How Brexit, a Startling Act of Economic Self-Harm, Foreshadowed Trump’s Tariffs

When Donald Trump reintroduced sweeping tariffs as part of his economic strategy, many in Britain couldn’t help but feel a wave of déjà vu. The shock, mixed with a strange familiarity, comes from the United Kingdom’s own experiment in economic insularity — the 2016 decision to leave the European Union. Almost a decade later, Britain is still struggling with the consequences of Brexit. And now, as America appears to be embracing a similar path, the lessons from the UK’s journey are becoming alarmingly relevant.

Trump’s renewed push for protectionist policies, despite some recent backtracking in response to market turmoil, mirrors Britain’s departure from the world’s largest trading bloc. His tariffs, like Brexit, are being framed as bold moves to reclaim economic sovereignty. Yet critics have long viewed Brexit as one of the most damaging economic decisions made by a Western democracy in modern history. Trump’s America could be heading for a similarly bumpy ride.

Just last week, Trump was forced to scale back a portion of his tariffs after facing a sharp backlash from the bond markets. For many Britons, this was reminiscent of the chaos during Liz Truss’s short-lived premiership in 2022. Her attempt to stimulate growth through unfunded tax cuts triggered a market collapse and ultimately led to her political demise. Truss’s dramatic policy retreat became a symbol of the volatility that has haunted the UK since Brexit, an episode which continues to cast a long shadow over the nation’s economic and political landscape.

Mark Malloch Brown, a veteran British diplomat and former UN deputy secretary-general, noted that the most serious repercussions of Brexit may still lie ahead. Britain is now torn between rebuilding its economic partnership with Europe and maintaining close ties with the United States, particularly under a potentially protectionist Trump administration.

“The essential challenge remains the same,” he said. “We broke away from our biggest trading partner, and the question is now whether we can find our footing either with Europe or with a U.S. that may no longer want to play ball.”

In 2016, Trump was an enthusiastic supporter of Brexit, championing it as a triumph of nationalism and self-determination. His administration even imposed fewer trade restrictions on Britain than on the EU, which many interpreted as a nod of approval. However, the economic impact of Brexit has become increasingly undeniable, even if it has been muddied by other global disruptions like the COVID-19 pandemic and the war in Ukraine.

According to the UK’s Office for Budget Responsibility, Britain’s total trade is about 15% lower than it would have been had it stayed in the EU. The productivity hit is also severe, estimated at 4% below what might have been expected without new trade barriers with Europe.

While Britain’s productivity issues predated Brexit, leaving the EU amplified the problem by injecting prolonged uncertainty into the business environment. The protracted negotiations and political paralysis between the 2016 vote and the official departure in January 2020 discouraged investment and disrupted economic planning.

Economist John Springford, from the Center for European Reform, modeled a “non-Brexit Britain” using a composite of similar economies. His research indicates that by mid-2022, investment in the UK was 11% lower than it likely would have been, trade in goods was down 7%, and the country’s GDP had declined by 5.5%.

In contrast, Trump’s shifting tariff policies — imposing, escalating, and occasionally halting duties — have introduced a different kind of instability, one that spans multiple nations but especially affects the U.S. and China. Some economists are already forecasting recession risks and another spike in inflation as a result.

Beyond economics, Brexit triggered political and financial reverberations that continue to limit government decision-making. Liz Truss’s attempt to jolt the sluggish economy with tax cuts financed by borrowing led to a steep sell-off in UK government bonds. The market response was so severe that the Bank of England had to step in to stabilize the situation. The fallout still lingers — mortgage rates stayed high for months, and investor confidence remains shaky.

Rachel Reeves, the current Chancellor of the Exchequer, has found her options constrained by this legacy. Prime Minister Keir Starmer has explicitly ruled out loosening fiscal policies, citing the market chaos that followed Truss’s agenda as a cautionary tale.

Mark Malloch Brown ties the government’s cautious stance directly to the trauma of the Truss era: “What you’re seeing is the consequence of that experience — nobody wants to risk a repeat of what happened.”

Unlike the UK, the U.S. still enjoys the privilege of issuing the world’s reserve currency. The U.S. dollar and Treasury bonds have traditionally been considered safe assets. But recent events have made even those havens look more vulnerable. Economists warn that continued policy unpredictability under Trump could erode confidence further.

Richard Portes, a professor of economics at the London Business School, warned that global investors are becoming increasingly wary. “There’s a new sensitivity to inconsistent and reckless policies. The trust that once seemed unshakable is now being tested.”

Brexit also dealt a heavy blow to Britain’s diplomatic influence. Starmer’s government is working to re-establish the UK as a vital link between Europe and the United States, but challenges remain. Trump’s disengagement from traditional alliances like NATO has nudged Britain closer to Europe, yet tensions persist — a proposed UK-EU defense agreement is currently stalled due to long-standing disputes over fishing rights.

Perhaps Brexit’s deepest impact has been on the internal politics of the UK. The prolonged debate fractured the Conservative Party and pushed it toward ideological extremes. From 2010 to 2024, successive Tory governments veered between libertarian visions of a deregulated, low-tax Britain and more interventionist policies aimed at shielding domestic industries from globalization.

The result was a muddled and often contradictory policy environment. For example, although Brexit promised to “take back control” of borders, net migration to the UK actually surged in the years following EU withdrawal. The composition of immigration changed, with more arrivals from South Asia and Africa and fewer from Europe, but the numbers defied the expectations of many Leave voters.

This dissonance between promises and reality eroded public trust and fueled political upheaval. Brexit was pitched as a panacea for the dislocations caused by globalization, just as Trump has portrayed tariffs as a silver bullet for restoring American manufacturing and addressing trade imbalances. But experts caution that neither approach can truly reverse the structural changes wrought by decades of economic integration.

“Brexit didn’t fix the underlying issues from deindustrialization,” said Tony Travers, a political scientist at the London School of Economics. “In many ways, it made those problems worse.”

Dissatisfaction over the economy and immigration contributed to the Labour Party’s landslide victory in 2024, ousting the Conservatives after 14 years in power. Yet the Labour government now finds itself dealing with many of the same unresolved issues, along with the long-term consequences of severing ties with Europe.

In the U.S., Trump’s political coalition — a mix of economic nationalists and global capitalists — mirrors the ideological tensions within the Brexit movement. Analysts are beginning to wonder if the Republican Party, like the UK’s Conservatives, will suffer deep internal fractures in a post-Trump era.

“Brexit essentially destroyed the electoral viability of the Conservative Party by splitting it into warring factions,” Travers observed. “The question now is whether the Republicans face the same fate after Trump.”

As the U.S. potentially repeats some of Britain’s missteps, the UK’s turbulent post-Brexit journey offers a cautionary tale — one that blends economic setbacks, political fragmentation, and the difficult reality that reversing globalization is far more complex than campaign slogans suggest.