| | Hi, my name's Phil. |
| | I like talking about politics and in this video, along a theme which has been developing over the past week, I'd like to discuss how Trump's double capitulation on his tariff plan this week leaves the way open to trying to force a debate on options. |
| | The public instinctively recognise that alignments are important for the economy. |
| | Trump has polarised the world. |
| | The efforts to maintain the bridge between Europe and America may become futile quite quickly. |
| | And most people believe that if the choice has to be made, we need to make it with Europe, not Trump's America. |
| | Even the Chancellor is writing in the papers about this being an opportunity. |
| | And you should see what those who don't have to be careful with their words are saying. |
| | But first, for daily news and commentary, please hit the subscribe button to stay notified. |
| | So, when it boils down to it, nobody really thinks the UK can actually go it alone. |
| | I know this was the suggestion from Brexiteers, who relied heavily on a sense of nationalistic exceptionalism for support. |
| | But even Brexiteers believed that Brexit would simply allow us to detach ourselves from one major economic power and reattach ourselves to another like a sort of parasite. |
| | We were supposed to leave the EU for a much closer trading relationship with America. |
| | There were no subtle hints about this. |
| | It was a major part of their pitch. |
| | America has the greater economy. |
| | Ergo, it's better to align with them. |
| | Well, that was never a good plan because we had completely free trade within the EU, along with easy trade around the world, and America was never going to let us have completely free trade with them, even if we gutted all our standards. |
| | But whatever people may have thought of the prospects a few years ago, the idea has been blown out of the water now. |
| | Even many Reform UK voters do not believe that the United States can be a reliable trade partner with the UK. |
| | Trump negotiated a trade deal with Mexico and Canada during his first term and tore it up during his second. |
| | It's not even that Trump does not honour the agreements of his country. |
| | He doesn't even honour the agreements with his own signature attached. |
| | And if you, you know, you don't need to be a regular observer of like the financial news to know this. |
| | Like people in Britain recognise this. |
| | And if that's not bad enough, Trump then spent about 10 days doing what at a distance looks very much like what Liz Truss did in the UK in 2022. |
| | He took action against expert economic advice, which resulted in a meltdown in the bond markets as well as the stock markets in Trump's case, and was forced to slam the brakes on. |
| | Like, same as Truss, isn't it? |
| | And Truss is very unpopular with the UK. |
| | You know, I mean, first of all, he did that with the reduction on tariffs for most countries hit hardest. |
| | Then on the quiet by exempting a load of goods produced in Southeast Asia, including Vietnam, if you're not aware. |
| | In fact, I wish I wish the media would point this out because I think what this means now, we probably have a higher effective tariff rate with American than Vietnam does. |
| | Vietnam, not picking on them, Vietnam was cited by Trump as being one of the worst offenders. |
| | So in his mind, Vietnam is one of the worst offenders, one of the countries taking advantage out of America and needs punishing, right? |
| | So countries with a high goods trade surplus with America, you know, the worst offenders, but they happen to export lots of computers and smartphones, they get exemptions. |
| | They're already on 10% with those exemptions, meaning they're effectively on lower than 10% now. |
| | But countries like the UK running a trade deficit with America, but exporting cars instead, which get 25%, we get higher tariffs now. |
| | Trump is literally hitting America's traditional allies with higher tariffs than the China-aligned countries, which Trump and his cabal claim are the worst offenders. |
| | And this isn't double standards on display here. |
| | It's not deliberate hypocrisy. |
| | It's just the consequence of having a moron trying to rewire the global economy and getting electric burns. |
| | The media should really be pointing this out very explicitly and everywhere. |
| | I know they're not really in Britain. |
| | I would have seen it if it was prominent. |
| | I wonder if they are in Australia or elsewhere in Europe. |
| | Let me know in the comments if you're aware. |
| | But anyway, the point is that even if the public aren't aware of all the finer details, they know that we need to prioritise European cooperation over America. |
| | Even the government has lost hope in getting a trade deal with America, it seems, and the public are certainly not willing to pay the price Trump is reportedly demanding. |
| | But as I've said before, what to do? |
| | In simple terms, we have two choices. |
| | First, we could accept a weaker economy. |
| | America has weakened our trade with them. |
| | The trade deal that we can possibly get will not restore that trade. |
| | I don't know if we can agree any sort of trade deal. |
| | It's not going to be one that restores the trade to where it was. |
| | Could arguably make it worse. |
| | But Trump's tariffs, albeit toned down, are still harming the global economy. |
| | That in turn means our exports to other markets are going to be harmed as well because customers around the world are going to have less money to buy our stuff, right? |
| | So if we do nothing, if we choose America to side with or do nothing at all, our economy weakens. |
| | That's inevitable. |
| | We could choose that. |
| | The second option is to mitigate trade losses caused by the tariffs with lower trade barriers elsewhere. |
| | It's been said enough. |
| | No, I don't need to keep hammering it. |
| | The low hanging fruit and the ripest fruit for the UK is the EU. |
| | A poll commissioned by Best for Britain being reported this weekend suggests a strong majority want us to prioritise the EU of the USA. |
| | They did have to admit to using questionable methods for the poll, which is unfortunate, but it is nonetheless consistent with more plausible polls as well. |
| | And it's also consistent with government policy as written down in the manifesto. |
| | What may be of more interest is a practical plan as actually set out in an opinion piece on Usury in the Guardian by Will Hutton. |
| | It's all very well talking about, you know, countries committed to rules-based trade need to get together. |
| | I've said it. |
| | But how do you organise that in practical terms? |
| | What do you physically do? |
| | Well, a simple and quick option could be to agree to just drop tariffs against one another. |
| | You know, they still maintain their current standards. |
| | It's not like you just let anything into your market. |
| | And some individual groups within each market might not like the removal of what will be for them protective tariffs. |
| | But tariffs are a barrier to trade. |
| | If willing markets are going to choose to boost trade rather than accept decline, getting rid of tariffs is the quickest and easiest way to do that. |
| | However, those tariffs are already quite low. |
| | So it's not a magic bullet. |
| | Getting rid of them all together will help. |
| | Doesn't solve the whole problem. |
| | Hutton's suggestion is an EU-led global pact to commit to not pursue, in his terms, beggar-my-neighbour policies. |
| | Now, these are ones where you would take a zero-sum game approach and strengthen your own economy at the expense of another's. |
| | He suggests coordinating with other trade blocs, not individual countries. |
| | So you've got the CPTPP, of which Canada, Australia and Japan are also members, aren't they? |
| | Along with the Gulf Cooperation Council. |
| | Now, note, last week, the UK government, Darren Jones, Treasury Minister, did say that we are talking to Gulf states about this. |
| | He also talked about the Southern African Customs Union and Mercosur, of course. |
| | He suggests using the World Trade Organisation to form a sort of global customs union council. |
| | But as Hutton points out, this needs two fairly important ingredients. |
| | The first is for the EU to lead on it. |
| | Now, it would be welcome if countries like the UK and Canada push for it behind closed doors. |
| | And I hope we are doing. |
| | It's clear from what Rachel Reeves is writing this weekend and what Darren Jones said last weekend. |
| | We're pushing for something. |
| | I just don't know what. |
| | But the EU has to take the lead on it as it's the only one. |
| | There's three major markets in the world. |
| | The EU is one of them. |
| | And it's the only one that's committed to free and fair trade. |
| | The second ingredient is haste. |
| | Donald Trump set himself a 90 day timer, hasn't he? |
| | Which is already about 85 days now, isn't it? |
| | At the end of it, he faces a choice. |
| | Either abandon his plan and claim some spurious victories for his followers, which they'll eat up. |
| | That's fine. |
| | But otherwise disband the strategy. |
| | Or conclude that whatever trade deals he's agreeing or, you know, are being negotiated are still going to result in trade deficits in goods for America. |
| | So other countries must still be taking advantage of him because that's how he's thinking. |
| | And he could then start ramping the tariffs back up. |
| | Oh, you're not treating me seriously. |
| | You're not kissing my ass enough. |
| | Right. |
| | Tariffs back up. |
| | Just because he's capitulated in spectacular fashion and it's been reported he's listening to more credible voices now. |
| | Nothing is consistent with Trump. |
| | You know, politics is about hoping for the best but planning for the worst. |
| | And planning for the worst in this case is planning for Trump pursuing a never-ending cycle of ramping tariffs up. |
| | Because the world's not treating us fairly. |
| | And then dialing it down when the markets melt. |
| | Maybe he tries to experiment to see where he thinks the acceptable balance is. |
| | So we need to get moving. |
| | We need to get moving before the 90-day period is over. |
| | As I keep saying, China is already on the move. |
| | They have planned for this. |
| | We haven't in Europe. |
| | So we have catching up to do. |
| | There's no time to waste. |
| | But there we are. |
| | Those are my thoughts. |
| | Let me know yours in the comments below. |
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| | Thanks for watching. |
| | And until next time, I'll see you later. |
| | Thank you. |