After the Rose Garden – 8 – Series conclusion

Part one: Britain’s dilemma
It’s Morton’s fork for poor old Blighty. As our neighbours face Trump’s disruptions, they are held back by the EU’s  clumsy decision-making, its mercantilist instincts and rigid acquis. Meanwhile, for over a century (save for the Thatcher interlude), Britain’s default response to problems has been more government. This leaves us considering two imperfect options:

1. Liberal leadership
   Bridging Europe and the trading world (CPTPP, Canada, etc), leveraging London’s capital markets, and rallying a "coalition of the willing” around a global rule of law.

2. Singapore on Thames
   A pivot to deregulation, tax competitiveness and the shiny new promise of a financial haven, paving the way for a break from postwar collectivism.

The catch? Liberal leadership founders on EU’s self-serving inflexibility, gussied up in its trademark bombast; Singapore on Thames clashes with Britain’s entrenched statism, long tail of provincial underperformance and antipathy to enterprise forged in the excesses of the industrial revolution.

Testing the waters
It may be the doctrine of perfection, but we would have Starmer’s team pursue both tracks in parallel. Lammy should be probing the European appetite for liberal leadership, offering mediation with like-minded partners, joint retaliation against bully-boy tactics from the US, and catalysing ad hoc security pacts. The EU’s reaction to Trump’s tariffs will be telling: if Brussels prioritises protectionism over pragmatism, Plan A looks that much more of a stretch.

At the same time, Reeves should be holding her nose and working up Plan B: slashing tariffs, unwinding self-harming tax rises, and courting offshore capital. Key tests: can the Treasury model elasticities less disastrously than of late? can Labour and Whitehall tolerate a smaller state? This last is the longest shot of all, but needs must…

Non-negotiables
Whichever path is chosen, the UK must

• cultivate reliability.
  Britain needs to build on its reputation for stability and as a good place to do business and resolve disputes, with Goldilocks regulation and policies to restore fiscal credibility with the Treasury imposing zero-based budgeting, pressing for welfare reform and declaring a truce on self-destructive tax hikes. 

• double down on high-tech and services.
  HMG should push London as a global financial hub, including for emerging market bond issuance, streamline financial regulations, and lure US flight capital and skilled emigrants with tax neutrality and legal safeguards.

• re-arm aggressively.
  Defence spending must rise to at least 3% of GDP (we like 5%), with a focus on drones, logistics, stand-off platforms and supply-chain sovereignty.

-o-

Part two: after Trump
Even if the courts limit Trump or MAGA loses in 2028, Pandora’s box will remain open. The US must try to rebuild trust, while we proof ourselves against future whimsy. Here’s how:

Defence
Forward deployments
Europe should encourage more robust US tripwires, troops based near the Russian border, together with forward-deployed materiel (eg, aircraft, fuel, missiles, shells and vehicles). 

Robust supply
Money always talks: if a future US administration is in a contrite mood, let it support Europe with matching funds to reshore arms production, from airlifters to chips to satellites. 

Chokepoint taskforces
The US should also be invited to rebuild trust by co-operating with an independent European naval presence to safeguard the Straits of Hormuz. Similar patrols bringing in Pacific states should safeguard the Malacca Straits, also deterring Chinese threats.

Trade and foreign policy
Energetic diplomacy
We have learned that the impulses of a future US president make global waves. The best hedge is diversification: wider CPTPP accession, ad hoc pacts elsewhere, and “supply-chain islands" beyond American or Chinese dominance. The UK should also join with others in Africa and Latin America to restrain China’s adventurism; and universally to offer reliability in the face of US caprice.

Survivable global infrastructure
The UK should work with others on an energetic programme to deploy, harden and protect subsea cables and surface microwave networks, together with civil and military comms, location and surveillance satellites.

Capital markets
Reduce global dependence on Treasuries
Emerging markets should be encouraged to issue bonds under English law, with the IMF pushed to diversify its reserves.

Plumbing fixes
US secondary sanctions, its extra-territorial anti-laundering rules and tax regime should be circumvented by developing alternative clearing systems, as well as digital or other innovative currencies for oil and other high-volume trade.

-o-

Last words
Confidence in the arrangements underpinning the last eighty years of general peace and prosperity now smacks of a fool’s paradise. There is no easy way back to Pax Americana, now fractured, at worst incurably. Britain must navigate the rubble, either as a broker between blocs or as a nimble outsider. The EU’s rigidity and the shadows of our own past argue for a pivot to the latter, but the mood music isn’t there and as ever, political courage runs short. It may help if we recognise Trump as a symptom, not the disease. Progressive overreach provoked the blow-back which begat him, while the UK’s descent into statism and Europe’s sclerosis well predate him. Whether through liberal leadership or as a Singaporean citadel, the goal for our sea-girt isle is identical: sovereignty without illusion. That means tough choices - and soon.

Miles Saltiel