EU’s shock plot to slap huge tariffs on UK goods as Brexit punishment will spark TRADE WAR

Posted on Mar 10 2018 - 7:53pm by admin

The analysis comes after a tense week of talks between Britain and the European Union.

Insiders revealed the EU is looking at bullying the UK into giving the bloc free access to the UK markets while potentially denying or restricting access for British exports with tariffs.

The plans were said to have been put forward by the European Commission.

But such a move would bring the bloc and Britain to the brink of a trade war, which could even lead to repercussions within the World Trade Organisation (WTO).

Professor Jens Holscher, Chair in Accounting, Finance & Economics at the University of Bournemouth, said: “Blocking imports isn’t in the interest of the EU or the UK.

“From a legal point of view, it would be a very, very dangerous act, as WTO rules don’t allow anyone to block imports unless they are able to show that the counterpart is causing damage or that the block is in their interest and can’t be avoided. 

“Failing to demonstrate that could even lead to an expulsion from the WTO, and nobody would like to find itself in that situation.”

This means the EU would not be allowed to discriminate against the UK specifically, as such a move could be seen as a punishment against the country for leaving the bloc.

Prof Holscher added: “This scenario is also unrealistic from a financial point of view.

“It is not in the interest of the UK or the EU to put an end to their economic exchanges.

“The UK is, for example, such an important market for German manufacturers, they don’t have the desire to cut their economic ties.”

The EU has significantly stepped up pressure on the UK this week after Brussels rejected Chancellor Philip Hammond’s bid to include financial services in the Brexit trade deal. 

And Brussels accused Theresa May of “cherry picking” to get the best possible deal for the UK.

In response International Trade Secretary Liam Fox has accused Brussels to act “like a gang” by trying to bully the UK in the negotiations.

Mr Fox said: “Punishing Britain to me is not the language of the club, it is the language of the gang.”

Market analyst and CEO at Explain The Market, Guy Shone, believes it is “possible but unlikely” for both the EU and the UK to arrive at a breaking point where one decides to walk away from the negotiations and even punish its counterpart by blocking imports.

He said: “Right now, to both the UK and the EU, it is really only worth talking about what is politically possible.

“No deal at all is unlikely because it would hurt all protagonists politically.” 

He added: “However, in the final few months of negotiations is likely that both sides create the impression that worrying outcomes are very likely indeed.

“This is all part of a relatively natural process where deep down both sides know that the real detail of the deal will only get seriously worked through at the eleventh hour.

“Publicly presenting an image of hungry to ‘get on with it’ and frustrated at your opponent while privately waiting for the last minute before material discussions take place seems to be the generally accepted policy on both sides”.

The UK has found an ally against the “bullying” attitude of the EU in newly-elected Lega leader Matteo Salvini, who on Wednesday said he would “very much hope it will be possible to maintain completely open trade with the EU without any penalties”.

Lega’s economics chief Claudio Borghi added that it would be “sheer stupidity” to punish the UK for leaving the bloc.   

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