As the president of the US provokes trade and economic chaos at home and abroad, an American tells a British friend of mine: “At least your political system removed Truss; we are landed with Trump for four years.”

Unfortunately, when it comes to the worldwide damage being wreaked by Trump and his cronies, the “we” applies to all of us.

For us unashamed Europeans, the (relatively) good news is that the sudden disruption of the US’s post-1945 championing of Europe has confirmed what most people in the UK had already realised: that Brexit was a historic mistake. Unfortunately, however, while being applauded for the way he has risen to the occasion diplomatically over Ukraine, Keir Starmer has yet, I fear, to get the message about the real implications of Trump’s tariff war.

While sounding more “European”, and winning praise from his European counterparts, Starmer is still trying to ride two horses simultaneously.

From the defence point of view, this is understandable: there is a special relationship between the US and UK when it comes to nuclear weapons and intelligence.

But the economy and trade? In contrast to his predecessors in the Oval Office, Trump detests the EU, and has slapped tariffs on it. The EU has, quite rightly, hit back. Trump has also included the UK in his tariff onslaught, but Starmer still seems to be hoping for a “special relationship” trade deal with the US, even though all serious experts in this area know that what the US wants from such a deal would be beyond the pale for the UK.

The time has come for Starmer – the congenital barrister who took up the brief for our membership of the EU and then took up another one, labelled “make Brexit work”, to move on to his next case – to say: “I was right the first time: we must stop talking nonsense about ‘red lines’ and must rejoin our natural economic and trading allies.”

Apart from anything else, this links with the problems that the chancellor of the exchequer, my (almost) friend Rachel from Fiscal, is having with our nation’s finances. Frankly, the idea that a Labour government, which so many had longed for, should be contemplating cutting benefits for the sick and the incapacitated sticks in the craw. It is outrageous, and Starmer and Reeves should be ashamed of themselves.

Lord Acton said “power tends to corrupt, and absolute power corrupts absolutely”. Trump and Putin enjoy absolute power, with consequences that are all too apparent. Our leaders in this country have power and, although I do not for one minute think they are corrupt, I do worry about their judgment.

The obvious problem they face is how to finance a huge increase in the defence budget. But to cut social benefits for the poor, as opposed to increasing taxation on the rich, is verging on the obscene.

In any case, it is unwise to be constrained by arbitrary fiscal rules. My old economics tutor, the Nobel laureate Amartya Sen, wrote a powerful attack some years ago on British governments’ obsession with debt, pointing out that for centuries the nation had lived with a national debt far higher than the ones that former chancellor George Osborne cited to justify his post-2010 austerity regime.

The idea that increases in the national debt saddle future generations with problems is highly questionable. Debt that is aimed at investment, for instance, provides future generations with amenities they may not otherwise have enjoyed.

But – sorry! – back to Brexit, and Starmer and Reeves’s refusal to rejoin the customs union and the single market. As I have pointed out before, the 4%-6% hit to UK economic growth resulting from Brexit reduces the exchequer tax take by £40bn or more annually. How much easier the chancellor’s fiscal problems would have been if from day one this new Labour government had seized on the opportunity to rejoin the EU!

It is interesting that, given current developments on the defence front, even the new German government and senior officials in the eurozone are contemplating relaxing their strict budgetary rules known as the “debt brake”. If the orthodox German economic establishment, not known for its devotion to Keynesian deficit financing, can be adjusting its position, then what about Reeves?

Keynes never said “if the facts change, I change my mind” – a widely quoted invention – but he did say that he was not afraid to change his mind in the light of new information. Current fears about the threat from Putin, whatever temporary “ceasefire” is dreamed up, certainly justify increases in the defence budget. But this could be done via a special issue of bonds, not by penalising the social security budget.