I notice this on Blue Sky this morning:
Trump is threatening 25% tariffs on the EU because he says VAT is a tariff on US goods, which it very clearly is not. The Telegraph is lining up to support them, not noticing that the UK, although outside the EU, has the same tax system as it and is, as a result, bound to be subject to the same tariff charges.
So blind is the hatred of Brexiteers that reality no more crosses their path than it does that of Trump, whose claim that the EU was created to spite the USA is utterly absurd. It was actually created to promote the neoliberal concept of free trade, which he supposedly espouses. But he is too stupid to notice that.
This is the world we live in now.
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My second musical quote of the day, which for someone with no real interest in music is quite something
‘The Lunatics have taken over the Asylum’
The USA exploits the world. Period.
Thank you and well said, Ian.
What did the EU expect? For example, what did the EU do when it turned out US intelligence was spying on its leaders, in cahoots with their own intelligence officers?
What did Germany do when Nordstream was sabotaged? Do readers remember the tweet from Polish foreign minister Radek Sikorski (“Thank you, USA.”)? Why would Russia bomb that pipeline when it can turn the supply off at the mains in Russia itself. In any case, the west continues to buy oil and gas from Russia and call it Azeri, Indian and Turkish and pay a premium.
NB My employer, which banks the diamond industry, got a delegation of merchants from Antwerp to visit the European Commission and get Russian diamonds and Alrosa exempted from sanctions as it “would affect the welfare of that community”.
This is the latest chapter that began with that nice Mr Obama’s “pivot to Asia”.
The EU should have promoted multipolarity instead of holding on to Uncle Sam’s coattails and hoping to reap dividends forever.
The EU also exists to further international cooperation among the nations of Europe. The nations of the EU have not fought each other in 80 years. That is a considerable achievement.
This is all, to lapse into the vernacular, piss & wind & yet another diversion.
The EU would be well advised to cold shoulder the USA in all spheres. I don’t normally agree with US idiots, but for once this one is dead right (extract from Politico morning briefing):
“One of Trump’s allies in Congress, Republican Dan Crenshaw, has a message for Europeans complaining about the administration’s new approach to Ukraine. He told POLITICO’s Power Play podcast: “Why don’t you take the $200 billion in frozen (Russian) assets and actually seize them? Europeans are like, ‘Oh well, we can’t do that.’ Then shut up. That’s why you don’t have a seat at the table.”
sieze the assets, use some for weapons for Ukraine, and a large amount to re-build Ukraine. That would put Trump & co on a back foot and render the need for Ukraine to do a deal – minerals for US weapons – moot. & as for – yes but the US would not supply weapons – well if a US weapons company has somebody knocking on their door with $10bn in their hands I rather doubt they would be turned away. As Chomsky noted wrt US support for Israel and the Israel lobby in Washington – in fact the most significant lobby is the weapons suppliers – who make very good money supplying Israel. Same would apply wrt Ukraine. Confiscate the Euro200bn and start buying/investing.
I agree with you
Thank you, Mike.
I don’t disagree and would like to add that some of the reticence comes from the following:
US firms pay well and are prominent lobbyists in Brussels and, increasingly, Frankfurt and Berlin. US financial institutions, law firms and consultancies are spreading from Frankfurt, e.g. Munich, and getting vocal on German boards, even having investee strategies and policies (like compliance) challenged by their professional advisers.
The US machine is well organised in Europe (French American Foundation, German Marshall Fund and European Council on Foreign Relations etc.) and can make life difficult by getting its proxies to attack.
Much of the European elite, including the former PM I referenced on another of Richard’s posts this morning, bank with and / or have their investments managed by US institutions.
The European elite is increasingly Americanised, “deracinated”. Its children are often educated in the US.
There’s still a view that this is just Trump and it will pass, i.e. things will get back to normal.
The European elite is scared of multipolarity for historical reasons. It does not wish to treat the likes of China, India and Brazil as equals. It can’t even contemplate the new world that is being born.
What could dislodge the dollar from it’s hegemonic position? What will it take to bring about multipolarity? If, by some wonderful miracle we could re-join the EU is there a likelihood of joining the BRICS as a bloc?
Countries not wanting to trade oil in dollars
The list of orgs provided by Col Smithers is both useful and interesting.
They plus others run grooming programmes for “young leaders” – which nicely links to the points made about deracination. I know some young people here in Belgium who are very very unhappy with the politico-aristos that run the show (e.g. sonny inheriting from daddy at the right time – the “Socialists” are particularly adept at this). One could consider the AfD as a symptom of unhappiness – usual suspects saying the usual nonesense time after time.
Genuine question.. To the US consumer why is VAT not like a tariff ? Both VAT and Tariffs increase prices to the overseas consumer and raise revenue for the Govt imposing tariffs or VAT.
The US will have a tariff and local sales taxes, although they vary from state to state.
We only have a VAT.
And if we did not charge VAT on imports we’d be favouring them over locally produced product. Wew don’t put a tariif on imports. We create a level playing field for all products irrespect8ive of where made.
The US will be creating a doubnle charge. People are going to love that.
VAT applies to all goods and services sold to customers in the UK and the EU (by and large, there are some exceptions) whether they are sold by UK or EU businesses or by US or other overseas businesses. Tariffs are only charged on imports.
If Trump’s tariff is like VAT, is he proposing to charge the same 25% tariff on sales by US businesses to US customers? Of course not.
There might be a point if he wanted to talk about an implicit subsidy (sales outside the UK – or EU – do not bear VAT but do permit recovery of input VAT). But VAT is explicitly not a tax charged only on US imports.
But that is fine. Trump wants to increase the price paid by US customers buying European goods, and encourage them to buy more expensive US substitutes. It will harm sales but will harm US customers just as much or more.
I remember 12 years Paul Krugman trying to explain to libertarians the difference between VAT and tariffs. He wasn’t successful. They see themselves as a victim of both US federal government and by foreign states. Such narratives are extremely resilient to facts. Paul Krugman was writing academic papers debunking this “economics” in 1990! Unfortunately, being right on economics doesn’t make any money otherwise the market would have bankrupted these charlatans long ago. Sentiments are driving the argument. They want the EU to fail.
I have tried to explain VAT to US clients in the past
More than 150 countries in the world have one. To the US mind they are impossible to comprehend. I suggest the problem is with the US mind.
My USA Yank mind does not understand VAT either!
It’s simply an end consumer tax, with no net charges through the suoppl;y chain in most cases
That’s why it is not a tariff
Thank you Richard Murphy for giving me a much needed laugh! I had 4 teeth out on Monday and my jaw is still aching, so it was a fairly quiet laugh – but very welcome none the less!
Ow!
The American government has always – ALWAYS – disparaged anyone who they feel cannot allow themselves be exploited in some way.
Look at America’s history with China, even before Communism. It’s very instructive.
America’s government has always been bullying, hectoring, leveraging. Its growth as a power has been based on domestic theft anyway.
It tries to take its domestic expropriationary attitudes abroad and with some success and cries like a spoilt brat when it does not get its own way. Expropriation is the only way the American government knows how to do business as well as helping its corporations to rob its own decent and hard working American citizens on a daily basis who are no different to any of us being robbed over here.
Actually what is now the EU was created to prevent warfare amongst western Europeans, but I agree that the Neolibs have won the struggle to define what the EU is.
In the 1980s there was significant work done on the social chapter and getting all Europeans sharing the same living standards.
Hasn’t worked out as Delors en co envisaged but we have known unprecedented peace in the EU.
Keep your eye on the new iteration of the SDP – it used to be pro-European now it supports Brexit.
Its leader William Clouston seems to be promoted by some sections of the media including Murdoch’s Talk radio. He’s also tight with some of the Tufton street mob. Very hostile to the welfare state and foreign aid.
All very odd for someone claiming to be a “social democrat”.
They are nothing like social democrats
Thank you, both.
May be like the Brazilian and Portuguese Social Democrats (PSDB and PSD), nothing like a Richard Social Democrat.
Glad you agree
Thank you to Mike above.
Mike is right to highlight the political aristocracy and young leader programmes. These programmes are rolled out around the world. The prospect of a scholarship, green card and US pay is tantalising.
These US proxies make a point of recruiting retired politicians and civil servants, e.g. Gerard Araud, and aspiring politicians, e.g. Benjamin Haddad. The programme became urgent and more intense after most of Europe stayed out of Iraq in 2003. The US could not risk that happening again.
Readers on the continent, especially France, may note the increasing prominence of Dominique de Villepin. His Gaullist views are a threat not just to the US, but the EU and even Israel. Please watch the proxy attacks on him. Last year’s shots across Villepin’s bow has not worked.
For readers in Scotland, you may want to check how many Scottish MPs and MSPs have been on them. I have heard that one, an MSP and former minister, was caught in flagrante delicto in DC and been on the spook books since.