According to the chancellor, the UK’s trade relationship with the EU is “more important” than its relationship with the US.
Although Rachel Reeves is currently focused on talks with the US, she indicated that a greater priority was to move closer to the EU on trade.
Following her Friday meeting with US Treasury Secretary Scott Bessent, Reeves tweeted that the US and the UK hope to reach an agreement that is “in both our national interests.”
As part of a larger agreement, she hinted earlier this week that the UK might reduce its 10% tariff on US auto imports to 2.5%.
In an effort to “reset” their relationship, the UK is getting ready for a summit with the EU in May.
Because they are our closest neighbors and trading partners, she said, “I understand why there is so much focus on our trading relationship with the US, but actually our trading relationship with Europe is arguably even more important.”
“I have been meeting with Scott Bessent this week while I am in Washington, of course, but I have also met with the finance ministers of France, Germany, Spain, Poland, Sweden, and Finland because it is crucial that we reestablish those trading relationships with our closest European neighbors, and we are going to do that in a way that benefits British jobs and British consumers.”
The chancellor’s comments were described as “a statement of fact that the EU is our largest trading partner” by a Downing Street spokesperson.
The spokesperson also emphasized Sir Keir Starmer’s earlier remarks that it was a “false choice between the EU and the US.”
Reeves said this week that the government is “flat out” trying to reach a trade deal with the United States.
She has made it clear that she supports “free and fair” trade and the development of U.S.-UK relations in areas such as technology.
Conservative shadow business secretary Andrew Griffith told Sky News that the Conservatives would “absolutely be seeking to prioritize” a deal with the US over the EU.
Griffith contended that since the UK already had a tariff-free agreement with the EU on goods, a deal with the US would be the “next best choice if you want to grow the economy after the chancellor’s crash.”
Daisy Cooper MP, a Liberal Democrat and Treasury spokesperson, stated, “The chancellor is absolutely right that our trading relationship with Europe is more important, but the government’s approach so far shows these are little more than empty words.”
“Despite going above and beyond to appease Donald Trump, this administration has not done much to boost economic growth by expanding trade with Europe.”
“We are all having trouble with tariffs.”
Reeves said she “understands what President [Donald] Trump wants to address” with his tariffs before meeting with her US counterpart in Washington.
According to Reeves, there were similarities between how the US and UK governments were elected based on the public’s discontent with the economy.
We are all struggling with the tariff issue, but I believe that people understand why President Trump wants to correct some of the system’s global imbalances,” she said.
Trump has already subjected all auto imports into the US, including those from the UK, to 25% tariffs.
Along with dozens of other nations hit with even higher levies, the UK is seeking to negotiate an agreement with the US administration and faces a broader tariff rate of 10%. The majority of these levies are currently on hold until July.
The chances of a deal have been viewed favorably by some US officials. US Vice President JD Vance stated last week that there was a “good chance” that the US and the UK could reach a trade agreement.
Reeves added that she has been collaborating closely with her counterparts in Canada and Europe to lower trade barriers and that discussions at the G20 table this week have been challenging.
“Clearly, strains exist. We all keep an eye on developments in the domestic bond and equity markets, and we are all aware that uncertainty is detrimental to investment in the UK economy.
