Michelle ThompsonThe Chancellor states she “understands what President Trump aims to address” with his tariffs, ahead of her talks with the US Treasury Secretary in Washington on Friday.
Rachel Reeves highlighted similarities between how both the US and UK governments came to power, driven by voter frustration with the economy.
Ahead of her meeting with US Treasury Secretary Scott Bessent, Reeves mentioned that the UK government was working hard to secure a trade deal with the US. Earlier this week, she indicated that the UK could reduce tariffs on US car imports from the current 10% to 2.5% as part of a broader agreement. “We are all grappling with the issue of tariffs, but I understand why President Trump wants to address global imbalances in the system,” she remarked.
Trump has already imposed a 25% tariff on all car imports to the US, including those from the UK. The UK also faces a 10% tariff rate and is negotiating with the US, along with several other countries affected by even higher tariffs, most of which are currently on hold until July.
Some US officials have expressed optimism about the prospects of a deal. Last week, US Vice-President JD Vance mentioned there was a “good chance” of a trade agreement with the UK.
Reeves also noted she had been collaborating closely with European and Canadian counterparts to remove trade barriers and said discussions at the G20 this week had been challenging: “Clearly, there are tensions. We’re all monitoring what’s happening in our domestic bond and equity markets, and we know that uncertainty is detrimental to investment in the UK economy.”
She emphasized that there would be no celebrations if the UK secured a deal, as other countries would still be affected.
Despite her focus on US talks, Reeves suggested that strengthening trade relations with the EU was a higher priority. The UK is preparing for a summit with the EU in May to “reset” their relationship. “I understand the attention on our trade ties with the US, but our relationship with Europe is arguably even more significant, as they are our closest neighbors and trading partners,” she explained.
She also mentioned meeting with finance ministers from France, Germany, Spain, Poland, Sweden, and Finland during her visit to Washington, emphasizing the importance of rebuilding trade relationships with European neighbors in a way that benefits British jobs and consumers.
