The United Kingdom’s protracted exit from the European Union –– or “Brexit” as it has come to be known –– may finally be completed before the end of the year. And while the changes that Brexit is sure to generate will affect people living in the UK and the EU first and foremost, businesses in the United States are likely to be affected as well. Indeed, the United States operates at $5.5 billion goods-trade surplus with the UK. The question for US business owners then, is, what will Brexit look like for American entrepreneurs?
The UK is supposed to leave the EU before October 31. New prime minister Boris Johnson has repeatedly banged the drum for Brexit and has said on multiple occasions that he plans to deliver it even if he has to resort to a no-deal Brexit. A no-deal Brexit is a hypothetical whereby the UK leaves the EU without a trade deal in place or a solution to the backstop issue in Northern Ireland. It is possible that a no-deal Brexit could occur.
However, it’s also possible that Brexit could be delayed further –– even indefinitely if a general election is called again. The bad news here is that we’re still not sure what “type” of Brexit the UK is going to pursue, and that makes it difficult for business owners to prepare for it. No-Deal Brexit Possibilities Several things could happen if the UK leaves the EU without a deal. First, the UK may cling tighter to its already strong economic relationship with the
US. The UK trades with the US more than any single country. Yet, this isn’t necessarily good news for US business owners. No-deal Brexit could lead to a severe depreciation of the pound in conjunction with an appreciation of
the dollar. Suddenly, US exports could become much more expensive and therefore cost-prohibitive for UK companies. Furthermore, the ripple effects that Brexit could cause –– such as recessions in the UK, Germany, and other European countries –– could make it even more difficult for US businesses.
Brexit Best Practices
One of the best things that companies can do to ensure that they don’t get caught off guard by Brexit is to stay informed. The situation is fluid and it can (and probably will) change in significant ways. What’s more, it’s a good
idea to keep your staff abreast of developments as well –– particularly if you work closely with organizations in the UK or EU. You may even consider hiring a learning consultant to help educate your staff on important
business practices or policy changes.
Bottom line: the sooner you begin to prepare for Brexit eventualities, the better.