Brexit has caused several uncertainties and implications for trade relations in the UK (Yueh, 2017, p. 55). That is, there are uncertainties about the long-term impact of Brexit on multinational companies that had their headquarters in the UK before Brexit, such as the Unilever and Vodafone companies among others. Notwithstanding, it is clear that Brexit has implications for exports, imports, supply chain, employment and strategic planning among others things, within the said companies. This paper briefly discusses Brexit impacts on the multinational companies, which had headquarter(s) in the UK before the Brexit.
a) Unilever
Brexit caused a drop in the UK capital market value. Precisely, soon after the Brexit, the Unilever Company relocated its headquarter from London to the Netherlands, indicating that their shares would be stronger within the European capital market (Daugėlienė and Puskunigis, 2018, p. 270). Subsequently, the relocation ended the dual operating structure, which had made it possible for Unilever to have headquarters in both the UK and the Netherlands. Succinctly, the relocation of the Unilever Company headquarters demonstrates the negative implication Brexit had on the capital market value in the UK, which consequently affects the business operations of the multinational companies.
b) HSBC
After the Brexit, HSBC indicated that it would transfer about 20 percent of its bank investments to Paris. The business environment in the UK became unsuitable for business expansion after the Brexit; accordingly, HSBC stakeholders preferred to expand its business in Paris where they believed the business environment was favourable. Precisely, the Brexit has created an environment that discourages investors to make investments; accordingly, the country is set to lose more revenues.
c) Toyota
Generally, the tariff cost for the multinational companies based in the UK has increased since the Brexit (Daugėlienė and Puskunigis, 2018, p. 270). For instance, in 2017, Toyota spent an additional $1billion on tariffs; a trend that could collapse this industry if measures are not taken to restore proper trading links. Precisely, though the investors within the multinational companies based in the UK expected stability in the market, such has not been realised; but instead, the consequences have become severe as illustrated by the increased tariff rates. Failure to respond appropriately to this issue will force some of these companies to limit their investments or even close down.
d) Vodafone
Vodafone Company is undecided whether to relocate its headquarters from the UK or not; however, it has implied that it will relocate if the unfavourable business conditions persist (Sutherland, 2017, p. 20). Since the Brexit, it has been difficult for Vodafone among other multinational companies to conduct business in the UK due to the limited access to the European market. For instance, there are uncertainties over regulations on procurement and taxation among other issues. However, before the Brexit, these companies were trading freely with limited restrictions on the market. Vodafone also complained that Brexit has made it difficult for it to hire talented labor outside the UK due to the weakened euro that occurred after the vote to withdraw from the EU.
e) White Paper
From the preceding discussions, it is clear that the UK needs to revise its policies towards trade. Brexit White Paper contains proposals on how the UK intends to relate with the EU in connection to trade. The proposals in the White Paper, therefore, need to give due consideration to EU market operations, focusing on removing trade barriers that have made trading in the UK difficult.
Briefly, Brexit generally has a negative impact on the multinational companies based in the UK. The decision limited market access to companies based in the UK. Accordingly, it is necessary that the UK take policy reforms that will facilitate the opening of the market links that the Brexit has blocked.
References
Daugėlienė, R., Puskunigis, P., 2018. The Scope and Specificity of Economic Relations Between the EU and the United Kingdom in Brexit Case, in: Brexit. Springer, pp. 265–283.
Sutherland, E., 2017. The implications of Brexit for the governance of telecommunications markets in the United Kingdom. Digital Policy, Regulation and Governance 19, 2–20.
Yueh, L., 2017. Britain’s Economic Outlook after Brexit. Global Policy 8, 54–61.
