Keep calm and delay on until Brexit
(This post originally appeared on The Washington Post)
A lot of people were shocked when British voters chose to leave the European Union in June. Markets dropped. The pound plunged. A prime minister resigned. Fast forward two months later and American companies are still concerned about how this will affect them.
And they have cause to worry. The U.K. has the fifth biggest economy in the world. American companies purchased more than $5.1 billion and sold more than $3.9 billion worth of products alone just in June. Some economists are predicting a significant economic contraction in Britain and others believe the costs of re-negotiating deals and building new policies will be costly. Optimists, though, think the decision will bring more than $64 billion a year to the U.K. economy, and provide more opportunities for science, farming and the car industry.
In truth, no one really knows. That means if you’re a small business with significant customers (or vendors) from Britain you certainly have cause for concern. Time will be needed to adjust to this new reality, and the more time the better.
That’s why a report in England’s Sunday Times brings good news for many. It seems Brexit won’t happen as fast as originally thought; most were preparing for Britain to leave the EU by the end of 2018. Now, ministers in the government are telling the business community privately that it looks more like the end of 2019. Upcoming French and German elections are being blamed. But the report cites that trade departments in Britain’s government also won’t be ready in time, so more time will be needed.
People who want a quick exit are going to be angered, according to the article. But for both British and American companies, especially small businesses, the added time should be a welcome reprieve to help them prepare for what could be a big change.