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UK chancellor Rachel Reeves has rejected key planks of Donald Trump’s economic agenda ahead of talks with Scott Bessent, her US counterpart, saying she is “proud that the UK has its global, open reputation”.
Reeves, who will discuss a possible UK-US trade deal with Treasury secretary Bessent on Friday, said at the IMF’s spring meeting that she wanted to “strengthen” Britain’s position as an open economy.
In a speech on Thursday, Reeves said the world had to adapt to a “new era of global trade” and accepted the US president’s determination to address what she called “excessive global trade imbalances”.
But she said global stability depended on lower trade barriers and respect for global institutions, neither of which have been hallmarks of Trump’s presidency to date.
“We are in a new era of global trade,” Reeves said. “In that new era we need a system that provides security for working people, stability for businesses and prosperity for national economies.”
“To deliver this, we need to do three things: tackle excessive global trade imbalances, reduce barriers to trade and promote strong multilateral institutions.”
Her comments came ahead of her planned meeting with Bessent, where she will press the case for an early UK-US trade deal to cut Trump’s high tariffs on British exports — including 25 per cent levies on cars and steel.
Reeves on Wednesday while in Washington said Britain would look to reduce tariffs on imports from the US as part of a deal, and did not reject a suggestion that the country might cut its 10 per cent levy on American-made cars to 2.5 per cent.
Greg Hands, former Conservative trade minister, said he deliberately retained the 10 per cent levy on US cars after Brexit as a bargaining chip in any future trade negotiation in Washington.
Reeves’ comments put a new focus on the tariffs Britain imposed on US goods, many of them carried over from the pre-Brexit era when the UK was part of the EU customs union.
While the UK reduced some tariffs after it left the EU, many remain high on industries where the US has a vital exporting interest, including agricultural produce — such as meat, dairy and seafood — as well as textiles, chemicals and the active ingredients in pharmaceutical products.
For example, British levies on high-quality frozen beef from the US are set at 12 per cent, and contrast with how Irish meat exporters can send products to Britain tariff-free under the EU-UK trade deal.
In its latest annual report into foreign trade barriers, the US Trade Representative singled out some “high tariffs” on American exports to the UK, including 25 per cent for some fish and seafood products, 10 per cent for cars and trucks, and up to 6.5 per cent for certain mineral or chemical fertilisers.
Former UK trade department official Allie Renison, now at consultancy SEC Newgate, said removing or reducing some of these tariffs would have a “notable impact” for some US exporters, partly depending on availability of quotas and how quickly any levy changes came into effect.
However, she added many UK non-tariff and regulatory arrangements — from food safety standards that outlaw hormone-treated beef to so-called geographical indications that protect against foreign rivals to domestic products such as Cheddar cheese or Scotch whisky — would make it difficult for US industries to take full advantage of the British market.
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Renison added UK plans to fully align with EU food standards as part of a veterinary agreement envisaged in a post-Brexit reset of relations between the two sides would also limit access for some US exporters, although Britain could still admit American products under reduced tariffs that met those requirements.
The UK has said it will not lower food and agricultural standards to accommodate demands made by the US, which has long argued Britain should move away from EU standards that it has claimed are “unscientific” and protectionist.
In the annual report, the US Trade Representative said American agricultural exporters “are increasingly concerned” the UK will retain the EU’s approach to regulating agricultural chemicals and pesticides, which it said created restrictions that “do not appear to be science-based”.
