There can be no winners in a trade war of this scale

The Sunday Telegraph - Money & Business - - Business - Ben Mar­low

Per­haps the most shock­ing as­pect of the Bom­bardier row is that it has taken this long for a full-blown in­ter­na­tional trade war to be­come a gen­uine threat. The de­ci­sion by the US Depart­ment of Com­merce to slap a tar­iff of 220pc on im­ports of the plane maker’s C-se­ries air­craft into Amer­ica, in re­sponse to a com­plaint from Boe­ing, is the cul­mi­na­tion of a storm that has been brew­ing for al­most three decades.

It is a bit­ter blow for the Cana­di­ans, com­ing in the same week that their long-stand­ing in­flu­ence in the rail mar­ket was se­verely dented by the an­nounce­ment of a merger be­tween two of its big­gest ri­vals, France’s Al­stom and Ger­many’s Siemens.

How­ever, Canada is far from the only loser from this spat. Once again, our em­bat­tled Prime Min­is­ter has been out-wit­ted on the in­ter­na­tional stage at a time when she should be demon­strat­ing re­solve and lead­er­ship.

This was the mo­ment to ex­ploit the so-called “spe­cial re­la­tion­ship” with Amer­ica to help pro­tect thou­sands of jobs in North­ern Ire­land where Bom­bardier pro­duces wings for the C-se­ries.

In­stead, as the row spec­tac­u­larly un­folded, the lat­est round of Brexit ne­go­ti­a­tions were tak­ing place and Theresa May was awk­wardly singing the praises of free-mar­ket cap­i­tal­ism in speech at the Bank of Eng­land.

Now she must work out how to keep the Govern­ment’s DUP al­lies in North­ern Ire­land on side while re­sist­ing the temp­ta­tion to lash out at Boe­ing, a more im­por­tant for­eign in­vestor than Bom­bardier, with four times as many em­ploy­ees in the UK.

Labour is de­mand­ing re­tal­i­a­tion but that would be ill-ad­vised. Boe­ing’s re­la­tion­ship with the Bri­tish mil­i­tary dates back nearly 80 years and in­volves the sale of vi­tal equip­ment like Chi­nook he­li­copters and Apache at­tack he­li­copters. In­flam­ing ten­sions would surely end any chance of forg­ing a vi­tal post-brexit free trade deal with Amer­ica in the near fu­ture. Fran­tic be­hind-the-scenes diplo­macy is much more likely than Boe­ing be­ing frozen out of fu­ture de­fence con­tracts.

Still, that doesn’t mean the US emerges un­scathed.

China and Mex­ico were thought to be the tar­gets of Don­ald Trump’s pro­tec­tion­ist “Amer­ica First” pol­icy. In­stead, with char­ac­ter­is­tic short­sight­ed­ness and confusion, he has risked long-stand­ing re­la­tions with two of his clos­est An­glo-saxon al­lies de­spite their des­per­ate pleas to re­sist ac­tion. While Bri­tain’s re­sponse is likely to be lit­tle more mea­sured, Canada is threat­en­ing to hit back, halt­ing the pur­chase of Boe­ing’s F-18 Su­per Hor­nets if the com­pany con­tin­ued to pur­sue its chal­lenge against Bom­bardier.

In the end the US In­ter­na­tional Trade Com­mis­sion may rule that the duty is un­jus­ti­fied. If it doesn’t, then the World Trade Or­gan­i­sa­tion could have the ul­ti­mate say. Sense should pre­vail be­cause there can be no winners in a trade war of this scale.

‘Once again, our em­bat­tled PM has been out-wit­ted on the world stage’

Dyson’s bat­tle too far

James Dyson is one of a hand­ful of UK en­trepreneurs whose ev­ery move is her­alded as a stroke of ge­nius. Hav­ing built a first-class man­u­fac­tur­ing em­pire out of noth­ing, the bil­lion­aire can gen­uinely claim to be one of Bri­tain’s most tal­ented and suc­cess­ful in­ven­tors.

Re­fresh­ingly, he ac­knowl­edges that the hits are out­weighed by the misses – progress comes only if you learn from your mis­takes Dyson says.

Still, the 70-year-old’s next move threat­ens to be his most costly. Last week he un­veiled plans to gate­crash the elec­tric car revolution. He has a bat­tal­ion of 400 en­gi­neers work­ing on a model that is on course to be ready for 2020.

Even by Dyson’s stan­dards this is highly am­bi­tious. He is also hor­ri­bly late to the party. Ev­ery ma­jor car man­u­fac­turer in the world is cur­rently chas­ing elec­tric dom­i­na­tion. Tesla, Nis­san, Re­nault, Volvo and BMW al­ready have mod­els on the mar­ket, while Jaguar, Mercedes, and VW are bet­ting big on elec­tric.

There is no ques­tion that Dyson has the know-how but he lacks the fi­nan­cial might to mount a se­ri­ous chal­lenge. £2bn has been set aside but that is a splash in the ocean against the car gi­ants and Ap­ple and Google.

The in­ven­tor has a bril­liant track record of tak­ing on the big boys – the Dyson Dual Cy­clone was the UK’S fastest ever sell­ing vac­uum cleaner – but I fear this is a David and Go­liath bat­tle he won’t win.

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.