Despite good first quarter GDP numbers in Europe, there is a problem looming:
Hard data looks backward. The latest soft numbers — think of consumer-confidence indicators, surveys of business executives about their planning for inventory, production and employment, along with their expectations for the business climate — reflect fear about the future.
Europe is worried about lots of things, including a chaotic British exit from the European Union, the U.S.-China trade war and its own faltering trade relationship with the U.S. Recently, worries for the future have gotten worse.
Talk in Britain is that there might have to be a "hard" Brexit (although perhaps that term is propaganda, how about a "free" exit?) given that the European Union continues to play hard ball with Britain in talks on the term of the Brexit. The EU is seemingly more interested in punishing Britain for leaving in order to set a stern example to any other restive EU member with similar ideas.
But if America is willing to make up for the EU trade punishment as much as we can with a trade deal until the Europeans come to their senses, doesn't that offer combined with European problems looming give Britain some leverage to get a better deal for trade even after a "free"Brexit?
