Analysts at JPMorgan are alarmed. They fear that the US economy may undergo turmoil similar to what the United Kingdom experienced during Brexit.

US President Donald Trump believes that his approach to trade policy, a kind of carrot and stick, has all the makings of an economic masterpiece that will catapult the economy into the stratosphere, JPMorgan analysts comment ironically. However, economists warn that the UK’s post-Brexit experience serves as a “cautionary tale” for America's current economic path.

Recent changes in US tariff policy have come as a shock to the global trade system. Such measures will have far-reaching consequences, economists assert. Earlier, experts noted that shifts in the American and British economies were driven by “discomfort with globalization, immigration, and the decline of manufacturing.”

After the Brexit vote in 2016, a collapse of the UK economy was widely expected. However, the strengthening global economy doubled British export growth to 5%. Besides, painstaking negotiations with the EU helped maintain existing trade conditions and averted a recession. Nevertheless, an “internal shock” remained, analysts emphasize.

In the UK, household consumption growth plummeted ahead of the Brexit referendum from 4% down to 1.5%. Business investment was hit even harder, collapsing from 9% to zero. Against this backdrop, the Bank of England cut interest rates and resumed quantitative easing in an effort to revive GDP.

This slowly building structural deterioration is the most important lesson to be drawn from the UK’s experience. In light of these facts, JPMorgan specialists warn that America could encounter something similar.

Even if the US manages to avoid a recession, the country will likely face a gradual slowdown in economic growth, investment, and productivity, just as the UK did.

The trade shock in the US will not necessarily trigger a crisis, JPMorgan notes. However, the real risk lies in a gradual, hard-to-reverse erosion of economic potential—a lesson worth heeding, especially as policymakers tout the current tariff regime as essential for a new dawn of American exceptionalism, the experts conclude.