US trade war is similar to Britain’s Brexit
For the outside world, it was difficult to understand that the British in the referendum in 2016 chose to leave the EU. Economically, it was madness – if this was almost all economists agreed.
But the Brexitors had skillfully pointed out the areas where Britain lost on EU membership (fishing quotas) or been overrun by Brussels (asylum policy), and it spoke to humans. British EU friends never succeeded in convincing voters that Britain served on the EU.
The internal market means that European companies can buy and sell their goods and services freely throughout the Union, as if the EU were a single country with a common base plate rules and not 27 countries with different regulations. The industry earns a multum from it. But setting an exact figure is difficult.
Easier to turn on the steak, now that five years have passed since Brexit: that the United Kingdom left the EU, according to the British Ministry of Budget, means a long -term BNP-Tapp of 4 percent Every year.
Just as the Brexitors did almost ten years ago, the US Donald Trump zooms into details and misses the whole. The EU and US trade relationship is the largest in the world, and gives rise to a huge, mutual, but difficult to estimate, financial gain. But according to Trump, it is unfair that the United States is buying more food, medicines and cars from the EU than the opposite, while at the same time ignoring that the reverse applies to the service sector.
The idea of the United States through Penalties can equalize the imbalance of goods without the EU responding with the same coin against US services, showing a frightening ignorance in Washington about how the EU works. It is a wrong notion that the United States is the strongest party. That’s not it; In trade policy, the EU plays in the same league as the US and China.
The US Department of Commerce also seems to believe that it is possible to disintegrate and rule by negotiating with individual EU countries. The British also tried to do this during the Brexit negotiations, hoping for support to remove the raisins from the EU cake. But no country was snapping. Then, as now, the EU countries have an extremely strong incentive to stick together.
After this week’s riot on the stock exchange, Trump has backed down and the United States pauses some of the customs, including them against the EU. But the uncertainty remains. Everyone loses on the US trade war, but it is the US economy that will be hit hardest, as the country has been mucked with all its trading partners at the same time. Similarly, the UK paid the highest price for Brexit.
