Analysis: An American Brexit?
I spent last week talking to some of the people in and around Brexit, Britain's crashing out of the European economic system and the closest parallel to what the US did with global trade last week. Then, the media and political class vastly overestimated how much voters cared about the 'economy.'
'British voters were told Brexit would hurt them in the wallet but they voted for it anyway,' Sun political editor Harry Cole, a pro-Brexit voice, said. 'They either didn't believe the doomsday warnings or they didn't care, because the message they wanted to send the elites trumped the short-term pain.' The politics, he said, 'defies the usual logic and playbook of 'it's the economy, stupid.''
For some Brits, the trade-off — a prouder, more independent, poorer, and weaker nation — may have been worth it, said Tim Shipman, the Sunday Times commentator who wrote the book on Brexit. Others 'didn't believe it would make them poorer — or more to the point, didn't believe that the things that countries measure to decide whether they're richer had any impact on them.'
Last week, Brexit's architects could finally point to a dividend, as one of them, Matthew Elliott, noted to me: Britain got hit with smaller Trump tariffs than did the EU. He said that Trump is succeeding one place where Boris Johnson failed — in being 'very, very clear with the rest of the world why you've done this and what you want the outcome to be.' So far so good, perhaps.
But another lesson of Brexit is that politico-media bubbles burst. Today most Brits think Brexit was a mistake, though there's little political will to rejoin the EU. And the people who rebelled against immigration and globalization, said Shipman, 'are still looking for someone who can deliver for them.'
'Comparing Brexit and Trump's trade tariffs isn't apples to apples,' David Luhnow and Max Colchester wrote Saturday in The Wall Street Journal. 'The U.K. economy is far more dependent on trade than the U.S., which boasts a much larger and dynamic domestic economy. Brexit wasn't done to right a trade deficit; the U.K. was seeking to retake control of issues from Brussels such as trade policy, regulation and migration.'
A conducted on the eve of Trump's 'Liberation Day' tariff rollout found voters' opinions of his economic policies had essentially inverted since October, with 52% of respondents saying they disapprove.
In his Liberation Day remarks, Trump cited the Smoot-Hawley Tariff Act of 1930 as evidence that tariffs once drove US economic prosperity. 'It's what we would call a lie. False. Not true,' said Andrew Cohen, a professor of history in the Maxwell School at Syracuse University, told the Guardian. 'He's wrong. No one thinks that. Even conservative economists don't think that. Even protectionist economists don't think that.'
California Gov. Gavin Newsom, the governor of the world's fifth-largest economy, has begun soliciting backchannel trade agreements.
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Los Angeles Times
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