So it's bad but could have been a lot worse. As WhatsApps pinged between British Ministers and aides last night during President Trump's game-show-vibe press conference, the over-riding emotion was one of relief that UK exports will be spared the worst of the US tariffs announced on 'Liberation Day'. A cross-economy tariff of 10% 'to rebuild the US economy',  (plus 25% on steel, aluminium and cars) is a lot easier to deal with in political and presentational terms than the punitive 20% applied to the EU or the 34% applied to China.  Critically it allows Sir Keir Starmer and his Chancellor Rachel Reeves to claim that at least some of the famed fiscal 'headroom' remain intact - the Office of Budget Responsibility had modelled a 20% scenario rather than 10%.  

Business Secretary Johnny Reynolds this afternoon told the House of Commons that the Government’s 'pragmatic' approach has allowed the UK to be included in the lowest tariff band though in truth, Reynold’s reference to the 'fair and balanced trading relationship that already exists between our two countries' is closer to the mark - the US runs a small trade surplus with the UK.  

 After relief, the second emotion was a sense of greater certainty.  Such is the enduring importance of the US economy to global business sentiment that virtually every politician and major company on earth was waiting and watching for Trump's pronouncements.  The close knit secrecy of Team Trump meant that no one in any foreign Government (and hardly anyone in the Trump administration itself) knew what the President was going to say before he revealed his hastily assembled scoreboard to the cameras.  Had the circle of trust been wider someone could have pointed out that the French départements of Guadeloupe and Martinique (10% tariff) should probably have received the same tariff as the EU (20%), or that the Australian territory of Heard and McDonald Islands (29%), inhabited only by seals and penguins, should probably have been spared altogether.

 Governments and markets hate uncertainty and at least officials now have something to get their teeth into. Something to analyse, something to model, and ideally something to avoid altogether.  Reynolds confirmed today that talks on the trade deal this Government (and the last one) have sought with the US remain ongoing, and there is still some hope that interim deals can be done before or after tariffs come into effect at 00:01 on Saturday.  Reynolds also launched a consultation with UK businesses on which tariffs could be included in any retaliatory tariffs applied to the US - though yesterday Rachel Reeves told a Commons committee that it remained the UK's intention to avoid doing so if possible. This itself highlights the delicate balance the UK must maintain between aligning with its EU allies (who are almost certain to retaliate) and the US.

 Keir Starmer regularly refers to the 'false choice' between Europe and the US, but the reality is that post-Brexit Britain is confronted with choices everywhere.  Does it seek greater defence independence from the US, does it seek a closer political and defence relationship with the EU? Does it continue to retain and develop its 'Five Eyes' intelligence network with the US? Is NATO doomed or can it be revived? Should the UK now seek a closer relationship with China or India? Fundamentally is the US still an economic and defence ally at all - is the very concept of 'The West' a remnant from the 20th Century?

 Geopolitics is back with a bang in British politics and the global economy, and will remain so even post-Trump's second (or third?) term.  So let's enjoy the emotion of relief because the emotion of greater certainty is an illusion.

 If you'd like to discuss what all this means for your organisation do get in touch with publicaffairs@cardewgroup.com