Starmer will be relieved that Trump’s Scottish foray went well. The President clearly enjoyed his golf and being the centre of attention throughout his visit. His warm words for Starmer and the length of time that the Prime Minister was given with the President will have been welcomed in Downing Street, and Trump’s language on both Putin and Israel will be seen in London as a small step towards the UK’s worldview. Starmer will see the criticisms that he got in the British press for kowtowing to Trump as having been worth it. 

Globally, markets have calmed. Trump’s tariff policy now looks clearer than it did in the Spring. His priority is to raise revenue to finance planned tax cuts. Negotiations with major trading partners will be about finding the level that the trade partner is willing to bear to avoid a trade war. A 10% or 15% tariff looks likely to become the normal baseline. 

Even direct threats from Trump to fire the Chairman of the Federal Reserve failed to spark much market reaction. 

That said, serious risks remain. A baseline US tariff of around 15% is a lot higher than the most-favoured-nation (MFN) tariff levels in place before Trump returned to office. “Trade deals” with the UK and EU as yet have no legal standing and depend on the goodwill of a mercurial President. Talks with China could fail and spark a new round of ‘tit for tat’ tariffs and export restrictions. 

Download the full report 

Sir David Lidington, Senior Counsel 

H/Advisors Cicero