We reveal the rather recent changes to the secret “reasonable worst case scenario” assumptions for No Deal Brexit trade flow that are the foundation for the Government’s No Deal planning.
...last year Government’s reasonable worst case scenario (revealed to industry under NDA but not public) for trade flows across Channel was incredible fall of 75% to 87% - so only 2 in 10 lorries flowing.
That was improved to 50-70% in April
& 40-60% in past few days BBC told
/1
...reason is really rather interesting - original catastrophic assumption done without French cooperation - on basis of 100% manual customs & regulatory checks (& required officials studying satellite photos of French ports)...upgrade has come as a result of new French facilities
... what this means in practice though is instead of 8000 lorries a day stuck either side of the Channel in a reasonable worst case scenario, and queuing capacity in UK filling up in days, it is more like 5000, which would fill up space in a fortnight... /3
...so in less catastrophic worst case scenario territory rather than actually good ones. But if you re a glass half full person, you might welcome progress...my understanding is that medicines suppliers think the disruption will be significant even with a 20% reduction in flow /4
Logistics providers think assumed flow rates shd be further improved - but totally contingent on trader prep. Companies can be prepared as they like, but if the lorry in front hasn’t got an EORI number its still a queue... depends on whether small companies have the cash /5
Freight Transport Association point out that the support for traders from UK Government is just £750 per company - equivalent to two hours training on how to fill customs forms they never have before had to. Massive shortage of customs agents though etc /6
Other industries - eg food - far from convinced on Government extra optimism - and so for example, asking for competition policy changes for possible food supply coordination - my other report today /7
The really big point here though - that the original 2 in 10 assumption already assumed the waiving of all checks into UK at Dover/ Folkestone - the improvement comes from what was done on the French side - rather vivid example of how this really depends on Paris /8
Former Sainsburys Chief Justin King on @BBCNewsnight responds to our story on the governments internal assumptions on cross Channel trade flow, revealed to BBC news:
FTA’s EU freight expert @S_LD_ told me in Calais about UK firms servicing European supply chains at 6 hrs notice with zero paperwork, now being told to
- get a customs agent (none available)
- needing 24 hours notice
- have to provide detailed inventory, eg weigh their supplies
For Just-in-time (& oft forgotten but equally important just-in-sequence) delivery of parts - this delay v tricky. £ slide helps a bit maybe.
Point tho not just basic EORI number required - each export will need new paperwork
EORI just base level prep & majority haven’t done it
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🚨 Mind blowing interview with Turing award-winning Yoshua Bengio for @BBCNewsnight one of the three founding fathers of AI, is now warning:
“The worst-case scenario is human extinction.”
AI isn’t just risky — it could end us.
1/10 🧵
📺
2. 🤖 He warns that today’s most powerful AIs are already learning to lie, cheat, even blackmail —
because we’ve trained them to win.
Bengio reveals AI's "scary behavior" & self-preservation tendencies. #AI #AISafety #Blackmail
📺
👁️ In chilling experiments, AI lied to a human to get its task done, says Bengio
🤖 blackmailing an engineer after reading in an email it was going to be replaced.
♟️ choosing to hack a computer to win a chess game
US customs messaging note quietly slipped out last night shows that smartphones, the number 1 Chinese export to the US by value last year, exempted from the 125% tariff… alongside chips, processors, wafers, lcd panels, LEDs etc…
8517.13.00.00
Smartphones
US has excluded the single biggest Chinese export, and certainly the most high profile finished good from the tariffs, without publicly announcing it…
Avoiding the very public repricing of IPhones etc across Apple stores, but only in the US….
While obviously smartphones/ iPhones being exempted is big news for now…
Here’s full list of exemptions according to Harmonised US tariff codes that I plugged into its database… lots of semiconductor parts, circuits, processors, solid state storage, flat panel touchscreens 👀
Author of Mar A Lago accord concept that US tariff agenda is basically designed to cause negotiated dollar weakening, (now WH chief economist), gave speech yday which basically suggested that reserve status for dollar was a burden which others might need to “write checks” for
turns on its head the famous description of ex French President then fin minister Valéry Giscard d'Estaing the US enjoyed an “exorbitant privilege” with $ reserve status…
Instead Administration appears to believe this is an exorbitant burden for which US should be remunerated.
It’s part of a narrative that seeks to paint new tariffs (accepted without retaliation) as justifiable payment for burden of strong dollar (eg on US manufacturing exports and jobs)… this new mindset is extremely consequential. The tariffs aren’t going.
President just shared a video on Truth Social saying “Trump
Is purposely CRASHING the market” in order to lower US Treasury yields and the dollar.
The Mar A Lago theory I wrote about two months ago, written by his chief adviser that said tariff chaos would lead to $ deal
Here’s the video…
Dow down another 1000 points…
Obviously RT are not endorsements but why is the President choosing to share this stuff? And if you are another country seeing this, how do you negotiate with this?
👀 From Navarro’s numbers auto tariffs will raise $100bn a year (on $240bn imports) can replicate this calculation by assuming all imports hit by 25% and then US manufactured cars taxed about half that to reflect foreign content…
No exemptions tho…
…that assumes no behavioural change.
Note: will be a lot of behavioural change in supply and demand.
also says tariffs in general will raise $600bn a year of $6 trillion over a decade.
As total goods imports are only $3 trillion a year… “Liberation Day” equivalent of 20% universal tariff??
👀
Indeed Washington Posts chief Econ writer reports President instincts are to go bigger on “Liberation Day” … are we underpricing the return of the universal tariff? It would explain the otherwise inexplicable Navarro numbers this morning,..