Ed Davey has responded to Donald Trump’s announcement of tariffs with various countries.
He said:
Today Donald Trump has launched a destructive trade war that threatens the jobs and living standards of people across the UK and around the world.
We need to end this trade war as quickly as possible – and that means standing firm with our allies against Trump’s attempts to divide and rule. The Prime Minister should bring our Commonwealth and European partners together in a coalition of the willing against Trump’s tariffs, using retaliatory tariffs where necessary and signing new trade deals with each other where possible.
If the Government gives in to Trump’s threats, it will only encourage him to use the same bullying tactics again and again.
On Peston he called for an EU/UK customs union and for an economic coalition of the willing to stand up to Trump. He also said we should work with our Commonwealth allies.
He says that we need to bring countries together because this is going to impact all the world together. He says that retaliatory tariffs were a possibility but the most important thing was to protect free trade amongst ourselves. He warned that if we didn’t do that, we could lose free trade for a generation. He says free trade is a force for good and has been responsible for prosperity across the world.
Peston asked if we could face retaliation from the EU if we were too cosy to Trump. He said that we should not allow Trump to move forward with a divide and rule strategy. We need to work together with our allies in the Commonwealth, Europe and Asia to enhance free trade.
He took down the Brexiteers’ claim that this was a victory for Brexit because we were less stung than the EU.
If they think it’s a good thing to have extra higher tariffs on our exports, if they think it’s a victory for Brexit that we now have 25% tariffs on our car exports to the US, they live in a very different world from my world and the world that the British people live in. This could result in higher inflation, higher interest rates, lower growth, lower living standards and if Brexiteers are celebrating that I think that tells you all about their analysis. I feel that the poor trade deal that Boris Johnson signed with the EU has already hit our economy very badly. Already prices are up and growth is down. In a way, though, it gives us a way out of the Trump threat. Let us rebuild that trade deal starting with a customs union. That could have a real boost to our trade and to our growth and show that we can work with people.
Follow @libdemvoice.org on Bluesky
Like us on Facebook
Subscribe to our feed
Sign-up for our daily email digest
"The old savage England": D.H. Lawrence visits the Stiperstones
Church Green video
Thinking of standing for election or re-election next year? Helpful questions to consider
Endometriosis and acetylation
Nonconformistradical
Henry
Daniel Walker
David Raw
10 Comments
John Bright called free trade God’s diplomacy.
👍
“The Prime Minister should bring our Commonwealth and European partners together in a coalition of the willing against Trump’s tariffs, using retaliatory tariffs where necessary and signing new trade deals with each other where possible.”
I applaud the first part of Sir Ed’s sentence, but have reservations about the second. Retaliatory tariffs are exactly what caused the 1930s recession to be as deep and as long as it was. – all countries trying to export their unemployment. Maybe it is better just to sit quiet for a while, wait until American consumers realise they have been duped and get tried of paying higher prices for our products, Trump moves on to anther fad and the whole thing blows away.
The Adam Smith Institute has weighed in with some criticism of Sir Edward Davey here:
https://www.adamsmith.org/blog/so-ive-decided-to-shoot-myself-in-the-foot-now-what
He’s now remote from the party that endorsed Unilateral Free Trade in the 19th century, and wants to use ‘retaliatory tariffs’ against British consumers. No thanks Sir Edward, Peter above has the best suggestion politically.
John – Are you seriously saying the Liberal Democrats should take advice from the Adam Smith Institute? The ASI isn’t a friend of the LDs. It believes in political positions that do not reflect Liberal Democrat values. Complely free trade? No thank you
John, thanks for the link to the JSI. here’s a quote from their article:
“The effect of tariffs is very clear. Unemployment will rise, productivity will fall, profitability will suffer, resilience to future shocks will be exposed and output will be hammered. Ultimately, they make the imposing country poorer. The below graphs demonstrate the economic reality of tariffs.”
Absolutely right.
Tim: Liberals should not condemn a valid message becasue we don’t like the messenger (though I do agree that free trade can go to far. It was, with hindsight, , unwise for Europe to become too dependent on Russian oil for its energy supplies.
Sorry, I meant ASI, not JSI. Mixing it up with John Smithson
@John Turning – “He’s now remote from the party that endorsed Unilateral Free Trade in the 19th century”
The world has moved on and changed greatly from the 19th century. Perhaps the ASI would like the world to be returned to the 19th century…
There are universal truths in economics. Examples are that fair trade is free trade and you don’t throw rocks in your own harbour because the country next door has rocky coast lines. We have two examples from the late 20th century that UFT works out all right in HK and SG.
But seriously Roland, just because the world has moved on from the 19th century in terms of sanitation, communications and much else, that represents an argument that the Adam Smith Institute and Bastiat and many others are wrong about trade policy from that time. That’s not really an argument.
@John Turning – My observation was that the modern Liberal Democrat party (founded 1988) is not the same as the Liberal party formed in 1850. Additionally, we do need to be mindful that the form of free/fair trade envisaged back then was very different to what we would regard as free/fair trade, before Trump upset the consensus around the rules based world order.
>There are universal truths in economics.
Economics is a pseudo science, a formula that worked in one era may not work in another.