I think the government genuinely does not realise what a big mess it has already created with the Internal Market Bill, and how continuing is going to make it a lot worse. They actually believe the US and EU are wrong. https://www.theguardian.com/politics/2020/nov/09/lords-vote-set-to-put-no-10-on-brexit-collision-course-with-biden
What ultimately happens with the Internal Market Bill is that either the government has to back down, in which case demonstrating weakness and poor judgement, or not, in which case no EU or US trade deal, and poor relations with both for the next four years.
As of today the UK government is on a crash course with reality, taking us all with it. Antagonism with all three trade superpowers, and no deals, lies before us unless the government now obviously u-turns. A government and country trapped by abysmal judgement and tactics.
Also, the UK throwing a hissy fit at the same time as an outgoing US President is attempting no turn his country into a dictatorship by the time honoured tradition of invalidating an election in which he lost isn't great timing. Rest of the world has more important issues...