports...because UK industry died off while UK was in the EU.

I agree with that. Look at the buses operated by TfL: those are made by Scania (a Scandinavian company), tube trains are made by Alstom (French company), aeroplanes operated by B.A. are made by German-Franco Airbus. Even Hinkley Point nuclear power plant will be build by EDF - a French company.


Another point is, that any country in the world can sell stuff to eg Romania, Greece, Italy etc without having to worry about EU tariffs.....because the Romanians etc simply dont declare the products........and there simply are not enough customs officials around to police the tariffs.


I do not have an experience with trading with Romanians but it rather sounds like a stereotype.
 

so maintaining any manufacturing industry will be pointless.
Thanks but what about for the UK home market?.....why is it not cost effective to make stuff in UK for UK?..(ditto any other country).. and put tariffs on the Chinese stuff coming in.

The good thing about making stuff for yourself, is that you dont have to go through all the regulatory red tape....which means its cheaper.

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I do not have an experience with trading with Romanians but it rather sounds like a stereotype.
No stereotype...i would have added UK to that list alongside Romania but couldnt as UK has now left the EU.

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Dyson products are not made in the UK. Some time ago all the manufacturing was relocated to Malaysia.
Good point, but i think that was because the pound (currency) was so high at that time.

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And I am pretty sure that Dyson's company is registered in one of those tax havens to avoid paying taxes in the UK
I doubt it. But its a good point. Many tax havens are actually legal.
Its common for UK co's to be registered in Luxumbourg or Switzerland or Ireland for tax purposes.....there is no way for the guy on the street to be able to find this out though.

There are whole office blocks in Switzerland, which are all totally empty, and regularly cleaned…..each of them has on its door a brass plate with the name of whichever UK based company is using it as a tax haven.

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I agree with that. Look at the buses operated by TfL: those are made by Scania (a Scandinavian company), tube trains are made by Alstom (French company), aeroplanes operated by B.A. are made by German-Franco Airbus. Even Hinkley Point nuclear power plant will be build by EDF - a French company.

Yes , and I agree……..and most of my British compatriots think this is a good thing, and think that it is because foreign countries love the UK and want to make stuff for us, and keep UK in the manner to which it has become accustomed…what they don’t realise is that UK is heading rapidly for the third world…and will arrive there within 10 years.
 

Hi Treez,

I think you should be more circumspect with your rants and occasionally check a few facts before letting off a few stressed out rounds.

....also, as you know, UK has no component manufacturing industry whatsoever at the moment.

Let's just randomly look at component manufacturing in the UK, say capacitors, shall we?

Oh, gosh...I must be hallucinating about wild and crazy non-existant things like ICW Film Capacitors and MFD Capacitors or API Capacitors and the company whose name I forget who make polystyrene capacitors for RS. ;)

Happy New Year, Treez, I hope you have a successful and pleasant 2018.
 

That is (or was) LCR Components in South Wales. I'm not sure if the company still exists, last time I passed their factory site it looked like it was about to be redeveloped.

Treez, your rather dismal views on UK manufacturing are quite wrong in general although you are partially right in respect of electronic component manufacturing. If you want to see aircraft manufacturing, I could show you the massive Airbus factory in North Wales and the associated ports used to carry parts on custom barges to the assembly plants. The fact is, the UK is still a major World player in manufacturing and it is on the increase. The previous UK government had a stated policy of shifting the UK economy to a service rather than manufacturing one, that is the reason for industrial decline and eventual collapse of the economy. It also contributed largely to the north/south divide as it provided bias toward the financial services in the south at the expense of manufacturing in the north.

I'm pleased to say that current government policies, despite the bashing they get from the opposing political parties, are starting to re-balance things. It takes time to re-establish and replace industries, especially when left with no money in the bank. Obviously there have been changes in demand from customers over the past few years so it follows there should also be a change in the items made and the manufacturing methods so it will take time - but it's getting there.

[/Rant mode] have a great 2018 everyone.

Brian.
 

Tariffs or no tariffs, legislators paved the way for Chinese goods to dominate markets.
Entire populations are unable to resist their low prices. Perhaps China will eventually improve its standards, and create innovations, and become giants in electronics.

Once upon a time it was Japan who was becoming a new player in the electronics field 60 years ago. They flooded the globe with cheap transistorized pocket radios. As consumers we could not resist them. (Commendably we did not hear they were counterfeiting IC's, nor reverse-engineering successful products, etc.) Since that time many Japanese companies demonstrate excellence in their fields, becoming giants in electronics. (A few examples: Sony, Mitsubishi, Toshiba.) This did not necessarily require a decline in other world players, of course.

Now more recently it's China that is becoming a big player in the world. We try to ignore dark news items about how China carries out labor and manufacturing practices. Eventually, however we might hope that Chinese manufacturing shall someday excel. We also must hope that the declines elsewhere in the world (though lamentable and perhaps preventable) will only be temporary.
 

Thanks d123, yes my apologies, I meant to say “semiconductors”, and was not referring to passive components.
Indeed, as you certainly know, pretty much every country that operates heavy electric motor type equipment such as electric trains, crains etc etc has high power capacitor manufacturers in the country somewhere, and this is because the power capacitors in those equipments need to be replaced from time to time as part of the maintenance schedule.
You would really impress me if you told me that the companies that make that heavy electrical equipment are British. They are not likely to be, since for example, the Brunt of the British Naval Fleet is powered by Electric Motors and Drives designed and built by the French. UK has reported a negative balance of trades for every year of the last 34 years consecutively .....and the loss is worsening as time goes on.
Also, thanks Betwixt for chiming in with your statement that you think that one of the capacitor makers that d123 mentioned looks like its being “redeveloped”. I sincerely hope you mean “expanded”, and not having its old premises converted to a block of flats or something.
Truth is, we don’t even know if the capacitor makers listed above are actually British owned.
I am not against Foreign companies, but UK has a National debt of 2 trillion….and UK has sold off the UK owned industry so desperately needed to pay off that debt.
Betwixt Thankyou for mentioning the operations of Airbus…..however, as we both know, you are expressing the point even more than I am because Airbus is pretty much totally Franco-German, as Filip.Amator above kindly allures.
Baroness Neville Rolfe, the UK business minister, stated in 2016 that UK companies (>500 staff) are 66% owned by Foreigners.
The previous UK government had a stated policy of shifting the UK economy to a service rather than manufacturing one, that is the reason for industrial decline and eventual collapse of the economy
Thanks, though I would refer us to the book by Nicholas Confort:-
The Slow Death of British Industry A Sixty-Year Suicide 1952-2012….
https://www.amazon.co.uk/British-In...coding=UTF8&psc=1&refRID=TBAA76P07AAQ1CB22DZT
……its not just the last UK government….this is from 1952 onwards….the death knell again tolled for UK industry when the Enterprise Act 2002 was signed by Blair’s lot…this meant that UK governments can now sit back, and indeed, even actively encourage, the further sell-off of UK industry.
There is currently a campaign with a set of objectives to rejuvenate British Industry, however, this is too difficult to get going. Too many of UK politicians are, shall we see, “under the influence”, of large wealthy Foreign corporations. The UK will be in the Third World within the decade.
The below is a summary of UK industry…

The suicide of UK owned industry from 1952 to present day (2016):
In the early 1950s, the UK was an industrial giant. Today, it is an industrial pygmy. In 1952, UK owned companies made a quarter of the world’s manufacturing exports. Today (2016), the UK makes up less than 2 per cent of the world’s manufacturing exports, and even that percentage is mostly made up from foreign owned companies operating within the UK.
The UK now has a National Debt of 1.7 trillion pounds, and has been spending much more than it earns for every year over the 33 years up to 2016, and its trade deficit is dramatically worsening. The supply of North Sea Oil on which UK has become reliant is about to run out. >50% of UK industry is foreign owned; >40% of UK vital services (electricity, gas, infrastructure etc) are foreign owned; >66% of the fuel for the UK economy is foreign owned. UK is not capable of building its own nuclear power stations but relies on China to do it whilst China is already busy building islands just off the coasts of Vietnam, Brunei, Malaysia, Taiwan and Phillipines. >90% of UK schoolchildren stop progressing in maths & science at the age of 16. The OECD recently declared that a quarter of UK’s adults have the maths skills of a 10 year old. The brunt of the UK’s Naval fleet is powered by Electric Motors & Drives designed and built by the French. In the UK in 2016, >70% of London’s ‘zone 1’ office space is foreign owned.
The UK’s downward slide is moving at an alarming pace....In 1952, the UK was an industrial powerhouse. In 1952, UK brought out the world’s first commercial airliner, and was a close second to the USA in the development of the computer. In 1956, UK was amongst the first to bring out a Nuclear power station. In the 1950’s, Britain invented nuclear power, led the world in its application and developed enough stations to sustain a sizeable home-grown industry with a strong skills base. In the 1950s, UK owned companies were the second-largest manufacturers of cars in the world (after the United States) and the world’s largest exporter of cars.
The UK’s Sir Frank Whittle invented the turbojet engine in the 1930’s. In 1940, the UK had developed a Cavity Magnetron a thousand times more powerful than anything in the USA. The Mini, as developed by the British Motor Corporation in the 1960’s was voted the 2nd most influential car of the 20th century.
However, the UK flogged most of Rolls Royce to the Germans, Jaguar Land Rover to India, Bentley to the Germans, Rover to the Germans, Triumph to the Germans, and now has virtually no car industry of its own (Morgan cars have BMW engines). The UK has 25.8 million cars on its roads, and each one represents lots of money flowing overseas, worsening the already disastrous UK trade deficit. The UK cannot blame the arrival of the Far East into the world economy for UK’s poor performance, because after all Germany is managing just fine. In 2014, Germany was the world’s biggest exporter by Capital value.
The UK privatised its rail network so as to bring the benefits of private ownership...but then the German government bought a huge chunk of it (Arriva trains)...so its back into state-ownership...but owned by the state of a foreign country. In December 2015, the UK derived 17% of its energy from wind power. In Oct 2016, there were 6594 wind turbines in the UK. None of these wind turbines is designed or manufactured in the UK. Virtually all of them are designed and manufactured by Siemens of Germany or other foreign companies.

The UK payed £4.4bn net to the EU in 2009/10, but this rose to £8.8bn in 2014/15....the EU actually took 12.8 billion from UK, but gave back £4bn to be spent in ways decided entirely by the EU. The UK recently flogged off Admiralty Arch (the glorious gateway to Buckingham Palace) and The Old War Office (on Whitehall) to Spain & India respectively, for conversion into Hotels/Flats. In 2002, the UK came up with the "Enterprise Act", freeing its government from the duty of intervention when its own UK owned industries of great value were about to be sold into Foreign ownership...subsequently, from 1997 to 2007, foreign ownership of the UK’s firms rose from a third to a half, and foreign ownership of its vital services (electricity, gas infrastructure etc) rose to 40 per cent. Other countries (eg USA, Germany, France, Spain etc etc) have legislation which stops them from selling off their country’s prized assets in the way that the UK does.
Foreign companies acquired £30billion worth of the UK's enterprises in 2009. In 2010, that rose to a value of £54.5 billion. In 2016, the UK flogged off the magnificent ARM company to the Japanese for £24.3 billion, this had been the jewel in the UK's crown, one of the greatest electronics companies in the world. The UK flogged Boots the Chemists to the Italians, and Boots stores remain in the UK, and then the UK found that under Italian ownership, the UK received just £9 million in Tax from Boots, rather than the £90 million per year that it received before flogging it off (due to Boots getting "brass plated" by the Italians to Zug in Switzerland)......The same story of reduced Tax revenue is prevalent with most of the UK's other multitudinous industrial sales to foreign companies. In 2016, the Chief Advisor to the Turkish Prime Minister indicated that all the UK now does is to “Produce Cadbury’s chocolates and Maltesers”. (But in fact, Cadbury’s actually was sold to the Kraft foods company of the USA in 2010). In 2012, Nikolas Sarkozy, Prime Minister of France, declared that “The United Kingdom has no industry any more”. England is the 5th (fifth) most densely populated country in the world.
Between 2002 and 2008 the UK suffered a 50% drop in the number of its own domiciled school leavers opting for Electronics/Electrical Engineering degrees. Each year much less than 500 of UK school leavers "enrol" for an electronics degree, the majority of these choose all software modules or transfer to the School of Computer Science at the end of year two. In UK it is virtually impossible for almost anyone to assert the exact number of UK_citizen school leavers that end up actually graduating with an electronics degree each year....As far as Electronics Hardware centred graduates are concerned, the number is thought to be under 100 per year. A paltry amount.
When foreign owned companies in UK are a success, the profits flow overseas, when they do less well, there are more likely to be job losses. R&D spending gets notably less when UK industries get sold overseas. Tax revenue to UK is dramatically less. The UK is poorly placed to pay off its huge National Debt, since it has shed the once UK owned Engineering industry so desperately needed to pay off its debt.
The UK National Debt of UK is 1.7 trillion pounds in 2016. However, this figure is often “watered down” by expressing it as “National Debt as a percentage of GDP”. This comes out as 90% for UK…hardly a cause for comfort in itself, but in any case, GDP has dubious meaning for a country like UK, where >50% of industry & services are foreign owned. This is partly because for instance, GDP does not take into account profits earned in a nation by overseas companies that are remitted back to foreign investors. This can overstate a country's actual economic output.
Like in no other country, Britain has sold off more than half of its companies to Foreign owners (stated by Alex Brummer in book “Britain for Sale”). Nearly two thirds of UK manufacturing businesses that employ over 500 are now owned by foreign companies claimed business minister Baroness Neville-Rolfe in 2016.

.......................
....i sent the above to the Rt Hon Hillary Benn MP, and he replied "you've got a bit of a point there".
......................
I also emailed The Baroness Neville-Rolfe about the alleged statement of hers that 66% of UK business’s (>500 staff) are foreign owned. She very kindly replied as follows….
I don’t recall this, but I would have been speaking on departmental advice if I did say it. I think the figure is probably lower.
I am sorry I cannot be more helpful.
...oh dear "probably"
..i was hoping for a full denial
 
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I'm trying to get a change in law through the House Of Lords at the moment - don't expect miracles from politicians (speaking as a Councilor myself!)

However, I strongly suspect the figures are in error - things are not as bad as you think and don't forget the MP you wrote to has a vested interest in making things look bad to promote their own agenda.

Brian.
 

I am convinced there is no error.

Alex Brummer's book "Britain for sale" has been verified, everything in it is fact, and it also says...
subsequently, from 1997 to 2007, foreign ownership of the UK’s firms rose from a third to a half, and foreign ownership of its vital services (electricity, gas infrastructure etc) rose to 40 per cent.

https://www.amazon.co.uk/Britain-Sale-British-Companies-Foreign/dp/1847940765

And Thanks but what figures are in error?...The British National Debt?...the fact that UK has had a negative balance of trades for the past 34 years consecutively, that UK National Debt is five times higher than that of Greece?
Did ARM not get sold to Japan for 24.3 billion in 2016?
That Britain used to be the world's biggest exporter of cars , but now hardly makes any British cars at all.
 
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