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Rachel reeves (Image: Getty)
Rachel Reeves at the IMF meeting in Washington (Image: Getty)
Chancellor Rachel Reeves is in Washington today for her first proper meeting with the Donald Trump’s treasury secretary, Scott Bessent.
But in remarks that could infuriate her US counterparts, she insisted the UK cared more about trade with the EU than with America.
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The Chancellor said: "I understand why there’s so much focus on our trading relationship with the US but actually our trading relationship with Europe is arguably even more important because they are our nearest neighbours and trading partners."
She has embarked on the Hail Mary trip hoping to convince the US to end tariffs on British goods, and in particular to scrap or cut the 25% tariff on imports of cars following warnings that thousands of jobs are at risk in the UK car industry.
3 months ago13:15Jonathan Walker
Downing Street slaps down Rachel Reeves
Rachel Reeves was rebuked by Downing Street after insisting the EU is a more important trading partner than the US - just hours before she kicked off talks in Washington designed to end Donald Trump’s tariffs on British goods.
She made the comment before meeting US Treasury secretary Scott Bessent to plead for an end to tariffs, with talks focusing on a 25% fee charged on cars, the UK’s biggest export to the America.
Ms Reeves said in an interview: “I understand why there’s so much focus on our trading relationship with the US, but actually our trading relationship with Europe is arguably even more important because they are our nearest neighbours and trading partners.”
But Downing Street declined to back the Chancellor. The Prime Minister’s spokesman said: “It’s a false choice to make between the two. Both are of incredible importance to us, and we treat both with enormous respect.”
The Government is trying to balance efforts to negotiate a “reset” with the EU, likely to include signing up to a controversial youth mobility scheme, with attempts to forge a new US trade deal which manufacturers say is vital to save jobs.
Official figures last night confirmed the US was the UK’s largest export partner in 2024, with America purchasing British-made goods worth ￡59.3 billion.
Germany was the UK’s second-largest export market, although sales to the EU as a whole were almost three times those to the US.
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A 'youth mobility scheme' between the EU and UK is likely
Sir Keir Starmer was accused of bringing back freedom of movement “by stealth” as Germany revealed the UK was close to agreeing a new “youth mobiility scheme”. The German ambassador to the UK has said he is “really optimistic” about the prospects of a youth mobility scheme deal being reached, following a meeting between Sir Keir Starmer and European Commission president Ursula von der Leyen.
But Shadow business secretary Andrew Griffith said: “This government by stealth is trying to take us back into freedom of movement. “They may call it a youth mobility scheme but if nobody ever gets removed at the end of their time here then its immigration by another name."
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3 months ago10:23Jonathan Walker
Keir Starmer appears to have axed plans for 'coalition of the willing' in Ukraine
A Cabinet minister has said that “all options remain on the table” when it comes to support for Ukraine in the event of a peace deal – but declined to say whether troops would definitely be sent.
Environment Secretary Steve Reed said that a “strong alliance of countries” is needed to “make sure that any peace deal can hold”.
It comes as Prime Minister Sir Keir Starmer said that negotiations to try and end the war are at an “intense stage” and reiterated calls for Russia to “come to the table and agree to a ceasefire”.
The Times newspaper reported on Friday that the UK is likely to abandon plans to send troops to Ukraine as risks are considered to be too high.
The paper said that military trainers would still be sent.
3 months ago10:05Jonathan Walker
Rachel Reeves tells US that EU matters more
The Chancellor has insisted that the EU matters more to the UK than America, just as she begins talks with the US about a trade deal.
The remarks are unlikely to be helpful as she begins discussions in Washington.
She told the BBC: "I understand why there’s so much focus on our trading relationship with the US but actually our trading relationship with Europe is arguably even more important because they are our nearest neighbours and trading partners."
3 months ago09:23Jonathan Walker
What could a trade deal involve?
The Chancellor has ruled out several concessions the US is thought to be looking for as the price of a deal.
These include reductions in food standards rules that limit imports of American agricultural goods and changes to online safety legislation that some US politicians believe limit freedom of speech.
A deal could, however, involve a reduction in tariffs on US cars in exchange for a cut in tariffs on British-made vehicles, with Ms Reeves declining to rule out such a move on Wednesday.
So far, the Chancellor has used her visit to the IMF to champion free trade, telling a panel event on Thursday evening she wanted to see both tariff and non-tariff barriers reduced.
3 months ago08:50Jonathan Walker
Chancellor insists a deal is possible
The Chancellor told the BBC she “understands what president Trump wants to address” when speaking about tariffs.
“We’re all grappling with this issue of tariffs but I think that there is an understanding why president Trump wants to address some of the global imbalances there are in the system,” she told the broadcaster.
Ms Reeves has said there is “a deal to be done” with Washington, despite suggestions from senior US officials that Mr Trump regards the 10% tariff as a “baseline” he is unlikely to go below.
3 months ago08:49Jonathan Walker
What Rachel Reeves is doing in Washington
Rachel Reeves will meet her US counterpart as she attempts to make progress on a trade deal during her visit to Washington.
The Chancellor is expected to discuss a potential UK-US trade deal when she sits down with Treasury secretary Scott Bessent after a series of talks with other finance ministers at the International Monetary Fund’s spring meetings earlier this week.
The Government hopes that a deal with the US will mitigate the impact of the tariffs imposed by President Donald Trump at the start of April that rocked financial markets and sparked fears of a global downturn.
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Car firms say a trade deal is urgently needed
Sir Keir Starmer was warned he has just weeks to save thousands of jobs in the car industry as manufacturers issued a plea for a Covid-style package of support. Donald Trump’s tariffs could lead to cuts in “weeks rather than months”, the manufacturers said.
They said a trade deal scrapping the fees was needed urgently but if it could not be achieved then the Government should consider a furlough scheme to stop skilled workers leaving the industry, and tax-breaks for struggling businesses.
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