Voting for Brexit has proven to be much easier than fulfilling the wishes of U.K. voters. While the American trade focus has rightfully been on China, the United Kingdom is consumed by what increasingly is a messy exit from the European Union trade pact.
In the week ahead, a series of votes in Parliament are scheduled. First up is the Tuesday decision on the government’s official Brexit plan. The first vote failed spectacularly. If the second vote comes up short, the next decision will be whether or not to leave the trade bloc with no deal whatsoever.
It’s either a plan that may fail, or a vote on the failure to plan for an exit that is scheduled to happen March 29 with or without a deal.
This is not just a lesson in U.K. politics and economics for U.S. investors. Regardless if the U.K. exit from the European Union is a soft one (with a plan) or a hard one (without), it will usher in a new normal for trade and migration.
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Sky News reports Britain may end most import taxes for 12 months on all kinds of products like car parts and cereal if there’s no exit deal. Under this still-secret plan, the U.K. would not secure similar reductions on the taxes levied against U.K. exports. Essentially, Britain could declare itself wide open for international trade without demanding its trading partners do the same.
Such a strategy runs counter to how President Donald Trump has been negotiating trade relationships. The president called himself “a Tariff Man” in a December tweet. He has slapped tariffs on foreign-made solar panels, washing machines, steel, and more than 1,000 Chinese-made imports in his effort to protect American industry, jobs and know-how.
American investors have gotten used to the tough tariff talk from the administration. They haven’t heard much about the rough exit ahead for Brexit.
Tom Hudson hosts “The Sunshine Economy” on WLRN-FM, where he is the vice president of news. Twitter: @HudsonsView