Trump means Trump, but who the hell knows what Brexit is?

We are only four weeks into this Godforsaken year but already everything is looking very different - and generally worse - than it did when we joined hands to sing Auld Lang Syne.

Back then we laughed with grudging respect at the comment by Trump-backer Peter Thiel that while the liberal left had been foolish in taking the Donald literally but not seriously, his electors took him seriously not literally.

In other words, how foolish we were to get irate when Trump said he would build a wall on the US’s southern border and make Mexico pay for it, those who listening to him properly realised he was echoing their anger at the volume of immigration.

Equally, warning US companies that they would pay if they carried on using factories in Mexico to makes goods and then send them across the border for American consumers to buy. Ditto plans to give the green light to polluting oil pipelines, restart waterboarding torture or stop Muslims coming to the States.

Well here we are a week into the Trump ascendancy and the new president is signing a bunch of executive orders to: build a wall between the US and Mexico; allow construction of the Dakota Access and Keystone XL oil pipelines; and other restricting immigration from certain mainly-Muslim countries. He is talking seriously of an across-the-board 5% tax on imports, and of allowing the military to use torture on Islamic State suspects.

Back in the dark final days of 2016 there has been a sense of optimism that having finally entered the White House that President Trump would govern as his predecessors had - with a mission to make changes but with a sense of responsibility to all Americans and not just those who voted for him.

Like his predecessors Trump, wiseacres said, will be shown to have campaigned in poetry and governed in prose. Bollocks: he campaigned in Twitter and will govern in falsehoods. This will be (hopefully only) four bloody years of hand-to-hand combat between Trump and his advisers and those brave enough to put their head over the Washington parapet. Trump means Trump.

it is wholly unclear what trading relationship Britain will have with the rest of the EU

Meanwhile 5,000 miles to the East and it is now clear - if that is the right word to apply to anything to do with British politics - that Brexit does not mean Brexit.

It all seemed so simple: the people had voted for the UK to leave the European Union. Prime Minister Theresa May, who campaigned sotto voce for the Remain camp, would trigger Article 50 of the Treaty on European Union to start the two-year process. The UK would not need to leave the single market and that London would remain the financial centre of Europe.

One by one, these certainties have started to fall apart. Thanks to the bravery of businesswoman Gina Miller, who launched the legal challenge to May’s right to use royal prerogative to trigger Article 50, we have a Supreme Court ruling that it is Parliament that must start the process. With opponents of a hard - or indeed any - Brexit able to table amendments to the Bill that is expected imminently, the parliamentary process could conceivably carry on into April or May.

The UK is now not, after all, going to seek to stay in or even close to the single market, or the customs union or the European Economic Area. However it is wholly unclear what trading relationship Britain will have with the rest of the EU.

The UK cannot negotiate free trade agreements with individual EU countries until it has left the union. Brussels has made it clear that it will start discussing an FTA between the EU and the UK until after Britain has left.

Faced with this uncertainty major banks such as Citi, JP Morgan, Goldman Sachs and HSBC have talked about relocating thousands of staff out of London and into the eurozone while Lloyd’s of London is mulling setting up a more substantial operation across the Channel.

Trump must be laughing at us

Trade associations are queuing up to voice their concern over the problem they will face outside the single market. Foreign-owned carmakers that have located in the UK to take advantage of whatever the Department of Business, Energy and Industrial Strategy offered Nissan to encourage them to stay put. However even Nissan seems not so sure now.

Hard to believe but almost everything is up for grabs, other than the fact that the UK will leave the EU. The single market, customs union, and free movement of people are all up for valid debate. We may or may not get aWhite Paper on the government’s position, but then who knows?

Trump must be laughing at us: he would doubtless have signed an executive order to exit the EU just as he has withdrawn the US from the Trans-Pacific Partnership.

But both May and Trump will have to put themselves and their judgements before their respective electorate in 2020: May (for the first time) in May and Trump in November. It will be interesting to see which has got more of the agenda on the statute book by then (or indeed whether either is still leading their party on polling day).

What a weird and wonderful world we live in where Chinese premier Xi Jinping can gain plaudits from the business elite for setting out the case for globalisation in Davos (while continuing to operate protectionism at home) and the Economic Community of West African States (ECOWAS), a regional organisation of 15 West African countries, can show how a peaceful and democratic handover of power can be achieved in The Gambia.

As May flies into the United States this weekend to become the first leader to meet Trump, people on this side of the Pond will get a good idea of what the Special Relationship will mean for our small island once it’s cast adrift from the European continent. When Trump says buy American, hire American and America first he probably means it.

More about the author

About the author

Phil has run Clarity Economics, a London-based consultancy, since 2007 and, before that, was Economics Correspondent at The Independent.

Phil won feature writer of the year Work Foundation Work World media awards in 2009, and was commended by the Royal Statistical Society in 2007.

He is the author of Brilliant Economics and The Great Economists.

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