“Brexit” Could Send Shock Waves Across US and Global Economy

The United States is the biggest foreign investor in the United Kingdom, and US firms regard the nation as a base for trading with the rest of the European Union. The US and the UK each have about a half trillion dollars’ worth of foreign direct investment and employ about a million workers in the other. “The heavy-equipment giant Caterpillar exemplifies the dilemma facing American businesses in Britain and the potential ripple effects of the referendum,” writes Ylan Q. Mui for the Washington Post. The firm, headquartered in Illinois, has 16 plants in Britain that employ 9,000. “Much of that production is exported throughout Europe and other parts of the world, eased by the E.U.'s open market and standing trade agreements.” Those agreements represent about 25 percent of Caterpillar’s sales and revenues. Polls suggest support for ending EU membership runs high among UK workers concerned about outsourcing, wage stagnation and job security. Such supporters of Brexit worry about EU regulations and claim that the benefits of free trade did not materialize for them. – YaleGlobal