Donald Trump has made decision-making in the UK much more difficult.

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Good morning. Westminster and the world are waking up to the return of Donald Trump, metaphorically and in my case literally. (You can follow the story on our live blog here.) Keir Starmer celebrated his historic election victory.

There are many striking similarities between the Starmers government and Harold Wilson's 1964-1970 government. But the most important may be the following crucial differences: Wilson's Labor government was able to benefit from reduced defense and military spending as the country ceded control of nearly all of its colonial possessions and withdrew many of its military obligations. Most of Britain's global responsibilities were ultimately transferred to the United States.

Defense spending will almost certainly have to rise more than planned in the UK, and it is unclear whether either party is prepared to have such a conversation beyond the opposition's platitudes about reducing government inefficiencies by cutting foreign aid. I can't.

Inside Politics is edited by Georgina Quach. Read previous versions of our newsletter here. Send your gossip, thoughts and feedback to [email protected].

Trump's Favorite Word: Tariffs

I would say that if Trump does what he promises to do on foreign and trade policy, it seems very unlikely that this administration will be re-elected in the next few years.

He promised to impose tariffs of up to 20% on all US imports and fines of 60% on Chinese goods, while the EU plans to retaliate with a two-phase trade plan. If President Trump keeps his promise on tariffs, an area with few real constraints, the IMF predicts the impact could wipe out 0.8% of global economic output next year and 1.3% in 2026. The funding scenario is optimistic. It assumes fairly moderate retaliation, which may be unlikely given the need for elections that some countries may feel will trigger a counteroffensive.

The UK will be particularly affected, given its size and openness to the world. The National Institute of Economic and Social Research estimates that the resulting trade war could reduce UK economic growth by 0.7% in the first year.

This means that the government's comprehensive spending review this spring has become more difficult, coupled with pressure to increase defense spending. The moment of truth about the government's 2027 spending plan has also become more difficult as it faces more difficult choices about taxes and spending.

For a Labor government, its foreign, economic and trade policy mandate has become more complex. All in all, this means that Kemi Badenoch's chances of winning the next UK general election have certainly increased significantly this morning.

Now try this

I'm off to the Cotswolds for a few days to celebrate my wedding anniversary, but the newsletter will continue without me. See you all on Monday!

Top news of the day

Get out of the book | The Treasury breached its legal obligations by failing to disclose potential $9.5 billion overspending by UK government departments ahead of the March budget, the fiscal watchdog said yesterday.

Tube strike canceled | Strikes planned on the London Underground this week and next were called off after last-minute talks between union leaders and the British capital's transport authority.

friends in tent | New Tory leader Kemi Badenoch has promoted former chief security officer Chris Philp to shadow home secretary, giving him a prominent frontline role for allies and rivals alike. Old friends and many rising stars who supported her early in the race were a big part of her shadow cabinet lineup.

It might be quicker to go back to court | Alan Bates, a key campaigner in the British Post Office Horizon scandal, has threatened further legal action to secure redress for victims if payments are not set in stone.

better treatment | Long-awaited mental health legislation will be introduced by the Government today to end the use of prison cells for people in crisis and limit the detention of people with autism and learning disabilities.

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