Chancellor Rachel Reeves has stated that the United Kingdom’s trade ties with the European Union may outweigh those with the United States in terms of importance. Speaking to the BBC, she highlighted the significance of repairing and strengthening links with Britain’s closest trading partners.
Despite ongoing negotiations with the US, Reeves stressed that re-engaging with Europe remains a top priority for the government. This comes ahead of a high-profile EU summit set for May, which aims to “reset” the UK-EU relationship.
“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’re our nearest neighbours and trading partners,” she told the BBC.
During a visit to Washington, Reeves met US Treasury Secretary Scott Bessent, but she made clear that her diplomatic outreach extended far beyond the States.
“Obviously I’ve been meeting Scott Bessent this week whilst I’m in Washington, but I’ve also this week met the French, the German, the Spanish, the Polish, the Swedish, the Finnish finance ministers – because it is so important that we rebuild those trading relationships with our nearest neighbours in Europe, and we’re going to do that in a way that is good for British jobs and British consumers.”
Her comments come as the UK hints at lowering tariffs on US car imports — from 10% down to 2.5% — as part of a broader transatlantic trade agreement.
Ahead of a potential return to office by Donald Trump, Reeves acknowledged the complexities of dealing with US tariffs. The former president has previously imposed a sweeping 25% tariff on all car imports to the US, including those from the UK.
“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,” Reeves said.
Trump’s trade policies remain a sticking point for UK negotiators. The UK still faces a 10% general tariff and is working to strike a deal before July, when many of these measures may return in full force.
U.S. Vice President JD Vance recently remarked that there’s a “good chance” of sealing a deal with the UK, offering a sliver of optimism. However, Reeves has not placed all her bets on one partner. She’s also in talks with Canada and EU countries to break down existing trade barriers.
At the G20 meetings this week, Reeves described the tone as tough but necessary. “Obviously, there are strains. We are all following what’s happening in our domestic bond markets, in our equity markets, and we all know that that uncertainty is bad for investment in the UK economy.”
Rachel Reeves’ latest comments mark a clear pivot towards Europe as the UK’s trade agenda evolves. While talks with the US continue, it’s evident that the chancellor is steering efforts toward rekindling stronger ties with the EU partners who are geographically and economically closer to home.
With a critical EU summit on the horizon and complex US negotiations in the backdrop, the coming months could shape the UK’s post-Brexit trade landscape for years to come.
