I read with a sense of deja vu the letter by Tim Worstall (6 November) in which he suggested that charging zero tariffs on imports would make us richer. I’m still confused about how this might be the case.
True, charging zero tariffs on foreign goods should make them cheaper, provided that we ignore the drop in the value of the pound associated with Brexit (which, of course, makes imported goods more expensive), but how do we pay for these goods if other countries insist on tariffs on our products, potentially reducing our exports? Further, as tariffs are a form of tax, how might we compensate for the loss of revenue?
Surely zero import tariffs with existing export tariffs would adversely affect our trade balance, and make the country – or at least those of us who are not rich – poorer. Imports alone do not generate wealth for any but the few rich importers. Or is that the point?
It would seem to be logical that it is not imports that is the problem in post-Brexit British trade, but exports, with the tariff and non-tariff barriers to trade.
Lowering tariffs makes things cheaper. The only people who benefit from this are the importers, not the consumers of the imports?