Britain in 2016: the Conservatives are making a mess of running the nation, cutting public services to the bone and tearing themselves apart over Europe, while Labour under Jeremy Corbyn fail to make serious inroads as the opposition party of the day.

Fast forward two years since the Brexit vote and very little has changed. David Cameron might well have vanished from political life and Corbyn has indeed robbed Theresa May of the Tories’ majority in parliament. Yet in terms of progress towards leaving the EU – on the second anniversary of the referendum over the weekend – the government has next to nothing of substance to show for itself.

Remain and Brexit supporters alike are peeved. The political mess and the prospect of a no deal Brexit is forcing major employers such as Airbus to reconsider their investment in the UK – putting tens of thousands of jobs at risk. Amid the chaos it is worth remembering Britain formally leaves the European Union in only 10 months’ time.

Looking back over the past two years, the UK economy has slowed to become one of the worst performing in the developed world. Households are at least £900 each worse off since the vote, while the special relationship with the US – seen before the referendum as a place where Britain could turn after Brexit – is wearing increasingly thin.

When Liam Fox, the international trade secretary, said in July 2017 that a future trade deal with the EU would be “one of the easiest in human history” he could not have been more wrong.

Brexiters try to argue the fault lies with Brussels. They cry the time has come to make it clear to the EU that if their abhorrent behaviour continues, Britain will walk away and move to a world trade deal – yet there could be no worse moment.

The Eurosceptic Economists for Free Trade argue that £140bn in additional economic growth awaits outside the customs union and single market from free deals to be struck with the rest of the world, while resorting to trade with Europe using World Trade Organization rules. So their argument goes, we are better off alone as global Britain. Once more a free trading colossus akin to Britain from the days of empire.

Yet as Donald Trump threatens to slap 20% tariffs on all European cars, imposes taxes on EU steel and aluminium (with no mention of an exemption for Britain outside the EU) there could not be a more challenging time for seeking new trading relationships with the rest of the world. Add to that the view among most economists that – even in a friendlier environment – Britain would be worse off outside the customs union and single market. As one former government mandarin put it: it’s like swapping a meal for a packet of crisps.

Britain enjoys tariff-free access to the EU as well as beneficial trading arrangements negotiated by the EU with the rest of the world, amounting to 33 free trade deals covering more than 60 countries and more than 65% of the UK’s global trade.

Economists at Barclays recently attempted to model the various scenarios for the UK’s potential new trade deals after leaving the EU and concluded: “The likelihood of the UK securing superior trade arrangements to the one it currently enjoys … is slim to vanishing.”

Yet if Fox’s vision of a global trading Britain were to become a reality, his party has done little to support British exporters through their transition from trading with Britain’s traditional partners in the EU to new markets overseas. What assurance does Airbus have, or any company for that matter, that selling to China will become any easier than it already is?

The industrial strategy exists only in name, while the Tories continue to prioritise deficit reduction over active support policies. Down this road lies crumbling failure.

British steel is worried about the impact of Trump’s trade tariffs and is counting on EU countermeasures to protect itself. At home in Britain, the industry has had little support from ministers to date.

Economists believe that any step away from Britain’s current arrangement with the EU – even straight into another free trade agreement with one or several countries from elsewhere around the world – would lead to lower economic growth, given how integrated the UK is with the EU at present.

British companies are more integrated into global business supply chains than the average for wealthy nations in the Organisation for Economic Co-operation and Development. Most of our connectivity is with Europe.

While it is an open question whether Trump would exempt Brexit Britain from trade tariffs on cars, steel and aluminium, British industry’s reliance on supplies from the EU means it would struggle to even make the goods we would want to sell to the US outside EU membership.

As many as 1,100 trucks carrying parts used in the automotive industry trundle through British ports from the EU each day with comparative ease, delivering about £35m worth of components just in time for production in plants across the country. As much as 60% of the parts in the renowned British brand that is the Mini come from the EU, while many components go back and forth across borders before the vehicle is even completed.

Airbus makes about 40% by value of its aeroplanes in the UK, thanks to just-in-time delivery and no rules of origin arrangements as part of the EU customs union. Britain’s aerospace sector is the largest in Europe, employing more than 100,000 people, with the EU accounting for about half of exports.

Although it is true that trading on WTO rules will not trouble the aviation industry because there are no tariffs for aircraft and parts, the sector is highly connected to Europe and has worries instead about non-tariff barriers – such as border checks and complying with similar regulations. Such divergence could cost the British aerospace industry as much as £1.5bn a year.

Airbus argues frictionless borders are critical for flying aircraft wings made in Broughton, north Wales, to its French factory in Toulouse without additional bureaucracy and customs checks. Every week of delays in delivering aircraft to its customers could result in €1bn (£879m) loss of revenue.

As Theresa May heads to Brussels this week for the latest EU summit, she will have the company’s warning ringing in her ears and the voices from 100,000 anti-Brexit marchers in London over the weekend. However, at the same time, hardline Brexiters are telling her to get ready for a no-deal Brexit.

Two years on from the Brexit vote she needs to pick sides as the dangers of leaving the EU become increasingly clear. Although the issues underlying the vote remain real and urgently need tackling, a hard Brexit is not the answer. Project Fear is becoming a reality.