Britain’s relationship with the European Union is “arguably even more important” than trading links with the United States, Chancellor Rachel Reeves has said, ahead of a high-stakes meeting with her American counterpart.
Ms Reeves, who is currently in Washington for the International Monetary Fund’s spring meetings, is expected to discuss a potential US-UK trade deal with Treasury Secretary Scott Bessent on Friday afternoon.
Speaking to the BBC, the Chancellor stressed that the Government is working “flat out” to secure an agreement that could help alleviate the impact of tariffs imposed by former US President Donald Trump earlier this month. However, she was clear that strengthening ties with Europe remains a more significant priority for Britain.
“I understand why there’s so much focus on our trading relationship with the US,” Ms Reeves said. “But actually our trading relationship with Europe is arguably even more important, because they’re our nearest neighbours and trading partners.”
Downing Street backed the Chancellor’s comments, with a spokesperson saying her remarks were “a statement of fact that the EU is our largest trading partner.” The spokesman also highlighted previous statements by Prime Minister Sir Keir Starmer, who has insisted it is a “false choice between the EU and the US” when it comes to Britain’s international trade strategy.
Ms Reeves’s meeting with Mr Bessent marks the conclusion of a three-day diplomatic tour during which she also held discussions with finance ministers from the EU, Canada, and China, aiming to deepen the UK’s global trade links following the shock of Mr Trump’s recent tariff announcement.
In particular, Reeves has sought to “reset” relations with the EU, while also pursuing a cautious thawing of the UK’s strained relationship with China after years of minimal contact under the previous Conservative Government.
After her meeting with Mr Bessent, Ms Reeves is scheduled to meet Kevin Hassett, a senior economic adviser to Mr Trump, in a bid to further understand the former President’s trade priorities.
Mr Trump’s 4 April announcement saw sweeping levies introduced, including 10% tariffs on UK exports and 25% charges on vehicles, steel, and aluminium. Speaking to the BBC, Ms Reeves said she “understands what President Trump wants to address” when tackling global trade imbalances, but insisted that Britain would continue to defend its own economic interests.
“We’re all grappling with this issue of tariffs but I think there is an understanding why President Trump wants to address some of the global imbalances there are in the system,” she said.
Despite concerns that the 10% tariff level could be a “baseline” that Mr Trump is unwilling to reduce, Ms Reeves remains optimistic that “a deal can be done” with Washington. However, she has ruled out making key concessions reportedly sought by the US, such as weakening British food standards to allow more American agricultural imports, or amending online safety laws to appease concerns about freedom of speech.
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There is speculation that a compromise deal could involve a reduction in US car tariffs in exchange for Britain lowering its tariffs on American-made vehicles. Ms Reeves declined to rule out such a possibility during interviews this week.
Reacting to the Chancellor’s comments, Liberal Democrat deputy leader Daisy Cooper said Ms Reeves was “absolutely right” to prioritise Europe but criticised the Government’s broader strategy.
“This Government has bent over backwards to appease Donald Trump but barely lifted a finger to unleash growth by boosting trade with Europe,” Ms Cooper said.
“It’s time for the Government to get serious about our trading relationship with Europe by ripping up the red tape from the botched Brexit deal, agreeing a capped youth mobility scheme, and negotiating a UK-EU customs union.”
With the stakes high and trade relationships under close scrutiny, Ms Reeves’s comments underscore the Labour Government’s pragmatic approach to rebuilding Britain’s global economic alliances in a post-Brexit world.
