Kevwe Yerifor Explains Why People in the U.S Need to Start Paying Attention to Brexit

These days, even the most global-minded Americans can be forgiven for being a somewhat preoccupied with economic matters on the domestic side. For example, despite record unemployment in some areas, there is the matter of the two-front tariff battle currently being waged against two of the U.S.’s most important allies in terms of both commerce and security — namely Canada and Mexico — and the even bigger trade war with China, which is smashing the American heartland harder each day. And then there are those eerie signs popping up — like an inverted yield curve, rising inflation, and growing cases of late and missed consumer credit card payments — that portend a looming recession, or even worse, a terrifying great recession

However, despite the fact that Americans have more than their fair share of economic issues at home to deal with and, indeed, worry about, it’s imperative that they realize that what’s going on in the UK — Brexit — is not an isolated event. Brexit can, is, and will directly and indirectly impact North America, and it is critical that North Americans understand the impacts that Brexit will inevitably have.

According to experienced investment management consultant Kevwe Yerifor, who has been keeping a close eye on the economic impact of the U.K. leaving the European Union since the fateful referendum on June 23, 2016. Kevwe Yarifor took the time to explain why people in the U.S. need to start paying serious attention to all things Brexit, the top five reasons are as follows:

1. Retirement savings plans will take a hit.

Many Americans have 401k plans that include stock of companies that have deep financial ties in the United Kingdom. The Brexit referendum 2 years ago saw the Pound Sterling decline sharply afterwards. The lingering uncertainty of Brexit has ushered in high levels of volatility and placed significant pressure on the value of the Pound relative to other currencies. This could equate to reduced earnings, greater losses, lower dividends, plummeting stocks and, shrinking 401k plan values.

Kevwe has observed a growing number of U.S. firms that are moving some or all of their investments to other E.U. nations such as Germany. This could lead to a recession in Europe, which will definitely have a negative impact on the U.S. economy, since the U.S. is the second leading supplier of goods to the U.K. after Germany. The U.S. is also the U.K.’s top export market.

2. It might lead to a destabilizing of the E.U.

The United Kingdom’s decision to leave the E.U. might convince other countries to follow suit — such as Greece. For North Americans this news might be met with a shrug of indifference; kind of a “what happens in Europe stays in Europe” sentiment. However, an unstable E.U. is not good news for Americans, because it will trigger massive security and economic instability.

Kevwe believes that while the U.S. will eventually be able to broker bi-lateral trade deals with individual countries, it is not going to happen quickly or easily. Experts have suggested that if this were to happen that the U.S. may face the following extreme scenario: the United States negotiates a trade deal with a country for two years, only to have the government voted out and replaced by a new regime on the far left or far right that has a diametrically different trade approach and paradigm. It could make the protracted, complex and often tense USMCA negotiations — formerly NAFTA — seem rather lightweight by comparison.

3. It will reduce America’s influence in Europe.

America has long since leveraged its close historical, cultural and economic ties with the U.K. to influence events in Europe. However, once the U.K. leaves the E.U., the U.S. may find itself on the outside looking in — which is not only bad for security, but also for the economy.

Kevwe Yerifor comments that the U.S.’s unique relationship with the U.K. has been economically advantageous for many years; further stating that, losing influence in Europe is not just a political loss but is likely to have a significant economic toll as well.

4. Business travel will get even harder and more expensive.

U.S. firms that conduct business in Europe, and who use U.K. hubs like London as their base of operations, are going to spend more money sending their sales, technical and executive teams into Europe. While the average American may not care one bit about this added cost, the fact remains that inevitably it will trickle down to the sticker price.

To elaborate, Kevwe Yerifor explains that added costs for businesses are like a tax or fee imposed by governments. It will always make its way down the chain, and buyers — not sellers — end up paying the bill. As such, after Brexit, Americans can expect to spend more on products that connect to the U.K. at some point in the supply chain. In 2017, the U.K. exported $9.4 billion in the aircraft industry to the U.S., along with $5.9 billion in machinery, and $3.5 billion in mineral fuels.

5. It may be harder for Americans to travel in Europe.

The U.K. opted not to join the Schengen (“open borders”) system for travel throughout Europe, which means that Americans who plan on traveling from the U.K. to other parts of Europe shouldn’t see any major changes in a post-Brexit world. They will still need to go through passport control when accessing the English Channel to reach the rest of Europe.

While this is not as potentially problematic as the other Brexit consequences, a thickening border is not welcoming news for tourists or business travelers.

Kevwe Yarifor’s Bottom Line

Brexit is taking the U.K. and Europe into uncharted waters, and there are still people globally who are scratching their heads and saying: “is this really happening?” The answer is yes, it is. And while the biggest and most direct impact will doubtlessly be felt by citizens in the U.K., make no mistake: the U.S. will not be economically insulated from what happens across the pond. There will be direct and indirect costs.