A second Trump presidency strengthens the case for Brexit

U.S. President Donald Trump
U.S. President Donald Trump

The usual suspects were quick to seize on Donald Trump’s victory in the US Presidential elections as ‘yet another reason’ for the UK to rejoin the EU.

Of course, some people need no excuse. If Kamala Harris had won, they would have insisted that a rejuvenated Democrat-led administration offered a great opportunity to reset US-EU relations, and that the UK must not risk being left behind. Or something like that, anyway.

Instead, they are making two main arguments about the risks of a Trump Presidency – one geopolitical and one economic.

The first is based on vague fears about US foreign policy under President Trump, including speculation that he would weaken NATO or undermine Ukraine’s fight against Russia. Some believe that this strengthens the case for the EU to play a bigger part on the world stage, and that this would be more effective if the UK were on board.

That makes little sense. The UK has more influence on the US as an independent sovereign state rather than one voice subsumed among many. The ‘Special Relationship’ may sometimes not be all it is cracked up to be, but ‘Brexit Britain’ still punches well above its weight. And the emerging political crisis in Germany means that now would be a particularly bad time to rely more on the EU.

The economic argument is just as weak. Mr Trump has proposed new tariffs of 10% to 20% on US imports from most countries, rising to as high as 60% on imports from China.

The worry is that this would compound the harm that Brexit has done to UK trade with the EU. The only way to mitigate this risk, some say, would be to rejoin the Single Market and Customs Union.

This argument is also full of holes. For a start, it is far from certain that the US will impose these additional tariffs. Almost everyone knows they would be counter-productive and wiser heads may yet prevail.

Moreover, even if President Trump goes ahead, rejoining the EU would simply guarantee that the UK felt the full force of any new tariffs imposed on the bloc. Staying outside would at least open the door for the US to treat the UK more favourably.

That may require concessions on both sides. However, Mr Trump prides himself on his deal-making. He would surely look more positively on a new trade agreement with the UK than with the EU, which represents a far bigger competitive threat.

In any event, the UK is still less vulnerable on its own. The US may be the UK’s largest export market, but more than two-thirds of this trade is in services, which will be largely unaffected by tariffs. Many European countries, notably Germany again, would be far more exposed. So, rejoining the EU would simply shackle us even closer to a weaker economic bloc.

Indeed, ‘Brexit Britain’ has already benefited from not having to impose the EU’s additional tariffs on Chinese electric vehicles. We need not be dragged into a US-EU trade war either.

Finally, the evidence that leaving the EU has caused a big hit to UK trade is remarkably thin. It still makes more sense to retain a nimbler trade policy that allows for new deals with faster growing economies elsewhere.

And of course, Brexit is not just about trade. Rejoining the EU would close off the many other opportunities to boost the economy,  such as smarter regulation of everything from financial services to biosciences and AI.

In short, a Trump Presidency surely strengthens the case for Brexit, rather than weakens it.


Julian Jessop is an independent economist