Reeves: There's a deal to be done with Trump that may see tariffs cut (2025)

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Rachel Reeves insisted last night there is a ‘deal to be done’ with Donald Trump that may help tariffs on US goods to be slashed – but she dashed hopes of an agreement soon.

The Chancellor told a summit the White House is ‘keen’ to thrash out a trade arrangement between the two countries.

But she insisted Britain will not rush into any accord that is not in ‘our national interest’.

Ms Reeves has, in the past, raised expectations she may be able to deliver a much sought-after trade pact with America when she meets today with US Treasury Secretary Scott Bessent.

Speaking at the UK Embassy, with British Ambassador Peter Mandelson looking on, Ms Reeves was adamant that, as keen as she is to secure the removal of the American 10 per cent general tariff and 25 per cent on cars and steel, she is not prepared to sacrifice our high food standards or change regulations to make it easier for the US to export vehicles to us.

The Chancellor said: ‘We’re not going to rush a deal. We want to get the right deal that’s in our national interest.

‘Those talks are ongoing but it’s clear that the US as well wants a deal, and so those discussions continue. I’ve always been really clear that I believe in free trade.’

The issue of imports into the UK of hormone-enhanced beef and chlorinated chicken has long been seen as a barrier to wide-ranging free trade with America.

Ms Reeves insisted: ‘We have talked regularly with the farming sector on these issues.

‘This never has been on the table in these discussions with the US – and the food and farming sector in the UK can be confident that we’re not going to be reducing our standards.’

She was confident that there is enough common ground for an agreement to eventually emerge, saying: ‘I think that there is a deal to be done, both on tariffs and also a wider deal beyond the media issue of tariffs, around technology, a technology partnership building on the National Security and Defence Partnership.

‘We’re not going to be relaxing our food standards. The US like that and they respect that and understand that. So that is not something that’s on the table in these discussions.’ Appearing later at the World Economy Summit in Washington DC, Ms Reeves suggested that she would look to go beyond an arrangement on tariffs, including a ‘technology partnership’ and ‘building on the close relationship we have on security and national defence’.

She said: ‘This isn’t just about damage limitation, it’s also about what the next step is.’ Adding that she would like to see a reduction in tariffs and non-tariff barriers on both sides of the Atlantic, Ms Reeves said: ‘I think that can be a bilateral process between our two countries to remove those remaining trade barriers that do exist.

‘And if we work on that basis, there is a deal to be done that will benefit industry both in the UK and the US and jobs in our countries as well.’

She also hinted that Labour is ready to slash tariffs on American cars to help seal a pact – with ministers reportedly considering cutting import tariffs on US cars from 10 per cent to 2.5 per cent.

Asked about the proposal, Ms Reeves told the BBC: ‘I want to see tariff and non-tariff barriers reduced between the UK and the US but also with other countries around the world.’

Downing Street also left open the door to cutting the UK’s tariffs on American goods to help get a deal that will see a reduction in the 25 per cent tariff on British cars imposed by the US President. The urgency of removing tariffs on imported cars has been underlined by the problems of Tata-owned Jaguar Land Rover, which has temporarily halted exports to the US.

Ms Reeves said: ‘The Prime Minister and I went to Land Rover [in the West Midlands] a few weeks ago to meet with workers and the management team. There were no illusions about the scale of the challenges that tariffs pose to UK car manufacturers.’

Meanwhile, the US raised hopes last night that its trade war with China, which has spooked global markets, could be resolved.

Speaking to bankers in Washington, Mr Bessent said that ‘there is an opportunity for a big deal here’ on trade issues between America and China.

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