Can anyone explain to me why these tariffs exist? Isn’t free trade mutually beneficial between allies?
I imagine the reason is to punish the UK to disincentivise others leaving the EU, but this seems too simple.
I imagine the reason is to punish the UK to disincentivise others leaving the EU, but this seems too simple.
In the case of environmental standards free trade between countries that do not have the same rules and standards makes it harder to prevent a "tragedy of the commons": I think that's another way of looking at it.
Probably an economist could give a better answer.
Such tariffs would address the issues you are talking about (and also eliminate a significant percentage of global political corruption), but I think they're actually in violation of international law.
All other tariffs aren’t - they are protectionist measures aimed at increasing domestic employment.
The inherent assumption here is that a trusted body can be established for a reasonable price that will accurately report these numbers so that the tariff can be enforced. This is a bad assumption both because of practical difficulties in many countries (try this in the DRC) and because one must often assume that the trading government is willing to subvert these tariffs.
In practice, the only practical solution is usually a flat tariff paired with diplomacy stating that the condition to revisit the tariff is building trust that these standards will be enforced on both sides.
> This overconfidence has failed to materialize, however, with carmakers finding themselves still hopelessly reliant on components from China and elsewhere to meet demand.
So the goal was to allow free trade between EU and UK on vehicles manufactured by either, but EU manufacturers are still sourcing too large a share of components from outside the EU so their vehicles don't fit the tariff exemption.
There are other political discussions happening about tariffs on EV imports from China to the EU which might address that as well.
The sugar cartels were (are?) the world's most powerful cartel, but the corn lobby in the US is similarly large. Even after the cartels take their profit cut from artificially inflating the price of imported sugar, it's still cheaper than domestic sugar or high fructose corn syrup.
So, the corn (and probably sugar) lobby paid congress to create massive import tariffs on sugar. Later Coke and Pepsi switched to domestic HFCS in the US in response.
These days, we know that HFCS is one of the root causes of the obesity epidemic, but it would be political suicide to let a 5-10 year reduction in population-wide life expectancy get in the way of the corn lobby's profits.
Similar stories exist for pretty much all tariffs.
For instance, when the Trump admimnistration increased tariffs on China, they also snuck in tariffs on wood from Canada. A very small group of people (that backed Trump in the election) control most of the wood production in the US.
The tariffs created a supply crash of lumber in the middle of the covid construction boom. At some point, the price of a plywood board was above $100 (up from ~$20 or less).
Most of that translated directly into profits for the timber companies. Of course, it also contributed to the housing shortage, but homeless people don't fund political campaigns, so that didn't really enter into the decision making process.
(edit: I realized that was unnecessarily partisan. Biden renewed/expanded the tariffs I'm complaining about.)
The origin of this tariff appears to be a desire to keep electric car production in the EU and stop it being outsourced to China.