Germany exports way more to the UK than they import.
Who is going to lose that trade war?
Is 5% a tumble or a minor adjustment?
it is a non event
Merkel is doing all she can, to make the ‘exit move’ appear less palatable for other nations considering exiting.
Good luck with that!
People forget that bilateral trade agreements were the rule before the EU. In fact, the seeds of the EU were planted in a bilateral trade agreement between Belgium and the Netherlands just after World War II. It was later expanded to include Luxembourg (BENELUX) and became the basis for the Common Market and EEC.
Had the EU stuck to the trade benefits of the EEC and not expanded to micromanagement and open borders advocacy, there never would've even been a Brexit vote.
This simply means the lobbying class in Germany and/or the EU representing German automakers will press for reduced tariffs, almost certainly achieve them, and the market will work to “correct” itself.....”correct”, meaning, work to retake whatever numbers were printed in most recent memory. And the market will work to achieve its voodoo once again. It is the way things work: There is a cause and there is an effect and there is a reaction to the effect. It is like the buying activity that comes into a stock (of quality) that suffers what is perceived as a temporary hit in price. If you take a snapshot at the “dip” point and recall the prior (higher) number AND then forecast a trajectory to zero, then it is doom. But business activity and markets are not about snapshots. It is the same thing as a “sale” on consumer goods. In the vast majority of cases, if there is desire for those goods, increased volume (activity) will occur at the lower price during the sale. If the UK erects barriers to trade, then German automakers will work to lower their sale prices. If the Germans impose some kind of punitive something-or-other upon the UK to punish them for their exit from the EU, they will suffer lower sales, the lobbyists will get to work, and something will be worked out. That it does not happen inside of one week or one month is just the limitation of the illusion that the “snapshot” produces.
The UK should resurrect its trade agreements with the Commonwealth countries. Plenty of those: for example, Australia and Canada have massive natural resources, and India has a growing middle class, and a huge potential market. At least those countries wouldn’t be mandating the hours that British shopkeepers may open, what they must pay their employees, how many hostile immigrants they must accept, and what other regulatory hoops they must jump through. That’s up to the British people to decide for themselves.
While we’re at it - rearranging the world’s alliances, that is - can we please take this opportunity to exit the UNITTA (United Nations of Tyrants, Thugs and Antisemites) and create our own UNOD - United Nations of Democracies?