Trump’s Trade War Proves That a WTO Brexit is Nothing to Fear

Donald Trump has smashed America’s erstwhile pro-trade consensus by placing tariffs on both alleged economic rivals as well as long time allies. While the trade war has been counterproductive, it has not resulted in the kinds of horrors that pro-EU politicians in Britain claim will occur in the event of a WTO Brexit or as pro-EU politicians call it, a “no deal Brexit”. Donald Trump has internationally made it more difficult for certain foreign products to enter the US whilst many countries have erected reciprocal tariffs which make it more difficult for American producers to export their goods abroad.

But while this policy is foolish, it has not resulted in medical shortages in the US or anywhere else, it has not resulted in starvation, it has not resulted in a disruption of the general flow of both necessary and luxury items and it has not changed life for the vast majority of Americans. Of course, certain sectors in the US have been hit hard by the trade war, noticeably American farmers. But one must remember that this occurred because Donald Trump internationally took measures that inevitably led to foreign markets cutting off the supply of US agricultural goods as a means of retaliation.

By contrast, one of the few things that unites most Brexiteers and most Remainers in Britain is that each side if pro-trade. The differences is that whilst Remainers are content with trading freely only among EU nations in addition to a few non-EU states that have struck FTAs (free trading agreements) with Brussels, Brexiteers tend to advocate for free trading agreements throughout the world, as opposed to limiting agreements that would bind Britain to the increasingly parochial stance on trade taken by “fortress Europe”.

As such, an exit from the European Union would not see Britain adopting Trump style policies on trade but would see the UK signing ever more FTAs with the wider world, including potentially with both the United States and China – the world’s two largest economies. It is a further irony that whilst Donald Trump wants to tear apart many existing FTAs signed by the US, he and his colleagues have openly stated that the US is eager to sign an FTA with Britain once it exits the EU and the EU’s customs union which prevents the signing of independent bilateral FTAs.

It must be said that some UK businesses will go through a period of adjustment assuming that the EU does not rapidly sign an FTA in the aftermath of a WTO Brexit. That being said, because the UK will almost certainly create new free trading opportunities in the event of a WTO Brexit, this adjustment period will be far less burdensome to certain sectors of the UK economy than the Trump trade war has been to American farmers. Furthermore, with the billions of pounds that the British government will save in the event of a WTO Brexit (under a negotiated deal the UK will have to pay Brussels £39 billion), some or even all of this money can be used to help certain businesses re-calibrate themselves in a dynamic post-EU era.

Taken as a whole, Trump’s trade war which has been reckless by design has not dramatically changed the life of most American. Because of this, it is ludicrous to suggest that a WTO Brexit predicated on a willingness and enthusiasm for more rather than less free trade around the world will result in the crisis of Biblical proportions that Remainers engaged in “project fear” would lead people to believe.

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