Trump’s Trade Wars: A Brexit-Sized Warning for the US Economy
Trump’s Trade Wars: A Brexit-Sized Warning for the US Economy

Hey friend, remember Brexit? The whole drawn-out, messy, economically uncertain situation in the UK after they left the EU? Well, two leading economists, Jonathan Haskel and Matthew Slaughter, argue that Trump’s chaotic trade policies are setting the US up for a similar, potentially disastrous, outcome.
Their main point? Uncertainty kills investment. Trump’s constant shifting of tariffs, threats, and negotiations – what the US Treasury Secretary called “strategic uncertainty” – has created a climate of fear for businesses. Think about it: if you’re a company planning a huge investment, are you going to commit billions when you have no idea what the rules of the game will be next month, next year?
They use Brexit as a perfect case study. While the actual *volume* of UK trade didn’t immediately plummet after the vote, the *uncertainty* about future trade deals choked investment. Years of stagnant investment led to slower productivity growth and flat wages. The economists highlight that the impact wasn’t immediate, but the long-term consequences were devastating.
The situation in the US is looking eerily similar. Economic uncertainty indices are through the roof – higher than during the pandemic or the 2008 financial crisis. Companies are halting earnings forecasts because they’re too unsure about the future. Investment is slowing, hiring is slowing, and even mergers and acquisitions are down.
While there was a short-term surge in imports earlier this year as companies rushed to beat tariff increases, the long-term outlook is bleak. Many experts predict stagnant capital investment, a chilling effect on innovation, and ultimately, slower economic growth and lower standards of living for Americans.
There’s a glimmer of hope: the AI boom might be resilient enough to weather the storm. And Trump’s calls for foreign companies to invest more in the US could potentially offset some of the negative effects. However, the core problem – the crippling uncertainty – remains. Until that’s addressed, the US risks repeating the UK’s painful lesson: economic uncertainty leads to a prolonged period of stagnation, impacting investment, productivity, and ultimately, everyone’s wallets.
It’s a pretty sobering comparison, isn’t it? The economists essentially warn that the US is sleepwalking into a self-inflicted economic wound, and the longer we wait to address the uncertainty, the worse the consequences will be.
Disclaimer: This content is aggregated from public sources online. Please verify information independently. If you believe your rights have been infringed, contact us for removal.