UK Chancellor Rachel Reeves has emphasized that the country’s trade relationship with the European Union may outweigh its economic ties with the United States, despite current negotiations focused on securing a UK-US trade deal.
In an interview with the BBC, Reeves stated, “Our trading relationship with Europe is arguably even more important, because they’re our nearest neighbours and trading partners.” Her comments come ahead of a key meeting with US Treasury Secretary Scott Bessent in Washington.
While Reeves acknowledged the strategic significance of the US, she said the UK government is working “flat out” to strike a beneficial agreement, including the potential to cut tariffs on US car imports from 10% to 2.5%. The move is part of a broader attempt to deepen transatlantic trade ties.
However, Reeves is also leading efforts to “reset” relations with the EU, with a major summit scheduled for May. During her visit to Washington, she held meetings not just with US officials but also with finance ministers from France, Germany, Spain, Poland, Sweden, and Finland, underscoring the UK’s broader efforts to rebuild post-Brexit trade alliances.
A Downing Street spokesperson backed the Chancellor’s comments, noting: “The EU is our largest trading partner — this is a statement of fact.” Prime Minister Keir Starmer has previously described the notion of choosing between the EU and the US as a “false choice.”
The Chancellor also addressed the impact of US-imposed tariffs under President Donald Trump, who has maintained a 25% tariff on all car imports, including from the UK. Reeves expressed an understanding of Trump’s approach, stating, “There is an understanding of why President Trump wants to address global imbalances.”
Despite tensions, there’s optimism around the possibility of a new deal. US Vice President JD Vance recently expressed confidence, saying there’s a “good chance” of an agreement.
Reeves also revealed ongoing talks with Canadian and European counterparts to dismantle lingering trade barriers and called for coordinated responses to global economic uncertainty. She noted that volatility in financial markets, particularly bonds and equities, could threaten investment in the UK.
“We are all facing the same challenges — and uncertainty is the enemy of growth,” Reeves said.
As discussions continue in Washington and Europe, the UK government faces the delicate task of balancing its transatlantic ambitions with the necessity of strong, stable trade links across the Channel.