Britain’s finance minister, Rachel Reeves, announced Wednesday that the UK will avoid a hasty reaction to looming U.S. tariffs. Instead, the government prioritises a post-Brexit trade agreement with the United States. This deal could shield the UK from, or soften, the impact of new tariffs expected from President Donald Trump.
Speaking to a parliamentary committee, Reeves emphasized the stakes. “A strong economic agreement with the U.S. is the goal,” she said. “We won’t take steps that risk that.” Her comments reflect a cautious strategy to protect the UK’s economic interests amid global trade tensions.
Reeves says that even if the UK secures exemptions to Trump's tariffs 'it doesn't mean that we are out of the woods'
The chancellor told MPs on the Treasury committee the UK economy will still be hit by global trade wars despite efforts to strike an economic deal with Trump pic.twitter.com/H1FmkMhuPN
— ITVPolitics (@ITVNewsPolitics) April 2, 2025Reeves revealed ongoing talks with the European Union and other nations to craft a smart response. She recently discussed the issue with EU trade commissioner Valdis Dombrovskis. “We want a clear-headed plan, not posturing,” she noted. This approach aims to bolster the UK’s faltering economy without sparking a tariff war.
The U.S. remains the UK’s top single-country trading partner. A misstep could prove costly. The Office for Budget Responsibility warns that up to 20% of U.S. tariffs could shrink UK GDP by 0.6% in the 2026-2027 fiscal year.
Read: Trump Announces 25% Tariffs on Foreign Cars and Auto Parts
UK media reports suggest London might ditch its digital tax on tech giants to facilitate a U.S. trade deal. This levy, which generates £800 million ($1 billion) yearly for the Treasury, has irked Washington. Scrapping it could ease tensions and avert Trump’s tariffs.
For now, Reeves is playing the long game. By keeping lines open with the U.S. and EU, she hopes to secure a deal that strengthens the UK’s economic footing. As talks progress, updates on these efforts are expected.
