What Would a No-Deal Brexit Mean for U.K./U.S. Relations? 6 Things to Keep in Mind

    With the recent changing of the guard at 10 Downing Street, a no-deal Brexit is now the operative scenario. Come October 31, it’s likelier than not that the United Kingdom will crash out of the European Union before inking a formal trade agreement with the bloc.

    This historic event could have all sorts of first-, second-, and third-order ramifications, the extent of which no one really knows for sure. As American business leaders hedge their bets about the future of U.S.-U.K. relations following the United Kingdom’s exit from the European Union, it’s time to take a step back and ask precisely what a no-deal scenario might mean for the countries’ famed “special relationship.”

    Spoiler alert: The implications aren’t all bad. Indeed, a no-deal Brexit could lay the groundwork for an unprecedented period of growth and opportunity in transatlantic relations — if U.S. political leaders are willing to work together to pursue it.

    1. A Trade Deal Could Come Together Quickly

    On a recent visit to London, U.S. national security advisor John Bolton expressed optimism that a U.S.-U.K. trade deal could come together quickly after October 31, especially on key manufacturing goods. That bodes well for negotiations, at least.

    2. The Two Countries May Grow Closer Out of Necessity

    More broadly, the U.S. and U.K. administrations see eye to eye on a number of key political issues, making it more likely that they’ll find common ground on issues of mutual interest. This is a significant change from a status quo marked by tension between the governments of President Donald Trump and Prime Minister Teresa May.

    3. The U.S. May Gain Some Leverage Over the U.K.

    If the U.K. crashes out of the E.U. without first inking a trade deal with the bloc, the U.S. may find itself in a position of strength — that is, dealing with a United Kingdom desperate to make a deal with one of its largest trading partners.

    4. The Irish Backstop May Hold the Key

    In the end, the Irish backstop — the assurance that the U.K. won’t reimpose a hard border on the Ireland-Northern Ireland frontier — may prove key to negotiations between the E.U. and U.K. Prime Minister Johnson has taken a hard line against the backstop, leaving E.U. ministers questioning his commitment to negotiations.

    According to the National Review, multiple British ministers have put in overtime on North American turf this summer, working furiously to shore up relations ahead of the U.K.’s expected crash-out. But it may be for naught. In the United States, Congressional Democrats are cool to any U.S.-U.K. trade deal that violates the Good Friday agreement, as a hard border surely would. They have the votes to block it, should things go that far.

    Is a No-Deal Brexit Really in the Cards?

    Let’s back up a bit. When we say that a no-deal Brexit is the “operative scenario” for relations between the United Kingdom and the Continent, it’s not the only scenario that could obtain between now and the end of October. Indeed, both sides have real incentives to make one last push to ink a substantive trade and customs agreement before it’s too late.

    Still, while we shouldn’t assume that a no-deal Brexit is assured, we also can’t pretend that it isn’t the odds-on outcome. It’s worth reiterating that newly installed Prime Minister Boris Johnson appears in no mood to back down from his tough stance on the Irish backstop, which many within and without his government believe is a poison pill for E.U. negotiators. 

    One thing is for certain: The events of the next few months will determine the trajectory of the U.S.-U.K. relationship — and the relative strength of the two countries’ economies — for years to come. That’s reason enough to pay attention.