Brexit lessons for Trump’s trade war

Their Last Feast Screen Prior to Donald Trump, United States Treasury Secretary, Scott Bessent, described the President’s turns on rates as a deliberate act in the creation of “strategic uncertainty.” According to Bessent, the certainty is excessive and the transport of Waywardness brings a leverage to the negotiations that will generate the best commercial offers for the United States.

This trusted conversation reminded me of Brexit, where former Prime Minister Boris Johnson promised that the United Kingdom would obtain a “large part” of the EU, while its Michael Gove campaign side insisted that Britain “would keep all letters” in any negotiation.

The Brexiters thought that the commercial deficit of the UK’s assets gave them a winning hand and that the commercial barriers that Britain wanted to erect with the EU would benefit the exports of Britain. I know, it made no sense even at that time.

Normally in economics, we treat Bygones as a bygonians. You have to wait and not reflect on past decisions that cannot be undone. But this time, where there are similarities, it is worth looking at the amount of milk that the Brexit spilled.

Between the 2016 referendum and the EU-Regne Cooperation and Cooperation Agreement United on January 1, 2021, the United Kingdom created its own strategic uncertainty with multiple ambitions, tactics and prime ministers. The business investment stopped, the Sterling fell and the inflation surpassed other countries. Prior to 2016, Brexiters complained that the United Kingdom was “financially affected by a corpse”, but the previously higher growth performance in the United Kingdom compared to the EU soon disappeared.

These losses have not been recovered. Since the Free Trade Agreement of 2021 with the EU provided the certainty of the highest commercial barriers in Britain, the decrease in the flow of goods throughout the channel has been most noteworthy. The number of exports of goods from the United Kingdom is smaller than in 2016 or 2021 and Britain is the only G7 country that has this record.

Of course, it is possible to explain aspects of this shocking performance. Some come from fuels, which are more likely to reflect the reduction in northern sea oil production instead of Brexit. And the export performance of British goods with non -EU countries is as poor as it is with the EU, which suggests a problem with the United Kingdom in general. Exports of services have been done well.

But it is impossible to build a consistent argument that Brexit has benefited the economy of the United Kingdom. Diminishing the role of Britain feeds a vigorous debate about the damage that has been made and if it is wiser suck In the United States or the EU in the hope of throwing some remains of one of its tables.

Mark Carney, who was closely involved in Brexit, as governor of the Bank of England and now has to negotiate with Trump as Canadian Prime Minister, Put -well The weekend, saying that Brexit lessons are now being applied to the United States. “When trading relationships with its main commercial partners are broken or broken substantially … you end up with slower growth, higher inflation, higher interest rates, volatility, weaker currency and a weaker economy,” he said.

It was painful to live with this experience in Britain. Modern capitalist economies are extremely resistant, so there is rarely that cathartic moment where the whole country realizes that it has made a terrible mistake and moves away from the edge. Therefore, there is no doubt that the Trump administration will continue to sell fantasies about its strategic brightness, as it fought internally during everyday tactics and commercial offers that, at best, will recreate the benefits that the United States already had. Commerce is relatively unimportant to the United States economy and can support many of these nonsense without necessarily crushing.

But a standflationist shock is just that. When it comes to taking into account in some years, the US economy will be weaker and its position in the world decreases. Brexit shows you this.

chris.giles@ft.com