The answer might be to knock off 10% before adding the 10% very approx.
You mean the producer of the goods has to make a 10% cut in the price they sell for, so that the EU can then mark the price up by 10% again? Not sure many manufacturers will be keen on that - depends on the profit margins but if they ain't making 10% profit to start with then they won't be able to cut their export price by 10%.
WTO, 10%. Are you saying that the cars and agricultural products we sell to Europe will be 10% more. ..?
Does it work the other way round? E.g. will BMW s be 10% more and will Spanish tomotoes be 10% more?
Cars are 10% more, so yes a car built in the UK will cost 10% more in mainland Europe after Brexit. And a car built in mainland Europe will cost 10% more in the UK after Brexit.
Agricultral products have much higher tariffs. Skimmed Milk is 74%, Butter 63%, Wheat 53%, Cheese 43%, Frozen Beef 160%.
Still, since it appears most farmers voted for Brexit then I assume they realise that it may have some effect on their exports, so won't be complaining too loudly if it bites them
Sorry I still don't understand.
Here is an example.
Germany makes a BMW to sell in UK for £100000 (keeping figures simple.)
Post leaving EU the car now costs £110,000. Who got the £10,000? (I am guessing the UK government)
UK farmer sells £1000 worth of beef to Portugal. It now costs £1600. Who got the £600?
My point is in a scenario like this I dare say the rules don't allow direct subsidies e.g. BMW get £10,000 for every car sold to the Uk , in effect allowing them to sell them for approx £90,000 each making them approx £100,000 still to the end user.
However I suspect there would be very little to stop a Uk government subsidising beef farmers on
every kilo of beef sold to in effect negate the price hike on exports.
If the agricultural products are so much higher then that will badly affect mainland European farmers. Spain produces an awful lot of stuff for the UK market. I believe the French send a lot of milk.
I know a bit about olive oil and the price in Europe is artificially high to support farmers (as per Jimmy's example Spanish farmers get tremendous grant help. At the moment they are drilling wells using other peoples(our) money to irrigate olive trees).Morocco is a producer at a fraction of the price but EU rules don't allow very much import. There is a small amount due to the special Spain/Morocco relationship. So straight away there is a Morocco/Uk market for half price olive oil post exit.