Will Trexit Be More Successful Than Brexit?
Welcome to the Real Estate Espresso Podcast, your morning shot at what’s new in the world of real estate investing. I’m your host, Victor Menasce.
On today’s show, we’re looking at recent history. We know that history doesn’t repeat itself exactly, but it often rhymes. We’re going to look and see what we can learn from recent protectionist sentiments that were supposed to help.
These days, the mainstream media are drawing parallels between the current trade war and the 1930s. But the world is a very different place today compared to what we saw in the 1930s. Global trade was a fraction of what it is today. The cost of transportation was exponentially higher, we didn’t have wide-body cargo jets, nor container ships capable of carrying twenty thousand containers in a single load. The ships back were slow, small bulk carriers.
The Trade War of the 1930s resulted in a 60 percent reduction in global trade. However, The impact was much more confined because international trade constituted a smaller percentage of each country’s GDP compared to today. We actually have a much more meaningful comparison to discuss – Brexit.
Brexit was the UK’s attempt to regain control over its national agenda leading up to the 2016 referendum. The central themes revolved around sovereignty, immigration, finances, regulation, and trade. However, in the years since Brexit, the U.K. has demonstrably suffered as a nation. The British pound has lost value, and the U.K. has lost a lot of jobs in manufacturing. There is no question that the U.K. is not better off today, and it’s been isolated both politically and economically.
Now, the U.S. seems intent on parting ways with the WTO and negotiating individual trade deals with each nation based on criteria defined by the current White House. These goals sound incredibly similar to the Brexit arguments. It begs the question: is Trexit going to be more successful than Brexit? As you think about that, have an awesome rest of your day. Go make some great things happen and we’ll talk to you again tomorrow.
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