A quick explanation of the Steel and Aluminium tariffs in my Substack below and why the US UK agreement is more important for the UK than the Reset.

catherinemcbride.substack.com/p/the-steel-bo… 2. The last line of the passage above is extremely important. The US is not the chump that some UK politicians seem to think it is. The US-UK EPD did not grant the UK the ability to bank the US largesse and then cosy up to the EU, or China. The removal of the US Section 232 tariffs on UK steel and aluminium exports was conditional on the UK meeting the EPD’s requirements for secure supply chains, including the ownership of the production facilities.

At a Westminster Hall debate last Thursday on the UK’s trading relationship with the EU, rejoiner MPs attempted to sway the government's trade policy. However, most of the MPs were repeating conjectures, half-truths and urban myths as facts, and a few told some outright lies. Here is a🧵with some correct information. 1. ‘Deep alignment with the EU for goods and services could benefit UK GDP by 2%’

This is not a fact, it is a guesstimate, from a paper written by a group called Frontier Economics and paid for by the Rejoiner organisation, Best for Britain. The paper was written in February 2025, and it assumed that the UK and the EU would both have 20% tariffs applied to their exports by the US. We now know this is not the case.

The US is applying 20% tariffs on EU goods but only 10% tariffs on UK ones, with the exception of cars, and some iron and steel and aluminium products which are universally tariffed at 25%. As the papers general assumption is wrong, why are UK MPs repeating it’s guesstimates as fact?

The paper also only made guestimates about the change in UK exports if it aligned ‘deeply’ with the EU. The paper didn’t mention that such an alignment would also increase imports from the EU.

The Frontier paper defined ‘deep alignment’ as ‘mutual recognition’ and ‘a commitment to minimise regulatory divergence.’ In other words, dynamic alignment with EU regulations.

The UK was recently a full member of the EU and, despite total alignment, the UK’s largest export market for both goods and services was the United States of America, which is not a member of the EU. UK goods exports to the US have grown by 12% since 2018. While US service imports have grown by 75% since 2018 and are 27% of the UK's total service exports andalmost five times larger than service exports to Germany or Ireland.

Service trade tends to be largest between countries with the same language, similar tastes in music and films, aligned financial regulations, common law systems, accounting systems, and a shared attitude toward ‘Anglo-Saxon Capitalism’. Only Ireland in the EU meets any of these criteria, although UK service exports to Ireland likely stem from the numerous US companies based there for tax purposes. If Trump lowers US corporate taxes to 15%, matching Ireland’s rate, UKservice exports to Ireland will probably plummet.

But the question remains, if deep alignment is so great, why didn’t it help UK goods and services exports when we were EU members?

A 🧵about trade, tariffs, inflation, microeconomics and why @realDonaldTrump has made a very smart move on the trade chessboard.

The US is the world’s Apex consumer.

The US can’t negotiate trade deals if its trading partners already benefit from liberal access to the US market.

Why would their trading partners bother? The mercantilists, who believe imports are bad for their economy (I don’t, by the way), can presently sell into the US’s massive consumer market without buying anything in return.

A trade agreement would force them to open their market to US goods – the mercantilists don’t want that.

By applying tariffs of at least 10% to every country, Trump just gave himself a lot of trade agreement bargaining chips.

A sensible country, hopefully like the UK, will immediately start negotiating a trade agreement with the US and accept that it must now allow more US goods into its market. The less sensible, like the EU, will threaten to apply even higher tariffs to US goods, but this won’t have much effect on US exports because the EU mainly imports US goods with zero tariffs such as fuel, soy and pharmaceuticals.

This is due to the EU’s already high tariffs and many other trade barriers on US goods such as its unscientific SPS regulations. If the EU increases these tariffs, it will not be a large blow to US exporters.

However, the UK should not be too relaxed: the USTR report does warn that the UK has retained many of the EU’s ‘unscientific’ SPS regulations, as well as some EU technical trade barriers.

The USTR’s research was done when the UK was moving away from the EU’s precautionary principle. If the present UK government decides to align more closely with the EU, we shouldn't be surprised if our US tariff rate is increased to the EU’s 20% level.

With the OBR hanging on to its expectation that Brexit will ‘reduce the overall trade intensity of the UK economy by 15 per cent in the long term’ (2.54 in their March 2025 report) – it is worth examining this figure.
The OBR initially said that trade, imports and exports, would fall by 15%, but then they changed it to trade intensity. So what’s the difference?
🧵 Trade intensity is total trade (exports plus imports of goods and services) as a proportion of GDP. Adding exports and imports is a strange idea. The mathematically astute readers will immediately understand that, as trade intensity is a fraction, it could fall due to a drop in the numerator or by an increase in the denominator. The OBR wants us to believe that any change could only be due to a change in the denominator….

(When I studied economics, we always subtracted imports from exports to calculate the trade balance, deficit or surplus. But hey... After 50 years of letting Brussels handle the trade details, I am sure that the OBR knows what they are doing.)

The FT headline declares: UK trade volumes suffer record five-year decline. But Looking at the graph below I find that hard to believe.
Although in the text of the article, they do a quick bait and switch from the article's headline and reduce 'trade' into 'goods trade', ignoring the UK’s booming service trade.
A short🧵about UK trade follows:

via @ftft.com/content/6d044f… The FT has published a chart of 5-year rolling percentage changes to declare the five-year percentage change between 2018 to 2023 as the worst since 'records began' (in 1997).

But they are only counting total goods trade, exports plus imports, and to all destinations both EU and non-EU, (excl. precious metals, in CVM)

They also forgot to mention that 2018 was the highest year for total goods trade (excl. precious metals) since 1997.

I guess that is why they didn't compare 2023 to 2019, the last year before Brexit. Had they done so, 2021 would have been the worse year fall since 'records began'

On the 4th anniversary of Brexit, it is worth looking at what has happened to UK trade.
These figures are UK imports and exports for total trade, that is goods (excluding precious metals) and services, imports and exports to all destinations. ONS Chained Volume Measures. The big drop in 2020 turned out to be due to Covid, not Brexit. If we look at UK exports we can see that we now export more services, the red line below, than goods, the blue line.

A short 🧵 about the UK Aust FTA:
1. Australia has dropped all tariffs and quotas on all UK goods with the exception of some steel coils and pipes and some UK cheeses, both will need to wait for 5 years and 6 years before Australians can import them completely tariff free. 2. Unlike Australia, the UK is retaining its tariffs, quotas and PSS on Aust food for many years:
Beef - 15 yrs
Sheepmeat - 15 yrs
Dairy products - 5 yrs
Wheat - 5 yrs
Barley - 5 yrs
Sugar - 8 yrs
Fruit & veg - 4 to 8 yrs
This is bad for UK consumers but good for the EU farmers

CPTPP MythBusters
Myth 1: The UK has taken a 4% Brexit hit for an 0.08% CPTPP gain
UK’s GDP increased from £2.24tr in 2019 to £2.49tr in 2022 an increase of 11% in current prices but unchanged when you account for inflation. But still not a ‘4% hit’.

briefingsforbritain.co.uk/cptpp-mythbust… 2. Myth 2: there is no need to join the CPTPP because the UK already has trade deals with 9 of the 11 CPTPP members
some of those trade deals are not full FTAs while others were negotiated by the EU, and so benefited EU businesses generally rather than the UK specifically.

Heath: 'Sunak also massively oversold his agreement. The document in which he gives his version of what has been achieved is almost unrecognisable to the EU’s own explanation. His claim that 1,700 pages of EU law are “disapplied” is false.'

telegraph.co.uk/news/2023/03/2… 2. The Windsor Framework’s changes to the Protocol are cosmetic: the EU has made a series of practical concessions to alleviate certain, narrowly defined problems, but these can be withdrawn at any time.

Farr: 'The PM can rely on lazy MPs and journalists to skim the government’s blatantly misleading Way Forward “explainer” instead of reading ... the legal text… to find that every single word of the Windsor Framework is new European law.'

express.co.uk/comment/expres… 2. 'There is nothing for Parliament to debate, because the Windsor Framework is being implemented in Brussels through ten new EU laws. The only consent in the UK – after a 90-minute debate – will be on a Statutory Instrument to insert the “Stormont Brake” into the NI Act.'

Damming legal report on #WindsorFramework

• increases the power of the EU over Britain.

• there are easings of the arrangements for trade, but these are all at the behest of the EU, the EU can pull the plug anytime they want.

express.co.uk/news/politics/… 2. On sovereignty, they said: “Northern Ireland remains subject to the power and control of EU law, the Court of Justice of the European Union (ECJ) and EU administrative organs (such as the European Commission) in respect of goods and ancillary matters."

Barrrett: 'The Windsor Framework is not a ‘compromise’ to bring an end to Brexit – it is the transfer of control to the EU. Some things cannot be compromised on – no matter how hard people try. The UK can either govern itself or let the EU do it.'
spiked-online.com/2023/03/20/the… 2. 'Windsor Framework, Sunak’s renegotiated version of the NIP, gives the EU control of NI and by extension, control of the UK. It essentially torpedoes the UK-EU trade agreement, destroying any notion of a relationship between equals, and it returns the UK to law-taker status.'

The Windsor Framework has been grossly misrepresented by the UK government to disguise that it has agreed to implement in full checks on GB-NI trade which have not been enforced under the grace periods

The Windsor Framework – a legal and democratic sting briefingsforbritain.co.uk/the-windsor-fr… 2. It has also agreed to grant rights under EU law for the EU to be consulted on UK goods & tax legislation so the EU can monitor potential competition risks with its SM. This is not needed for NIP operation but is an EU demand specifically excluded in earlier negotiations.

1. 'Debriefing the European Parliament’s Brexit committees on the “Windsor Framework”, Maros Sefcovic said the [Sunak’s] pact was simply designed to avoid negative headlines in the British press, and would not hand back full sovereignty over the region.'

telegraph.co.uk/politics/2023/… 2. “This [Stormont Brake] is very much limited in the scope, and it's really under very strict conditions,” Mr Sefcovic told them, according to a recording obtained by The Telegraph.

A short thread on Taxes.
There are surprisingly few higher rate taxpayers in the UK. In 2021/22 a mere 563,000 people paid the additional 45% rate, that is only 1.7% of all UK taxpayers and about 0.8% of the UK population. 2. But despite making up such a small part of the population the additional rate taxpayers are expected to pay 36% of all income tax in 2022/23, (£89.2bn out of £251 billion). The economy relies on the tax contribution of this tiny proportion of the population.

Foy: 'The LDI issue that led to the Bank’s emergency intervention on Wednesday points to a blindspot at Threadneedle Street that goes as far back as when Carney was Governor, working alongside then-Chancellor Philip Hammond.'
telegraph.co.uk/business/2022/… 2. 'Carney was happy to chime in on the chaos that ensued following Kwasi Kwarteng’s controversial mini-Budget... Yet alongside the warning from Next in 2017, the Bank’s own officials said a year later that LDIs risked triggering a pension market crisis. '

Excellent article by Sherelle Jacobs: 'Put simply, while Britain claims it is poised to escape the legalistic clutches of the WA, the EU claims that its con trick to keep Britain in its orbit is so watertight that this doesn’t matter.' telegraph.co.uk/news/2020/10/0… 2/4 The EU could pull off the same ruse with the level playing field – with a deal that spares Britain the embarrassment of having to align with EU rules in principle, while compelling it to align de facto.
The outcome risks being the same,

no deal could mean lower prices for food and consumer goods like clothing and footwear – if the UK drops high tariffs on imports from outside the EU which EU forces UK to impose. Dublin has previously admitted there won’t be new physical infrastructure in sensitive locations. And as for Juncker’s claim that no deal would split up the UK, more Scots voted to Leave in the 2016 than voted for the SNP in the 2017 general election.
With Labour threatening an SNP alliance in return for indy ref 2, the Conservatives could do well in Scotland too.

It’s more than just the backstop,
Problems with the Withdrawal Agreement:
1. Restricts Parliamentary independence - (Articles 4, 87, 89 and 127).
2. Replaces one Commission with another - (Article 159) and (Article 164).
3. Prevents independent arbitration (Articles 168, 174) 4. Grants EU officials immunity (Articles 101, 104, and 106-116).
5. Imposes a gagging order on the UK (Articles 74 and 105).
6. Leaves the UK with EIB risks but no profits (Articles 143, 147, 150).
7. Prevents an independent trade policy (para 23)(Article 127).