Brexit is Knocking at the United States' Door

by Francesca Robinson (University of Illinois, Urbana-Champaign)

This blog post was written for the course "Current Issues in Global and EU Affairs", which took place from February 11-May 9, 2019.

Image Credit: Christoph Scholz, via Wikimedia Commons

Brexit has been quite a hot topic since Britain decided its fate in 2016.  Most of the literature on this British EU exit focuses on the impact that Brexit will have on EU institutions and member states.  However, Brexit does not just affect European countries. Brexit will have significant impacts not only on the relationship between the UK and the US, but also on the relationship between the US and the EU. 

The potential future economic consequences of Brexit are of great concern.  Within the UK itself, there are fears that a hard Brexit deal, in which the UK will be denied access to the EU common market, would bring economic hardships to the UK.  There are estimates that Brexit may cause the economy to shrink anywhere from 4% to 9%.  Similarly, there are also economic implications for the United States.  The United Kingdom is America’s fifth largest export market and main foreign investor (Layne, 2019).   The types of goods that flow between these two countries range from auto parts, technology, and even food.  Americans who are involved in industries that export to the UK could have their jobs be put at risk.  The U.S. banking industry in London may also takea significant hit by losing access to the European market.

In the past, the United States has also used the UK as a bridge to the rest of the EU. The linguistic, cultural and historical ties between America and Britain make this bridge possible (Herszenhorn, Wolfe, Temple-West, & Gold, 2018).  These ties have allowed the UK to serveAmerican interests during EU negotiations and help shape EU policy (Layne, 2019).  However, the loss of this connection means that the U.S.’ influence in the EU will decrease and their relationship with the EU may be more strained going forward.  Additionally, in the event of a hard Brexit and a free trade agreement between the U.S. and UK, then there may be tensions between America and Europe. 

To continue the UK-U.S. relationship, the United States may strike a trade deal with the United Kingdom and take advantage of Brexit.  The Trumpadministration has outlined a free trade deal with Britain that is asking formajor concessions.  The U.S. would want tariffs eliminated or reduced and the removal of other export barriers.  Furthermore, this administration would also want an agricultural trade deal that would fall more in line with U.S. food standards, meaning that the UK would have to accept chlorinated chicken or the use of genetically modified foods.  These types of products are banned in the European Union, which means that Britain would face pressures if it wants to continue trade with the EU where Britain must adhere to the EU food safety and environmental rules.  Ultimately, the future of these transatlantic relationships and Brexit is unclear (Brookshire, 2018). However, it is certain that Brexit does not just affect Europe and will have consequences for the United States. 

Additional References

Brookshire, B. E. (2018). Building the Trade Wall to Mexico: What NAFTA, Brexit, and TPP Mean for the Future of U.S. Trade. Lincoln Law Review, 45, 1–29.