British people are shocked, suddenly — after voting for Brexit — to discover that ordering stuff from Europe, which used to be as simple as a click, now comes with massive taxes, customs, and suspicious “handling charges”, which they have to pay, or else. Charges that easily add 25% to 50% to the cost of basic things. And while we economists warned Brexit would make Brits poorer, even we underestimated the effect. We thought tariffs would rise, but we didn’t think that trade would come to a sudden stop, which means mass unemployment and shortages and higher prices are all exploding. That’s the worst case scenario, and it’s fast becoming real. What is it called when trade suddenly stops? Sanctions.
Britain is the only country in the world — the only one I can think of in modern history — amazingly, comically, painfully dumb enough to impose sanctions on itself. Almost overnight — it’s been less than a month — you can’t get basic things like European medicine, wine, cheese, beer, clothes, shoes. They’re just…gone. Poof. That might not sound like a big deal, until you consider that Europe supplies many of Britain’s goods, while Britain only supplies Europe with services. Services are easy to relocate — just pick up and hire people in Europe, which is exactly what many British businesses are doing. Goods are not easy to relocate — you have to move a whole factory. So Brits are now poorer forever, in a hard way — not just less money, but less stuff to spend it on, too — they suddenly have vastly less “consumer choice”. Imagine if entire sections of the supermarket — reflecting whole sectors of the economy — simply vanished overnight. You probably can’t, because it’s something that doesn’t tend to happen in the absence of, say, a bully like America sanctioning you, which is something that usually only happens to poor brown people. But nobody sanctions themselves, right? That’s just…idiotic! Well, not until now, anyways.
Umair Haque
The full economic costs of Brexit are just now starting to become apparent, and the reality is harsh: temporarily suspended shipments from the EU, new export rules and regulations where the recommended solution for small businesses is to register inside the EU, massively reduced share trading in London, increased card transaction fees from Mastercard, UK-owned .eu domains suspended, and the list could probably go on much longer.
Some of these issues should sort themselves out with time, as companies become familiarized with new customs documentation – after all, the deal was struck before Christmas, with just a week to spare before the deadline, not enough time for everyone to get up to speed with the regulations. But others, especially regarding financial services, are here to stay, and will continue to cause frictions and renegotiations in coming years. As some people remarked, Brexit is far from ‘being done’ after signing this trade agreement.
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