Brexit is causing concern and complications for promotional product distributors in the United Kingdom and the United States.

The U.K.’s planned economic and political decoupling from the 28-nation European Union has seen a flurry of activity this week.

Notably, Britain’s parliament voted Tuesday in favor of a Withdrawal Agreement Bill that establishes the terms on which the U.K. will leave the EU. However, later the same day, Parliament rejected a proposal that would have seen the U.K. exiting the EU by the end of October.

The latter vote put the Withdrawal Agreement in limbo, triggering related fallout, with pro-Brexit British Prime Minister Boris Johnson wanting to push the October timeline and other lawmakers in Britain and the European Union, including European Council President Donald Tusk, expressing support for extending the timeline for Britain’s formal departure. A possible new timeline could have the U.K. exiting the EU by the end of January 2020.

Following PM @BorisJohnson’s decision to pause the process of ratification of the Withdrawal Agreement, and in order to avoid a no-deal #Brexit, I will recommend the EU27 accept the UK request for an extension. For this I will propose a written procedure.

— Donald Tusk (@eucopresident) October 22, 2019

The seemingly ever-shifting nature of Brexit’s means and timing has triggered uncertainty in the U.K. and continental European marketplaces. That’s led to ripple effects in the promotional products industry for companies in the U.K., as well as U.S. firms with a presence in Europe. “Brexit and the uncertainty in Europe will continue to have an impact,” Jo-an Lantz, president/CEO of Top 40 distributor Geiger (asi/202900), told Counselor.

Geiger has a robust presence in the United Kingdom through its subsidiary GeigerBTC, which just this week announced another U.K.-based acquisition. The company continues to experience growth, but Geiger and its British subsidiaries have had to be nimble and adaptable as they try to best navigate Brexit. In addition to anticipating and prepping for potential new processes and rules for moving goods in out and of the U.K., Geiger has taken steps to establish a firmer continental foothold in a bid to circumvent some of the disruption. “We set up a logistics center in Rotterdam (in the Netherlands) as a point of distribution for imports into Europe,” Lantz told Counselor.

Earlier this year, Jay Deutsch, CEO of Top 40 distributor BDA (asi/137616), told Counselor that the Washington-based firm is taking what steps it can to prepare for Brexit, which he described as “something that’s unprecedented. We’re paying close attention to the situation and are working with our clients and supply chain partners to anticipate impacts. We’re also reviewing all of our compliance requirements from an accounting perspective, as well as ensuring that we’re well-positioned geographically to support our clients.” BDA is amply vested in the U.K., having opened an office outside of London in 2016 and having acquired two British promo firms in 2017.

As some British promo executives see it, the most pressing issues are the undetermined timing of Brexit and whether or not Britain will ultimately withdraw with or without a deal in place with the EU. Matt Franks, CEO of Fluid Branding (asi/195718), one of the U.K.’s largest distributorships, laid out the situation for Counselor.

Matt Franks, CEO, Fluid Branding

“If the U.K. leaves with the deal that’s on the table, the pound will strengthen, meaning the U.K. becomes more expensive for overseas export,” Franks told Counselor. “However, confidence will return as uncertainty fades, and trade will likely move more freely again. There will be a relatively short period of chaos while people become familiar with new processes and tariffs, but this should be outweighed by the collective ‘sigh of relief’ that will be felt across Europe. The promo market will see an increase in both domestic and cross-border demand.”

Meanwhile, if the U.K. exits without a deal, then the period of chaos and uncertainty will be considerably longer, Franks said. “Whilst the pound will be good value for EU purchasers, the confusion over trading with U.K. companies will deter a significant number of EU-based companies from doing so. There will be a small surge of ‘Made in the U.K.’ business, which U.K. manufacturers will benefit from, but this is still a small part of the U.K. promo market.”

Nonetheless, Franks thinks the most important next step politicians can make is to decide definitively on the nature and timing of Brexit, as that will help bring stability to the U.K./European marketplace. “General confidence within end-user brands should increase with market stability, and therefore end-user spend should increase after the dust settles,” Franks told Counselor. “The amount of dust created just comes down to which type of exit we see.”