China and Asia-Pacific

Policy: Trump promises to end the free-trade consensus and confront China over trade and currency manipulation, risking a full-blown trade war. He publicly disavows US security guarantees to Japan and South Korea, who then look to build nuclear weapons for their own defence.

Impacts: In the extreme scenario of a trade war, the City suffers blowback as global trade and finance stalls. The Asia-Pacific security environment deteriorates also negatively impacting trade.

In the more moderate scenario of growing US-China trade skirmishes, the UK moves to play ‘good cop’ with Beijing, winning deals as China seeks to divide old allies. But UK-Washington relations, already strained over China, would deteriorate still further as a result.

Middle East

Policy: Trumps moves to crush Isil, but otherwise withdraws from Middle East; makes harsh demands on Iran which withdraws from nuclear deal. As US withdraws, Iran seeks N-bomb and with Russia becomes newly ascendant Middle East power, destroying US alliance with Saudi Arabia.

Impacts: UK and US divorce on Middle East policy as US policy weakens Saudi Arabia, the UK’s biggest ally in the region. The Trump administration’s unconditional support for Israel stokes terror, becomes recruiting sergeant for Islamist terror and deepens regional instability. Refugee-flows spike, putting further pressure on Europe.