Rachel Reeves: UK won’t be Trump tariff target due to trade deficit
Rachel Reeves has argued that the UK won’t be a target for Trump’s trade tariffs because we have a “trade deficit” with the US.
The Chancellor argued President Donald Trump was “concerned about the trade surpluses” with various countries around the world, but stressed that was “not the case” with the UK.
It comes after Trump has threatened to double tax rates for foreign nationals and companies in the US in what he said was a bid to hit back at “discriminatory” duties on American firms.
He set out a memo on trade policy on Monday, referring to an obscure bit of the US tax code – Section 891 – allowing him to impose higher taxes on foreign citizens and firms in America.
Speaking to Sky News while at the World Economic Forum in Davos, Reeves said: “The UK has a trade deficit with the United States.
“President Trump is concerned about the trade surpluses that countries around the world are running with the United States: That’s not the case for the UK.
“And so we will work with the Trump administration to get a good deal for Britain and make the case as well for the continuation of that strong trade and investment relationship between our two great countries.”
Pressed on Trump’s comments about EU tariffs being a way for the US to “get fairness”, she said: “Well, I believe in free and open trade, and I’ll be making that case to my counterparts in the United States.
“I’m excited about the opportunity to work with the new Trump administration. Trade between the UK and the US is worth £300bn a year. A million Brits work for American firms.
“A million Americans work for British firms. So our economies are closely intertwined, and I look forward to enhancing and strengthening that relationship.”
And quizzed on the UK’s relationship with the US, in the context of her recent visit to China, the Chancellor said: “Well, of course I’ve already been to the US twice since I became Chancellor of the Exchequer, and Britain has a strong, close relationship, a special relationship with the United States.
“When my opposite number, Scott Bessent, is confirmed, I hope to meet him as soon as possible to talk to him about how we can work together to grow both our economies, improve our trade, and indeed improve our economic security.”
Bessent, a billionaire hedge fund manager, is Trump’s pick for Treasury secretary. His nomination is currently undergoing the Senate approval process.