Here we are again approaching another cliff edge, wondering how world trade will be affected when we leave the EU – possibly in about 3 months’ time. We have tried to get our thoughts together on the possible outcomes.
What Happens if We Reach A Deal?
Hopefully, any deal made will reflect and protect the special trading relationship we have with our European partners and it will be business as usual. At Hy-Pro, this is the result we are hoping for and we will be keenly observing the progress of further negotiations with the EU.
What Happens if We Don’t Reach A Deal?
Prior to our previous departure date in March, Ministers stated that, during a transition period, there would be no tariffs on 87% of goods being imported, the exceptions being farm produce, underwear (strangely) and finished cars. This was controversial at the time but might prove to be a short term way forward.
However, if the EU decides to impose tariffs, the UK would have to reciprocate. Given that EU imports to the UK are worth 2.5 times more in potential tariffs than the UK exports to Europe, the EU has the most to lose, potentially nearly £13 billion. Europe will have to reduce costs or lose sales to the UK in many cases. This would be catastrophic for the German car makers in particular and it is a situation which they would wish to avoid.
Conversely, due to the falling pound following a ‘no deal’ exit, British goods may well be cheaper in Europe despite tariffs. The UK would also be able to negotiate tariffs worldwide in a way that is aligned more to our best interests.
Conclusion – what are we going to do at Hy-Pro?
It is business as usual at Hy-Pro. We are still investing in new machinery, people and additional premises. We feel there are opportunities for us, with our without a deal, and we will make the best of them. We are continually working on reducing our costs to minimise any possible negative impacts on our customers. We are also maintaining inventory to insure against temporary problems at the ports when we leave the EU. We are currently exporting all over the world, not just to Europe, and there is nothing to fear from non-EU exports (there is actually less paperwork!).
Please visit our www.hypro.co.uk to read more about us and our products.