…February 2025

February 2025 will chiefly be remembered as the month when the Western alliance, which is mainly between Europe and North America but also includes Australia and New Zealand, cracked wide open after 80 years of economic and military cooperation and domination.

The story so far: The US president Donald Trump has solved the Palestinian issue by reimagining it as a real estate deal, and brought peace to Ukraine by surrendering the country to Putin, while also sticking it to the evil empire of Canada. He has stopped all the losers in the world from ripping off America over aid, rewritten the rules of global trade and Made America Great Again by tearing up most of the federal government. It’s all fantastic and beautiful and someone else is going to pay for it all. 

I almost feel sorry for the British prime minister Keir Starmer, congratulating himself one day on a successful meeting with Trump, only to watch it implode on live TV the next evening. Starmer is a fool. He gave away his only real card – a visit with the King – and got nothing but vague suggestions in return. At least the Ukrainian president Zelensky had the balls to insist on more concrete promises. 

Trump has been described as mercurial, prone to mood swings and policy shifts, but in reality he has been remarkably consistent, particularly in his disdain for Ukraine. Instead, the problem has been the other western leaders and their unwillingness to believe that Trump might really mean all the wild things that he says. The only winners so far have been the Russian leader Vladimir Putin, who appears to be getting everything he wanted, and the British chancellor, Rachel Reeves, as the conversation has moved on from her dodgy CV.

Reeves is fast becoming more of a liability than an asset, and it’s only a matter of time before Starmer replaces her to save his own skin. This month’s reports that she had exaggerated parts of her CV, and had been investigated over her expenses in a previous job feel like a familiar pattern. It was not the first time that she had been accused of exaggerating her economic credentials and she’s previously had to apologise over plagiarising some parts of her book. None of that would matter if she actually had some idea of how to fix Britain’s poor economic performance. So far her solutions have centred around green lighting extra runways at Heathrow and Gatwick, which have wrecked the government’s environmental credentials and will take 10-20 years to come to fruition. She has also set about relaxing corporate regulations, even though she still has to find £3 billion to tidy up the Thames Water mess, which is entirely caused by weak regulation. 

Luckily, the Bank of England has cut the base rate from 4.75 percent to 4.5 percent, which will reduce the cost of borrowing. However, the January figures revealed a jump in inflation to 3 percent, mainly due to a colder than expected winter, and the bank has predicted that inflation will rise to 3.7 percent this year on the back of higher energy prices. More worryingly, several economists have warned of the risk of stagflation. The talk from early February that inflation will come down this year, leaving room for up to two further rate cuts, has disappeared as the reality of Trump’s tariffs have come into focus.

It is hard to keep up with these tariffs, which are threatened, then rescinded, and later reinstated at a dizzying rate. By the end of February only China had been hit with additional tariffs, but Canada and Mexico as well as the EU in particular and European nations in general are all in the frame. British officials initially hoped that Trump would not include the UK because its trade deficit with the US is mostly on services rather than goods. This just indicates how badly Starmer has misread Trump’s intentions. Ever helpful, Trump has claimed that the VAT sales tax is a form of tariff, which it really isn’t as it is levied on most goods and services, regardless of where they originate from. But it is at least funny watching our elected leaders running around like headless chickens, desperately pleading with Trump to spare them, whilst offering up one concession after another, mainly around increased defence spending. 

There’s no evidence that any of this has cut much ice with Trump, who made his name as a reality TV star and is now busy creating an alternate reality. I’ve spent the last three years trying to extricate myself from a domestic abuse situation and the one thing I have learned is that you cannot deal with such people on any kind of rational level; they will distort every situation in order to control it and even as you fix one issue they will deliberately fabricate another. The only rational solution is to cut all ties and deny them the control they crave, and then box them into a corner to limit any further damage they might do.

The trade war that Trump is busily stoking operates at two fundamental levels. Firstly, there is the economic carnage that will cause higher inflation and lower GDP for many economies around the world, starting with America’s former allies such as Canada. This will also mean massive disruption to sales markets and supply chains for most vendors, including those in printing and manufacturing. 

The second level is the weakening of security ties and the risk of actual conflict. After all Trump is hardly likely to commit US forces to defend any erstwhile allies whilst he is still conducting a trade war against those countries. This particularly affects Taiwan, which is clearly in Beijing’s sights, and has a successful semi-conductor industry that Trump would like transferred to US ownership. Trump is still after Canada and Greenland and has made it clear that he expects Ukraine to hand over its mineral wealth.

Trump’s supposed peace deal for Ukraine was in reality just a ceasefire while the Americans popped over and mined all the rare earth minerals they could get their hands on. Not only would Russia have been able to keep the 20 percent of Ukraine that it has already stolen, but would have been free to come back for the rest of the country once the Americans had gorged themselves on the valuable minerals. Indeed Trump has made it clear that he wants to bring Russia in from the cold and re-establish a trading relationship. 

Zelensky has said that Europe on its own cannot guarantee Ukraine’s safety without the backing of the US. It’s more accurate to say that Europe can’t guarantee its own security because most European militaries are tightly integrated into NATO, which is structured around the US at its core. Even the British Storm Shadow missiles that the Ukrainians have used so effectively require US satellite access for targeting information. 

The question is no longer whether or not Trump will continue to support Ukraine; it is now whether or not the US will honour its NATO commitments if a European member is attacked. The power of NATO lies in its ability to convince any likely adversaries that they would have to face the enormous military power of the US. By questioning that promise, Trump has put a serious crack in NATO, which together with his tariffs and trade disruption has wrecked the post-1945 world order that has worked so well for the West but not necessarily for the global south. And with a war already raging on Europe’s Eastern flank it is essential that the European leaders get over their shock, grow some backbone and put an alternative defence system in place that better reflects the new reality. 

And Trump is correct in one way – that it is quite reasonable to expect Europe to pay for its own defences. The idea of America as leader stems from the second world war where it was clear that America was the only democracy that had the industrial capability to build vast quantities of weapons and the manpower to use those weapons. But that was before the emergence of the EU, which has tied together all the small European nations into one large bloc. However the EU is still an unfinished project because the nation states have yet to figure out how much real power they are willing to centralise through Brussels and what degree of control they each want to retain for themselves. So far the European response has mainly been to hold emergency summits to offer a deal that might bring Trump back into the fold though that ship has already sailed. 

Instead, the only real solution is for Britain to jump back into European politics and not just for the occasional emergency summit. At the very least Britain should rejoin the European customs union in order to reverse the economic decline that has followed Brexit. But it makes far more sense for Britain to reclaim a leadership within the EU for the sake of defence. 

It does not matter how much money we commit to defence, or how many of our citizens we are willing to sacrifice on the battlefield. Modern wars require an industrial manufacturing base and the EU is by far the most efficient way to direct the industrial capacity that exists across Europe, both to grow our economies in peacetime and to be able to militarise that industrial base quickly should war become inevitable. The only question is how long will it take for European leaders to realise this? Of those leaders, only Olaf Scholz had the foresight to successfully lose an election so that he would not have to face up to Trump. There’s no sign yet that Merz, Macron, Starmer or any of the other losers that we call leaders are yet ready to reach for the big boy pants. 

Then again, the European leaders have stood by for the last 20 years and watched as the right wing populist movements have gained momentum to the extent that the MAGA acolytes now feel that it’s OK to throw nazi salutes. They have completely failed to understand that this signals the failure of liberalism and the need to restructure their economies to include all of their electorates. I’ve argued many times that the place to start is the redistribution of wealth with higher taxes for the better off, followed by tax breaks for investment in infrastructure, and tax cuts for the lower paid to get more money moving through the economy. The Conservative philosophy of tax cuts for the wealthy, funded by cuts to public services, is the economic equivalent of pouring sand in a carburettor.

Meanwhile Trump, with the help of his billionaire stooge Elon Musk, has been dismantling the US Federal government, ranging from park rangers and Medicaid staff to those tasked with ensuring the safety of the country’s nuclear infrastructure. Essentially Musk’s cost cutting is enacting a harsher form of the austerity than the Conservative government inflicted on Britain in the early 2010s. The damage to the UK’s infrastructure was so severe that even though we can now recognise it, we cannot afford to fix it. American voters will discover just how deep this sort of carnage goes in the next decade or so.

And then there is the inexplicable attack on Diversity, Equality and Inclusivity programs, and the rolling back of measures meant to limit the damage from our changing climate. An unfortunate side effect is that many corporations have followed Trump’s lead and cut their own DEI programs and commitments to sustainability.

What Trump is really doing with the huge cuts to federal agencies such as USaid is testing the limits to the power that he has as president. He is daring the House of Representatives, or the Senate, or even the Supreme Court to intervene and challenge his ability to simply issue orders as he likes, without any kind of debate or study into the justifications or likely effects of those actions. The question for American voters to ask themselves is, did the founding fathers really mean for one man to have so much power, or did they mean for the different branches of government to hold the balance against the wielding of such power?

The assumption is that the madness will only last two years until the mid-term elections, or four years at the most. However, there’s no guarantee that Trump will relinquish power when his terms ends. After all, he has sidestepped the constitutional requirement that the senate should confirm the appointment of anyone given significant federal power by simply handing control of much of the federal government to Musk but without giving him an official role in government.

Trump is also doing away with those agencies responsible for independent oversight to such an extent that there may not be anyone left with the legal authority to challenge him if he decided to simply stay on beyond his four year term. Essentially he has allowed Musk to carry out a coup and rip out most of the safeguards within the US system that could well enable Trump himself to stage an actual coup. The best that Europe and the rest of NATO can hope for is that they manage to separate their defensive capabilities away from the US systems and to cut their economic reliance on the US before this becomes a problem for the rest of us.