Editor's Note: Below is a complimentary research note written by National Security analyst LTG Dan Christman. To access our Macro Policy research please email sales@hedgeye.com.

The UK's Strategic Blunder With Brexit  - 04.18.2017 Brexit cartoon

For nearly two weeks, it’s been difficult on the domestic U.S. news front to focus on anything but the Georgia Senate run-off, the battle over certification of state electors, and especially the horrific scenes on January 6th of the mob assault on the U.S. Capitol building.

But global events march on. In the last hours of 2020, the wearying, four-year BREXIT debate ended, with a trade deal that avoided the dreaded British “crash-out.” And as we course more deeply into the new year, it’s fair to ask what this lengthy, neuralgia-inducing debate actually produced. 

The worst outcome for the UK was certainly avoided: a no-deal BREXIT would have been far more damaging to Great Britain than what the UK and EU negotiators cobbled together at the 11th hour. However, it’s also true that Boris Johnson and the British Tory Party have presided over the most serious strategic blunder for the UK in 65 years.

Not since Anthony Eden conspired in October 1956 with France and Israel to invade Egypt and “recapture” the Suez Canal has a decision been more consequential for Great Britain’s global standing.  

That particular 1950’s foreign policy misadventure has always been a personal interest. I was 13 when it happened, and it led to my first serious look into international affairs. Interestingly, there are parallels in looking at the Eden and Johnson decisions.

The most intriguing parallel? Their terrible misjudging of U.S. Presidents! 

In Eden’s case, even though he knew President Eisenhower from WWII, Eden’s sense was that Ike would be consumed by that fall’s Presidential election countdown; and if there was a foreign affairs focus, it would be on the Hungarian uprising.

The British PM badly miscalculated. Ike was furious; he quickly led an emergency UN session on the invasion and eventually forced an embarrassing withdrawal of the invading forces; Eden resigned less than three months later.  

For Boris Johnson, a similar miscalculation prevailed in his belief that he had a deep friendship with President Trump - one that would secure a U.S.-UK trade deal to demonstrate domestically the benefits of BREXIT. That clearly didn’t happen, and will not any time this year.

Further, Johnson’s relationship with the president-elect has already been tarnished by intemperate remarks in 2016, when he described Barrack Obama as America’s “part-Kenyan president.”    

In the end, there is general agreement on the economic and business downsides of the BREXIT deal: reduced potential economic growth, for example (from 2.0% to 1.7%, according to a respected German bank); a failure to capture the single-market’s benefits for the UK’s large and robust financial sector; and no understanding on a coordinated defense and security policy between Brussels and London. 

But the most profound long-term consequences lie in the strategic realm. Probably the best summary was provided recently by the Eurasia Group’s Cliff Kupchan, who described the eventual BREXIT agreement as “an act of self-isolation that will inevitably diminish Britain’s weight in the world.”

Most of us undoubtedly share the nostalgia of the U.S.-UK “special relationship;” and the two countries clearly will remain close allies.

But going forward, as numerous commentators have summarized over the last two weeks, the first calls by Washington to Europe are increasingly likely to be to Berlin or Paris or Brussels, not to London.

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LTG Dan Christman, USA, Ret. serves as Hedgeye Potomac Research’s Senior National Security Analyst, providing deep insight into international affairs and national security. Most recently, Dan provided strategic leadership on international issues affecting the business community for organizations such as the US Chamber of Commerce. Dan’s long history of leadership includes his service as a United States Army lieutenant general and former Superintendent of the United States Military Academy. He served in highly visible and strategically important positions and four times was awarded the Defense Distinguished Service Medal, the nation's highest peacetime service award.

He also served for two years as assistant to the chairman of the Joint Chiefs of Staff, during which time he traveled with and advised Secretary of State Warren Christopher. He was centrally involved during this period with negotiations between Israel and Syria as a member of the Secretary's Middle East Peace Team. Further, Christman represented the United States as a member of NATO's Military Committee in Brussels, Belgium.

Graduating first in his class from West Point, Christman also received MPA and MSE degrees in public affairs and civil engineering from Princeton University and graduated with honors from The George Washington University Law School. He is a decorated combat veteran of Southeast Asia, where he commanded a company in the 101st Airborne Division in 1969.