"Brexit" began to drag down the British economy

Posted by qianjiu on June 13th, 2019

The warning of "Leaving Europe" has begun to be fulfilled. The impact of the “Brexit” uncertainty on British companies is constantly emerging.

The psychological impact on the British during this period was the bankruptcy of “British Steel”. “British Steel”, which was made up of 14 steel companies in the UK, has always been regarded as one of the UK's largest companies. Whether it was a powerful state-owned enterprise in the 1960s or a company incorporated in the wave of privatization promoted by Margaret Thatcher, “British Steel” has always been a symbol and pride of the United Kingdom. “British Steel” has the few remaining steel mills in the UK.

Although the saying that "British Steel" is in a dilemma has long since gone, its collapse has left everyone unprepared. After the British government refused to provide £30 million in short-term financing for British Steel, the London High Court forced it to liquidate.

Although the company suffered losses and debts after years of global economic crisis in 2009, the last straw that crushed camels was “Brexit”. Because the tariff barrier between Britain and Europe after "Brexit" has not been determined, those European buyers are not willing to risk the delivery of orders to British companies, fearing that because of the "hard Brexit", the steel produced in the UK will be added to Europe. Tariffs.

On the other hand, under the current EU carbon trading system, companies such as “British Steel” can still enjoy free quota subsidies from the EU to reduce production costs. However, according to the agreement between the UK and Europe "Brexit" negotiations, "British Steel" will no longer enjoy EU subsidies, which will increase its monthly production cost by about 100 million pounds.

Although the British "Brexit party" leader Faraj has attributed the "British steel" dilemma to the EU, and said that once the British "Brexit", the British government will be able to use state aid more widely to support steel companies, but his This remark quickly proved to be upside down black and white.

The well-known European magazine said that the company, which employs 5,000 employees and has an industry chain of another 20,000 British workers, declared bankruptcy, making it the first British heavyweight company to be knocked down by Bretagne.

Another major impact of Brexit on the UK occurred in the automotive industry. According to the latest data released by the British Automobile Manufacturers and Traders Association, the uncertainty brought about by the Brexit in the UK has led to a 45% reduction in UK auto production in April, and many auto companies are planning to contract their investment in the UK.

The withdrawal from the process of European integration has brought multiple blows to British automakers:

First, the supply chain, the auto parts in the assembly process must be repeated between the United Kingdom and the European continent, "Brexit" may bring border logistics chaos to make British car companies can not be used. The second is tariffs. Although manufacturing accounts for a small proportion of the UK economy, its exports account for nearly half of the UK's total exports. Once the UK “no agreement to leave the EU”, British car companies will face the risk of a sharp rise in tariffs. The third is the market. At present, most of the cars made in the UK are sold in the EU. The “hard Brexit” will cause damage to the existing market.

The British business community has begun to use actions to give the ruling party "a vaccination" and warned them that "no agreement to leave the EU" will bring Britain into disaster. British companies are considered an important source of Conservative donations. Figures released by the British Electoral Commission show that the Conservative Party’s donations in the first three months of this year were only 3.7 million pounds, a decrease of nearly half from the last three months of last year.

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Joined: April 30th, 2019
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