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Bill Blaine is our expert strategist at Shard Capital
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Hi, Bill. Founder of Winchard Capital and Honorary Professor of Economics at Edinburgh Business School
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All right, help us out here because we don't know what to do in the face of this threat from Trump that is an imminent reality
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What we need to do is face up to the fact that the world has completely and utterly changed
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We need to see where that change has come from. Now, we're all talking about, oh, how do we stay good with America
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How do we keep in place and not take too much damage from America and how do we effectively suck up to them
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But I think that's the wrong approach to take. We need to understand the way in which America has changed, why it's changed and where they are
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And something fundamental happened on the 4th of November when Trump won that election
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And you can see that in the people he's picked in his cabinet. They are there for their loyalty and backing up whatever Donald thinks
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Now, I teach the postgraduate course at the Edinburgh Business School, best business school in Britain, I would hasten to add
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I'm not going to argue with you. I wouldn't dream of you, not while you're on the show at any rate. There's not a single person in that course who would not turn around and say
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tariffs make no economic sense at all. You end up destroying and destabilising global trade
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And as other people have said, everybody loses. Just explain, because you're the prof and I'm not, why it is that everybody loses
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because you would think that the big bully boy imposing the tariffs would be at least the winner
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That person would win that country would win that nation that industry and everybody else would lose But it not as simple as that is it Not at all because all that happens when you put a tariff in is your own people end
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up paying more. And there are bound to be knock-on effects. I mean, if we know that the Americans are charging more for our cars than their cars
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even if we don't put tariffs on, we're unlikely to buy things from them because they think
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they are treating us unfairly. and typically tariff wars become proper tariff wars where everyone inflicts
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There is no upside. It will not create growth in the States
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What it will do is create inflation. An interesting point, though, is what we call the price inelasticity of demand
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for things like Range Rovers and especially Rolls Royces. I don't think there's a single American tech billionaire
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that is going to hold off buying his Rolls Royce because they've got up at the shop by 25% because of the tariff
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So we'll still be selling these kinds of goods, the high-priced goods
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The problem is where do we apply tariffs in return? Because the US and the UK economies are fairly closely linked
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We buy stuff from them, they buy stuff from us, and a lot of us, if we were to ban
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if we were to stick a tariff on Boeing aircraft, for instance, which is one thing I've heard suggested
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Well, you know what? We supply an awful lot of the parts that go into Boeing. But we do need to understand the psychology
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and that's what's so interesting about your last speaker. Yes. Psychology of the new Trump party what they call his minions who are all so loyal to him Now all you need to do to understand that is listen to the kind of stuff we saw on that email
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chain last week. We're a bunch of freeloaders. You know, we deserve everything that's coming to us
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The woman who criticised somebody for asking a question about America with a rabid attack on
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what goes on with the Muslim majority in the UK. We've got to face it. America is thinking
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differently. And if we simply accept tariffs without some kind of strong arm back
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they will continue to do so. And I think this is where Trump's psychology comes in
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We can't just do nothing. We have to do something. OK, what can we do? What should we do
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Well, you know, what's one of Trump's triggers is the royal family. Nothing pleases him more the fact that he's the first president to be invited a second time for a state visit. Let's make quite clear that that's possibly on the line. You know, if you're damaging our economy, we can't really host you. And, you know, if you're damaging Canada, as you're doing, we can't host you because the king is also the head of state there
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We need to show that Britain is not just there to be kicked in the teeth, which is the approach he's taking
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And just tell me how we avert this, you know, exceedingly undesirable situation of a trade war
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We get that the Prime Minister doesn't want one. We don't want one, do we? We don want any part in it All you need is the whisky example to realise that it going to be death to industry It going to be terrible for us Yeah well listen to my accent I very very clear that we got to be exporting as much whisky as we can But we cannot afford a situation
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where we let the Americans act in the way they're doing. Now, it's not just tariffs
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If you take a look at the agreement that the Americans, and I would use this word deliberately
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exhort out of Ukraine just now, and the comments they've been making
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about how they're going to take over Greenland, it is time that we stood up and said enough's enough
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Now, exactly how you do that in terms of negotiation, that's where it gets difficult
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Do we suddenly say, well, if you impose these tariffs, we will be forced to do things
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We are reliant on the US for much of our military hardware
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We're reliant on an awful lot of stuff like chemicals. We export pharmaceuticals to them
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They export chemicals to us. But there are areas where we can hurt them back, and one of these is agriculture. Machinery, we can hurt them back as well. Now that maybe sounds like a trade war, and that would be a terrible thing. But unless we put the foot down, things will simply get worse
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This is not somebody who is going to stop. This is somebody who's going to continue pushing and pushing and pushing
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because that is what people like J.D. Vance and Hesketh and Walsh
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and all the others are like. They want to gain points in front of their lord and master
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So the harder they push, the more insulting they become, the more we have to push back and show you cannot do that with us
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Bill Blaine, thank you very much indeed
