Trump tariffs: Yet another example of colossal, upending change

A week ago, Westminster was digesting the chancellor’s Spring Statement and all the talk was of a tightrope walk and precarious public finances.

Next, let’s go back nearly two decades to the financial crisis and the historically poor growth and negligible average earnings growth that has afflicted the UK ever since.

And then recall the calling card of the Labour Party at the general election last year and its “mission” to deliver sustained economic growth.

What is happening to economic growth? It is flatlining.

And now this: Donald Trump’s tariffs.

The implications are four dimensional, complicated, disrupting – and the precise reactions and consequences of those reactions are largely unknowable and unmappable.

But let’s be frank, they don’t provide a benign backdrop conducive to predictable, steady economic growth.

President Trump’s lament about the consequences of deindustrialisation in America and his reaction to that is prompting the UK and others to have to think nimbly and devote considerable bandwidth to preparing contingencies for what might happen next.

How should we understand and grapple with the magnitude of what we are witnessing?

The prime minister is not a man known for flights of rhetorical fancy.

So it is instructive to see how he is articulating this moment.

He claimed it was “the beginning of a new era for trade and the economy” and not just this, but was the second such paradigm shift we have witnessed just in the last few months.

There was already the beginnings of a new era for defence and security, he suggested, with the UK, Germany and others committed to ramping up spending on the military.

The economic shift also under way, he said, needed the “same recognition”.

I know what you might be forgiven for thinking.

Politicians and, yes, journalists both have a weakness for hyperbole, and so maybe all of this is a bit self serving and over the top?

Perhaps.

But one of the most memorable conversations I had at Westminster this week was with a vastly experienced senior figure, thoughtful and reflective and also not prone to exaggeration.

(And, incidentally, not instinctively warm towards the Labour Party).

He was convinced, after a half century in politics that has taken in the Cold War, the Gulf War, 9/11, the Iraq war and the 2008 financial crisis that it is this moment, not those, that represents the single most profound for colossal, unpredictable, upending change.

Look beyond the actions and theatre of the Trump White House to the macro trends of the 21st century.

There is the migration of economic and political heft to the East.

There is the migration of many, many people towards the West, digitally savvy about the relative riches here, climate change and conflict among the push factors for some too.

There is the internet revolution upending business models and working patterns, inventing social media and concentrating vast wealth and influence among a clutch of global behemoths like Apple, Meta, Amazon and X.

And there is the artificial intelligence revolution in the infancy of its influence.

Exhilarating, unnerving, discombobulating, norm shredding.

All this is the context and in part the explanation for the political tussles playing out and the personalities at the centre of them.

And, my goodness, it is not an easy time to be leading a western democracy.

Ask any of those in office now, or any of those recently ejected.

President Trump is arguably an illustration of this and a collective reaction from America to some of the changes I’ve mentioned above.

And meanwhile, the prime minister is hoping for the best – that he can find the money to boost defence spending, convince the country and the markets that he can manage the national finances and negotiate a better trade deal with President Trump.

Pull these things off and perhaps a few others and maybe just maybe that longed for economic growth comes next.

But again and again events pop up to complicate and confound any apparently linear path towards it.

And it’s happened again.