A correspondent asks a very good question. The other day I posted a wonkish piece about the economics of a trade war, which argued that there would be huge disruption but the overall cost would be smaller than many people imagine — maybe 2-3% of GDP. The correspondent asked how to reconcile this with typical estimates of the cost of Brexit.

Such estimates — I’ve done my own back-of-the-envelope version, which is more in less in the same ballpark (cricket field?) as other estimates — typically run somewhere around 2 percent of British GDP. Yet even pessimists predict a much smaller impact of Brexit on British trade than the huge declines I’ve been suggesting from a Trump-created trade war, which I have just decided to call Trumpit. Aren’t these estimates inconsistent?

No, not really, because Brexit isn’t about higher tariffs; it’s about higher trade costs, higher costs of doing business across borders. And that makes a huge difference.