Friday 11th December 2020
Is the no-deal Brexit coming?
British consumers face a "tariff bomb"
Time is running out for British Prime Minister Johnson, or rather against him: Great Britain and the EU still have time until Sunday to conclude a trade pact. Then, after years of tug-of-war, the British are actually threatened with a no-deal Brexit – with severe consequences for the economy and consumers.
The trade association speaks of a "customs bomb", parliamentarians warn of a "fall into the abyss": The British economy is looking at a possible no-deal Brexit with fear and anger. The UK and the EU have until Sunday to agree on a trade pact for the period from 2021. But in light of the latest skeptical remarks by Prime Minister Boris Johnson, business representatives are now more than ever expecting higher tariffs and other trade barriers from January 1, with severe consequences.
48 percent more for minced beef, 16 percent for cucumbers, 10 percent for lettuce: the food trade, for example, has to reckon with significantly higher prices. On average, more than 20 percent higher tariffs would be due on fresh food such as fruit and vegetables from the EU, warned the trade association BRC. BRC expert Andrew Opie said that a few weeks before the end of the transition phase on December 31, when Great Britain is still a member of the customs union and the EU internal market, there is still no agreement in place is "alarming".
Currently, around 80 percent of UK food imports come from the European Union. According to a study by the Food Foundation charity, a British family can expect four percent more costs for fruit and vegetables if the higher tariffs are passed on directly to consumers. The boss of the retail giant Tesco, John Allan, expects that the average grocery shopping could be around five percent more expensive. Experts are also concerned that it is still not clear what companies will have to consider in future for trade with the EU and which documents will be required. "This is crazy," scolded trade expert Sally Jones from consulting firm EY. Although the government has known about it for years, it has taken too long.
Trucks jam at the port in Dover
Logisticians and the transport industry look at Dover with horror. For days, trucks have been piling up for miles in front of one of the most important ports on the English Channel. In many places, containers clog the space. Many companies are trying to replenish their stocks before the end of the Brexit transition phase on December 31, but there are increasing reports that many ships are not accepting containers and are calling at other ports with more lucrative orders instead.
The toy manufacturers association BTHA has already warned that Christmas gifts for thousands of children in the UK might not arrive on time. The Japanese car maker Honda stopped production at its Swindon plant due to delivery problems. A Brexit without a trade agreement, but also recent government measures also endanger numerous jobs, warn business representatives. The Japanese manufacturer Nissan has already threatened that its factory in Sunderland with around 6,000 employees will no longer be profitable if ten percent tariffs are added to its car exports to the EU in the event of a no deal. And today, the head of the UK's largest airport, London Heathrow, John Holland-Kaye, called on the government to reverse the planned cancellation of tax-free purchases by international visitors. In Heathrow alone, 2000 jobs are therefore on fire.
Unions, on the other hand, fear that companies will cut investments and relocate jobs abroad because of the Brexit uncertainty. "The working people will never forgive this government if we step out of the EU without an agreement just because ministers want to keep their right to attack labor rights," said Kathleen Walker Shaw of the GMB union.
And the government itself? Culture, Sport and Media Minister Oliver Dowden emphasized that food prices would rise by a maximum of 2 percent – and that the EU would also experience higher prices. Foreign Minister Dominic Raab was also "not worried". In order to ease the traffic jams, the government relaxed the working hours for truck drivers. The central bank also showed confidence. She admitted that this could lead to disruptions in financial services. But Fed Chairman Andrew Bailey stressed: "We can take a great many measures, and if possible we will take them."
.