…March 2025

The fundamental problem of publishing a summary of all the March madness on 1st April is that it’s going to read like an April Fools story, but the joke is very much on the rest of us.

March has been another month seen from the wrong side of the looking glass, free from any kind of logic. Instead we are all moving around the chess board at the whim of the Orange King. The latest Trumpian decree is a blanket 25 percent tariff on all car imports to the US, which will hit the South Korean, Japanese and EU economies particularly hard. Fortunately Britain is ahead of other manufacturing countries by having already wrecked its own automotive sector. Yay – at last we have a win from Brexit.

It’s hard to keep up with the dizzying pace of these tariffs, which are announced, softened, re-applied, rescinded and then re-announced in a constant cycle of madness. Unsurprisingly, stock markets globally have fallen as Trump has threatened further tariffs against “all countries.” Business craves stability but the only constant now is change. The only logical answer is to shorten supply lines as much as possible to limit exposure to this trade war, but that will inevitably push up prices. The immediate threat is to the first world economies which are having to recalibrate at a breakneck pace. But this recalibration will inevitably filter down to the global south economies as well.

And yet it is possible that this disruption will create more opportunities for digital manufacturing. Digital technologies, including printing and additive manufacturing, allow for more distributed manufacturing with short supply lines that are less affected by global economic headwinds and can reduce both logistics costs and carbon footprint. 

Trump’s trade war has to be seen in the context of China’s remarkable economic growth over the last two decades, which is largely down to wilfully undervaluing the Chinese currency. Western governments and businesses have sought to profit from cheap prices by engaging with Chinese manufacturers without worrying about the loss of jobs and manufacturing capability in their home markets. The result is that whole industrial sectors across Europe, such as steel making in the UK, which were on their knees before Trumps’s tariff spree, are now on life support.

March also saw the publication of the January figures for the British economy, which showed that GDP shrunk by 0.1 percent, which apparently was a surprise to many economists though it should have been obvious to anyone paying attention. Manufacturing output fell by 1.1 percent, with construction also down and services up only 0.1 percent as consumers cut back on hospitality. Most businesses have frozen new hirings following the rise in employers national income from the last budget. 

In truth, the UK manufacturing sector is in a fragile state. Manufacturing was the driver behind Britain’s wealth in the heyday of Empire but in recent years the government has relied on the service sector to keep the economy just above the waves of recession. April LaRusse, head of investments at Insight Investment, told the BBC: “It’s not only manufacturing. It’s generally industrial production has been quite weak. Everything is more expensive, costs going into manufacturing are more expensive, labour costs are more expensive, and although the economy has been growing overall it’s not exactly been growing rapidly. To top it all off, we’ve had high interest rates as well.”

Luckily, the British chancellor Rachel Reeves has responded to these concerns by continuing her one woman comedy revue around Parliament, with a new Spring statement slashing welfare costs. In theory this should make up for a £9.9 billion shortfall to the Autumn budget caused by higher than expected interest rates. That was before Trump’s latest round of tariffs. Reeves is now inspiring comparisons with the former British prime minister Liz Truss, who at least had a plan even though it was completely bonkers. Reeves is now the only European finance minister not to realise that the scale of the threats facing her requires a fundamental reset in her approach. This is largely because treasury officials are still haunted by the turmoil that followed Truss’s disastrous budget. 

In contrast, the EU nations have rethought their fiscal rules to allow more borrowing and give themselves more flexibility. Instead Reeves has ruled out rejoining the European single market and tax rises for those that can afford them, whilst trying to cope with rising inflation, falling economic confidence and an enormous leap in defence spending. Predictably, this is not going well.

The independent Office for Budget Responsibility has suggested that rising debt interest payments and weaker economic growth will reduce tax receipts and push up government spending throughout this current parliament. Analysis by the Resolution Foundation thinktank claimed that that poorer households will be £500 a year worse off by the end of the decade. And another thinktank, the Joseph Rowntree foundation, went further, predicting that the average family will be £1,400 worse off by 2030, representing a 3 percent fall in their disposable incomes, whilst the lowest income families will be £900 a year worse off, a 6 percent fall. 

Alfie Stirling, director of insight and policy at JRF, argued: “Fiscal pressures should be met through tax reform. There are a number of options to raise revenue from those with the broadest shoulders, while also supporting growth by removing perverse incentives in the tax system and staying within the government’s manifesto commitments.”

Most nations predict further economic turmoil as the trade war that Trump has unleashed starts to take effect. But that’s only one half of the immediate problem. The other half is the risk of an actual war and the sudden realisation right across Europe that without American forces there is very little to stop Russia pushing past Ukraine and into Europe. Consequently, the EU has agreed an €800 billion plan to allow its member states to borrow for their defence. European governments are also rewriting their fiscal rules – the degree of borrowing and the associated risks that they believe their economies can withstand – to allow for more defence spending. The incoming German Chancellor Friedrich Merz has already changed Germany’s debt rules and signalled a massive increase in borrowing.

In a way, Trump has got what he wanted in that Europe is now putting a lot more money into its own defence. But he must have assumed the Europeans would buy even more American arms whereas last month’s instant freeze on arms shipments to Ukraine has caused panic that American weapons systems may be virtually useless as the Americans can no longer be trusted to supply ammunition for them. Instead, Europe is now rebuilding its own military industrial capability, which will inevitably compete against American arms suppliers. Ironically, expanding defence manufacturing may also help European companies weather the storm from the American trade war, as manufacturers look to switch to arms production. 

Meanwhile, Trump has continued to insist that the US will take ownership of Greenland, saying there’s a “good possibility that we could do it without military force” but refusing to rule out such force. The US Vice President JD Vance visited the US Pituffik base in Greenland, highlighting that the US already has a foothold that could be used to invade Greenland. 

This further underlines that NATO is no longer a functioning force since one member, Denmark, is now in the process of strengthening its defensive capabilities in the territory, as much against American aggression as any threat from China or Russia. This also directly affects the other Arctic nations, including Canada, which is also having to fend off unwanted advances from the US, as well as Finland and Sweden. 

And of course other nations will have to reconsider whether or not they want to  continue hosting US forces. After all, what value does Germany get from the giant Ramstein base if it’s no longer a reliable part of Europe’s defence? Japan may have to take responsibility for its defence, but will the Americans give up the controversial Okinawa base? As I write this article in Lincolnshire on the Eastern coast of the UK, I can hear the thunder of American jets in the skies above as they line up for practice at a nearby coastal bombing range. 

The Americans have attempted to negotiate a ceasefire between Ukrainian and Russian forces but this does not seem to have produced any result. That’s not surprising since Trump’s approach to ‘peace’ is for America to take ownership of disputed areas, displacing both warring parties so that American companies can exploit the economic assets, by mining rare earth minerals, operating infrastructure or developing real estate.

At the same time, the fragile ceasefire in the Gaza Strip appears to have collapsed with the Israelis restarting the bombing campaign and preparing for another ground offensive. More worryingly, the Israelis have also attacked Hezbollah targets in Lebanon, while the Houthis in Yemen have restarted their attacks. The common thread is Iran, which funds Hamas, Hezbollah and the Houthis so it’s hard to see any peace on the ground without first dealing with Iran.

Then there is the Mad Hatter’s tea party, also known as SignalGate, in which senior members of Trump’s inner team discussed military action in Yemen on the commercial app Signal, which is not secure enough for such conversations. Strangely, no members of the American military were included but the group did invite one journalist, meaning that we’ve all been able to laugh along at their ineptitude. It appears that none of this group fully grasped the main political reason behind the bombing – reining in the Houthis to put pressure on Iran – instead mistaking the secondary reason of protecting shipping in the red sea as the main objective. 

The conversation also revealed the visceral hatred of Europe at the heart of the US government, and the huge gulf between European and US leaders. Plus, there was the ridiculous expectation that Egypt and European countries would pay for the cost of this bombing. Needless to say, there were no apologies or resignations over this security breach; instead the main participants mostly lied about the content and insulted the journalist involved, such are the values that now govern America.

These are the same values that inform Elon Musk’s Department of Government Efficiency, with whole departments shut down amid claims of wasteful spending that are later proved to be false. Thus the Institute of Peace, which sought to counter Russian efforts to foment conflicts around the world, has been shut down; The department of education broken up, because who needs education; and a radical downsizing at the department of health and human services, particularly its vaccination capability, that will leave the US struggling to deal with another covid-like pandemic. 

That said, there is still plenty of support for the Trump administration from within America. Jim Continenza, CEO of Kodak, told me recently: “Covid disrupted everything and we haven’t got back to normalcy. And that’s what we are looking for. I think they are doing a really good job on this now. Elon Musk is doing a really good job on transparency. All I’m asking for is accountability. Tax payers should know where their money is going. And if we have transparency then the world will be in a better place.”

However, there is some evidence that the US is losing its brand appeal amongst tax payers outside of the US and particularly European consumers. This includes some Tesla cars being vandalised and reduced demand for flights to the US. After all, McDonalds, Levis, Tesla and so on aren’t just brands or products; they represent the promise of freedom and opportunity that the sheer scale and success of America seemed to guarantee. Fascism, stupidity and greed are a much harder sell. 

Or maybe not. Elon Musk has merged his X social media platform with his artificial intelligence venture, xAI. This has allowed him to put a value on X of $45 billion, with xAI paying $33 billion of stock and investors holding $12 billion in debt; most analysts have indicated that the true value of X is closer to a third of that total. In theory xAI gains a real time feed of training material from X users for its Grok chatbot though it’s not clear how useful that will be, given the often vitriolic and downright false nature of much of the content on X. Still, this is life, but not as we know it.