Client update - 17th October 2025

Which side of the argument is coming across as having more respect and class? This week when discussing their latest trade escalations, China spoke of “mutual respect” and “peaceful coexistence,” but Scott Bessent, the US Treasury Chief, described a very different encounter when a top Chinese trade official arrived in Washington. Bessent was reported to state that the negotiator turned up uninvited and acted “unhinged.” The Trump circus continues, despite his success in the Middle East peace talks.

Buoyed by this triumph, Trump has quickly moved his attention onto the Ukraine by announcing that he would again meet Russian President Vladimir Putin for talks seeking to end the conflict. The US president announced the upcoming meeting in Budapest in a post on social media after a lengthy phone call with his Russian counterpart, although he has not yet specified when it would take place.

The call came ahead of todays planned meeting at the White House between Trump and Ukrainian President Volodymyr Zelenskyy, as Kyiv seeks additional US military support against Russian attacks. “I believe great progress was made with today’s telephone conversation,” Trump said on Truth Social on Thursday. “President Putin and I will meet in an agreed upon location, Budapest, Hungary, to see if we can bring this ‘inglorious’ War, between Russia and Ukraine, to an end.” Trump said that he and Putin spent “a great deal of time talking about Trade between Russia and the United States when the War with Ukraine is over.”

Perhaps this escalation has come about after Trumps suggestion that the infamous Tomahawk missiles could enter the Ukraine war. Although experts say the Tomahawk missiles are unlikely to be a game-changer on the battlefield, mainly because the US cannot spare many and the required land-based launchers are in short supply, if Trump were to allow Nato allies to buy them for Kyiv, it would send a strong signal to Moscow about Trump’s deepening support for Ukraine. Trump has certainly grown more sympathetic to Kyiv’s plight in recent months, criticising Putin for his continued air strikes on civilian infrastructure in Ukraine.

US politics continues to dominate markets and although the sudden fall in equity values last Friday as China announced curbs on the transport of rare earth materials, and Trump then retaliated with a threat of further 100% tariffs on China, soon recovered. Back in 2024 – it seems a long time ago now, the US election was framed as an existential fight for American democracy. First Joe Biden and then Kamala Harris stood for the rule of law, decency, and unity versus Donald Trump’s tyranny, “chaos and division” on the other. When UK Prime Minister Sir Keir Starmer addressed the Labour party conference last month he took a similar line, telling Britons they face a comparable choice: one that he described as a “fight for the soul of our country” — between himself and Nigel Farage.

The Democrats’ strategy last year did not work and neither will Starmer’s. Despite official numbers showing strong economic growth, US voters saw the election as a choice between a grim status quo — a cost of living crisis, out of control migration and crime — and a disruptive agent of change who gave voice to their deep concerns. The Democrats simply refused to believe that their priorities and those of the donor and activist class (climate change, democracy and social justice) did not match those of the average voter, completely missing the impact of the rapidly rising cost of living and anger at what voters perceived as out-of-control immigration. Instead, Democrats told voters that Trump was a racist and an authoritarian. This narrative began in 2016 when Hillary Clinton lamented that half of Trump’s supporters were “a basket of deplorables,” signalling to a large swath of the American public that Democrats did not want their votes.

For Labour, making this strategy work will be even more difficult, not least because of the UK’s continuing fiscal constraints, slow growth, and high inflation. Since his election, the Trump administration has eroded the rule of law, undermined free speech, and shattered important institutions in the US. Farage may well do the same thing in the UK if Reform manages to win the next election. That risk is four years away. The immediate problem is that voters see a democracy that is failing them because it is not responsive to their fears and basic needs. Name-calling and scare tactics did not work in the US, and it won’t work in the UK. Take note Rachel Reeves, you need to pull some sort of mega-rabbit out of your hat next month, or else Labour’s grip on power will continue to slip, and may well become irreversible. Much to think about. Do have a good weekend.