Trump’s trade war put the UK on the back foot. His actual war may break us | Larry Elliott

Trump’s trade war put the UK on the back foot. His actual war may break us Larry Elliott The government looks ill prepared for the coming stagflation storm – its ‘keep calm and carry on’ approach won’t survive a blast of reality B ritain is facing the most severe energy shock since the early 1970s , but have no fear: the government has a plan. Details of said plan are still a little sketchy, but will be unveiled in the fullness of time. No need to panic. Keep calm and carry on. It remains to be seen whether the UK is better prepared to cope with the fallout from Donald Trump’s war with Iran than it was with the pandemic six years ago. To be honest, that wouldn’t be difficult. Yet it is not exactly comforting that ministers are sending out a “we have your back” message to the public while at the same time seeking to reassure the financial markets that any help will be limited and targeted. To be fair, contingency planning is not easy when you are dealing with someone as unpredictable as Trump. But given Britain’s heavy dependence on imported energy and food, this line will only hold for so long. The economy was already in poor shape when the war started just over a month ago. Unemployment had been steadily rising during 2025 and growth came to a virtual standstill in the final quarter of the year. Now it is being hit by a colossal supply shock as exports of oil, gas and fertiliser from the Middle East have dried up. This time last year there were fears of global recession after Trump announced “liberation day” tariff increases on goods imported into the United States. In the end, the global trade war was merely a dry run for the real thing – a proper war in a part of the world that happens to be not only volatile, but crucial for the global economy to boot. These days I write only fortnightly but much has happened in the past two weeks – none of it good for the global economy. Asia is the continent most dependent on energy exported from the Gulf and it is there that ...