Wednesday, 7 March 2018

Trump's Tariffs Torpedo Tories

Another day passes another Tory Brexit delusion is exploded.

Anyone with any sense knew that the Tories claims about a global Britain, after Brexit were a dangerous delusion owing more to colonial era hubris than any rational analysis of modern Britain, and its place in the world.  The idea that Britain was going to enjoy some golden era after Brexit, as it once strode the world, garbed in the robes of Britannia, like a colossus was pure Tory fantasy.  Just as they blame foreigners, and in particular immigrants, for the ills of a rather decrepit and declining British capitalism, so they blame the EU, for the failure of British capital to even keep pace with other developed economies.  Yet, for Germany, being in the EU, has had none of the dire effects on preventing the growth of trade with China and other developing economies that the Tories claim has limited the ability of British capital to increase its exports.  On the contrary, Germany is the world's second largest export after China, and a large part of that success is seen by Germany as stemming precisely from the greater leverage and bargaining power that being a part of the world's largest economy gives to EU members.

Even the government's own advisers have told them that giving up membership of the EU, for the fraught prospect of increasing trade with the rest of the world, is like giving up a three course meal in favour of a packet of crisps.  But, the ideologically driven Tories forced to try to shore up their membership and electoral base amongst the plethora of small capitalists, who increasingly cannot compete with the large scale industrial capital that has expanded on the basis of the EU, would rather forsake the economic fortunes of the country as a whole, in order to protect the immediate financial interests of those small capitalists.  It is those small capitalists that cannot survive without all of the petty swindles against the workers that the big capitals long ago, found they no longer needed, as they extracted masses of relative surplus value,; it those small capitalists who seek to make their small profits, by avoiding even the minimum requirements of a civilised society in protections for workers, for consumers and for the environment.  Its because for the last 40 years, conservative governments in Britain have pandered to those sentiments that today, Britain has been turned into a low-wage, low productivity, high debt economy, less able to compete in the world, even against other EU countries such as Germany.

That is the basis for the Tories actual agenda after Brexit for a bonfire of regulations.  The claim that Britain would be free to compete with other low wage, low rights, low productivity economies across the globe is what drove their agenda of a bonfire of workers', consumers, and environmental protections after Brexit, which would lead Britain ever faster into the fourth rank of global economies, as they raced to the bottom.  It was never going to be an effective means of becoming globally competitive with developed economies, such as Germany or Japan, in relation to all of those areas of high value, high productivity production, but increasingly nor would it have enabled Britain to compete with even the developing economies such as China, and others in Asia, that are rapidly moving into those areas of production, as they recognise that it is that which represents the future, whereas the vision of the Tories is merely a memory of the past.

The Tories claimed that being in the EU restricted Britain's ability to sign trade deals with other economies such as the US, who after May's cringing visit to Trump, immediately after his election, showed exactly what kind of subservient role, Britain would have to play in any such arrangement.  Continually, the Tories told us that Trump would "give us a good deal".  Anyone with a brain knew that was a fantasy.  Now Trump has exposed that fantasy, as he imposes tariffs of 25% on steel imports, and 10% on aluminium imports.  Trump claims that the measures are intended to punish China.  However, China exports relatively little steel to the US.  It doesn't even come in the top 10 of exporters of steel to the US.  Canada, Mexico and Britain do, however, come within that top 10.  It won't be the huge Chinese economy that suffers from Trump's tariffs, but the steel producers in Canada, Mexico, Britain and the EU.

But, the idiocy of Trump's policy itself is indicated by the situation in relation to Mexico, which is also part of the North America Free Trade Association, which shows how little, when it comes to the crunch such free trade deals are worth, as opposed to being inside formal structures such as a Customs Union, Single Market and so on.  Trump has imposed these tariffs on steel imports, but the US actually exports more steel to Mexico than it imports!

The EU will suffer as a result of Trump's tariffs on steel, but the EU is the biggest economy on the planet.  The EU can hurt the US, in any trade war, therefore, far more effectively than the US can hurt the EU.  In  a trade war, even some of the things that the EU has previously been dependent on the US for, might start to be produced in the EU, undermining the longer term health of the US economy.  For example, the US dominates in things like technology, particularly in regard to computer software, via companies such as Microsoft, Google and so on.  The EU already objects to the activities of some of these companies, in terms of their anti-competitive behaviour, their tax avoidance policies and so on.  If the US engages in a trade war with the EU, the EU can easily strike back at those companies, and in the process start to create the conditions for new EU technology companies to develop as global competitors to the dominant US players, and after that happens the US would never get back its current dominant position, a position that is already under threat from companies developing in China.

But, what could the tiny, declining British economy offer up in resistance under such conditions?  Absolutely nothing.  The reality of the Tory claims about the UK being the sixth biggest national economy, would then also be exposed for the meaningless gibberish they are, in a global economy dominated by giants, and by economic blocs that long ago replaced national economies as the basis of competition and negotiation within that global economy.   Britain would be left simply apologising for those it sought to do deals with, in order not to frighten them off, or annoy them, in case they took the few crumbs from the table they provided.

That is also what is currently being seen with the Tories attitude to the activities of Putin's Russia on the streets of London, and other British towns and cities.  Whatever the intricacies of the financial and political ties between the Kremlin and other right-wing populists across the globe in the US, France, Britain, Turkey and elsewhere, and the extent of the financing of the political campaigns of those right-wing populists over Brexit, the US and French Presidential elections and so on, the fact is that the British government has been desperate not to scare away all of that Russian money flowing into Britain, particularly into the London property market that has been one of the factors in massively inflating London house prices, way beyond the reach of ordinary Londoners.

But, as I wrote some time ago that is the reality of the Tory Brexit vision for Britain, the transformation of Britain into a fourth rank economy, with low paid and precarious employment, sustainable only on that basis as a means of providing profits for the small capitalists that form the backbone of the Tory Party, and dependent upon the kindness of strangers, as the country's cities are turned into an equivalent of Batista's Cuba of the 1950's, controlled by foreign gangsters, and dependent upon their money to finance an economy based upon gambling, prostitution and vice.  That is the true vision of Tory Brexit Britain, that is increasingly being exposed by each day in which reality imposes itself.

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