Britain watched President Trump's tariffs with shock, obsession and unstable recognition. After all, the country conducted a similar experiment in economic segregation when it voted to leave the EU in 2016. It still estimates the cost nearly nine years after the Brexit referendum.
The lessons of Mr. Trump’s experience using similar scripts to build walls across the United States are suddenly and suddenly relevant. Critics once described Brexit as the most economic self-harm behavior in a Western country after World War II. Now, it may be spreading across the Atlantic Ocean’s money.
Even after a sudden reversal of some of his tariffs last week, facing the bond market uprising, Britain recalls that short-lived Prime Minister Liz Truss was forced to exit the fundamental tax break that scared the Markets market. Her forgetting experiment is the culmination of the extreme policy cycle that Britain decided to abandon the world's largest trading group.
“In a sense, some of the worst legacy of Brexit are still leading,” said British diplomat Mark Malloch Brown, who said the UK now faces a difficult choice between rebuilding trade relations with Europe or maintaining trade relations with Mr. Trump's U.S.
“The basic problem remains a violation of our biggest trading partner, and if the UK is finally in the arms of Europe, because neither of them can work with the United States, it's only half the victory.”
Mr. Trump, who became the full-time Brexit champion in 2016, has clear similarities between him and the political movement he is declaring. He initially imposed lower tariffs on Britain than the European Union, which was a decision to reward Britain's departure.
The obstacles to the British economy by Brexit are no longer debated, although it is sometimes difficult to get rid of the shocks caused by the coronavirus pandemic, the Ukrainian war and now Mr Trump’s tariffs.
The Government's Budget Responsibility Office estimates that the UK's overall trade volume is about 15% lower than the 15% of the EU's remaining in the EU. Long-term productivity is 4% lower than trade barriers with Europe.
Productivity lagged behind even before Brexit, but the breakdown with Europe exacerbated the problem through seed uncertainty, which reduced private investment. The year between the referendum and the official resignation at the end of January 2020 was paralyzed by debates over its withdrawal clause.
Based on John Springford’s example, UK investments are 11% lower by mid-2022 than those without Brexit. Mr Springford, a researcher at the London think tank European Reform Centre, said commodity trade was 7% lower and GDP was 5.5%.
Mr. Trump began a bigger volatility by imposing, doubling and then suspending various tariffs. Of course, his actions have affected dozens of countries, most notably in the United States and China. There are already forecasts for new rounds of recession and inflation.
Brexit and its consequences have multiple second-order impacts both economically and politically. Ms Truss’ debt tax cut program was driven by a desire to start the UK economy, but triggered a sell-off in the UK government bonds as investors retreated from her advice.
A similar sell-off of U.S. bonds began last week, which had a profound impact on the United States. Rising bond yields put pressure on the government because it means they have to pay more to borrow money. Selling is also unstable because they indicate more anxiety about a country’s credibility.
As far as the UK is concerned, she quickly lost her job due to fears that the credit crisis forced Ms. Truss to put aside her tax cuts. In the calm market, it leaves a residue of suspicion among investors in the UK. Mortgage rates lasted for several months, reflecting an analyst unkindly labeled as an “idiot premium.”
This arduousness among investors has limited Britain's Chancellor Rachel Reeves to take bolder measures to recharge the economy. Prime Minister Keir Starmer ruled out easing the government's self-imposed fiscal restrictions last week, citing Ms. Bruce's free market experiment.
“I think the reason we have such a small conservative prime minister is due to our experience with the trusses.” “It’s directly related to not wanting to prompt the truss effect again.”
Unlike the UK, the US still owns the default currency of the US dollar, and until last week, Treasury bonds remained a paradise for investors. But economists predict that under Mr. Trump, both will be under greater pressure.
“Confidence has been shaken, and Bond's alertness is more agile,” said Richard Portes, a professor of economics at London Business School. “People are now more sensitive to policy inconsistencies and policy irresponsibility.”
Brexit also reduced Britain's impact on the diplomatic phase, and only recently began to make up for Mr Stemmer's efforts to bridge the bridge between Europe and the United States.
Mr. Trump retreated from the U.S. role as NATO security umbrella, bringing Britain closer to Europe. But the British still work together with the legacy of Brexit. For example, France demands that Britain make concessions to fishing rights – the demand for the old chestnuts of Brexit negotiations, held with an EU defense agreement.
Analysts say the longest lasting impact of Brexit may be political. Years of intense debate split and radicalize the Conservative Party, which pieced together a range of policies on immigration and trade from 2010 to 2024, reflecting the clumsy alliance behind Brexit.
Some Brexit pushes Britain's vision to a country with low taxes, light regulation, free trade – Singapore Thames, in its title. Others hope to play a stronger national role in the economy to protect workers in the inner left hinterland from open borders and the global economy.
These contradictions lead to policies often contradicting the information about Brexit. For example, the UK experienced record net immigration in the years since leaving the EU. The difference is that more immigrants come from South Asia and Africa, while fewer from Central and Southern Europe.
Brexit supporters sell the project as a magical bullet that could solve the problems caused by a globalized economy – with Mr. Trump’s claim that tariffs will be a boon to public wallets and a remedy for global trade inequality. Experts say that in both cases, this magic pill exists.
“The fact is that Brexit has not corrected any problems caused by industrialization,” said Tony Travers, a political professor at London School of Economics. “If anything, Brexit makes them worse.”
Frustration with the economy and immigration was the reason why voters swept the Conservative Party last year in support of Mr. Stamer's Labor Party. However, his government has been working to address these issues, as well as setbacks after the UK divorce.
Mr. Trump’s magazine alliance has the same ideological fault line as the Brexits, bringing economic nationalists such as Stephen K. Bannon to globalists such as Elon Musk. This has led analysts to doubt whether Trump politics in the United States looks much like post-Brexit politics.
“Brexit caused far-reaching damage to the Conservatives,” Professor Travers said. “Because it was blamed by factions, it was given an unselectable option.
