Chris Mason: Trump's Impact Makes Uncertainty the New Norm for the UK

"The world has changed," said the Chancellor – and just hours later, it changed again.

This phrase has become increasingly familiar in Westminster over the past few days, often used to explain the shift in priorities and spending cuts announced by Rachel Reeves in her Spring Statement.

When government officials say the world has changed, what they often mean is that Donald Trump is back in the White House, leaving them uncertain of what comes next.

In the latest example of political theater and policy in action, Trump declared in a press conference that Washington would impose a 25% import tax or tariff on all cars America purchases from abroad.

According to the Society of Motor Manufacturers and Traders, the second-largest car export market for the UK after the EU is the US. Two and a half months into Trump’s second term, the UK government has opted for a strategy of keeping a low profile and saying as little as possible in public.

An apt saying could be: "If in doubt, say nowt," ever avoiding comments on the president’s actions that could antagonize him.

Meanwhile, there have been attempts to secure a US-UK trade deal that would offer some protection against the president's erratic maneuvers. But this just highlights that 

uncertainty has now become the norm, and much of the government's endeavours are spent trying to predict possible changes and either negotiate or mitigate their consequences.

The independent forecaster, the Office for Budget Responsibility (OBR), tasked with the daunting challenge of making economic projections amid such volatile uncertainty, still attempts to do so.

With a notable degree of understatement, the OBR states in its latest economic and fiscal outlook, which accompanied the Chancellor's Spring Statement, that "following the election of a new US administration in November, US trade policies and those of its major trading partners remain in flux."

And that’s putting it mildly.

In a detailed five-page analysis, the OBR explores various scenarios triggered by a 20 percentage point increase in US tariffs.

The forecaster warns that the most severe scenario, involving retaliation, "would nearly wipe out the headroom against the fiscal mandate" – effectively undoing all the budgetary adjustments and trade-offs that Reeves has been managing in recent weeks.

Quite a thought.

For this reason, many ministers will be eager to prevent such a scenario from unfolding.

And all of this is unfolding just days before what Trump has called "Liberation Day" next Tuesday, when a wave of new tariffs is expected.