No one wins trade wars. And it makes no sense to try. At long last someone has figured that out, most likely because a trade collapse has already started.
Please consider Sweden Holds Out Olive Branch to Brexit Britain.
Sweden has warned that it would be a serious mistake to chastise Britain for voting to leave the EU, appealing instead for an amicable settlement to minimise damage for both sides.
“The softer the Brexit, the better. We’re an open country and we are in favour of free trade, and we want to see a solution that is as beneficial as possible for everybody,” said Magdalena Andersson, the Swedish finance minister.
The olive branch from Stockholm reflects the shared view of the Nordic bloc that there is nothing to be gained from a fractious divorce between Britain and the EU.
The comments came as Swedish companies start to feel the chilling effect of the referendum campaign in Britain and the sharp fall in sterling. Data released this week show that Swedish exports to Britain are in free-fall, with a drop of 19pc over the period from January to July compared to the same period a year ago.
Pharmaceuticals fell 38pc, chemicals 23pc, and paper goods 15pc. “It’s amazing. If this persists, it will lead to fewer jobs in Sweden,” said Andres Hatzigeorgiou form the Stockholm Chamber of Commerce, speaking to Dagens Industri.
There are over 1,000 Swedish companies operating in Britain, employing 100,000 people, from Saab, Scania, and Electrolux, to Skype and Ericsson, to Ikea and H&M. “They’re worried about potential trade barriers and tariffs, and about the Swedish personnel,” said Ms Andersson.
Mrs Andersson hinted that there may be some leeway for creative statecraft once Article 50 is triggered and the picture becomes clearer. “We have to know what the British government wants, what is their idea of a new relationship with the EU, and then we can start discussing from there. This is all part of the negotiations,” she said.
“I can imagine there might be some cherry-picking within that. We should definitely not underestimate the complexity of the issue, and also the consequences,” she said.
British Pound vs. Swedish Krona
There’s nothing like a bit of export pain to get the head thinking clearly. No doubt German exporters are aware of the issue as well.
Will Merkel remain a stubborn goat, insistent on punishing the UK at a far greater expense to Germany?
- October 20: EU Sanction Madness and Merkel’s Blatant Hypocrisy
- October 20: Fascinating Look at Why Brexit Happened Through Eyes of Cameron’s Deputy Director of Policy
- October 16: The Right Approach to Brexit; Comparing One British Politician to Trump and Hillary
- October 13: European Council President Promises Salt and Vinegar for Everyone
- October 13: EU Seeks €20 Billion Divorce Settlement
Mike “Mish” Shedlock