Rachel Reeves, the shadow Chancellor of the Exchequer, dropped a very big announcement. She subsequently announced that the UK is prepared to lower tariffs on US car imports from 10% to 2.5% if included in a wider trade deal. This announcement comes at a time of unprecedented debate around the future of UK-US trade relations. Reeves is looking forward to continuing discussions with her US counterpart in Washington this Friday.
A tough negotiator and trade trial lawyer, Reeves emerged from G20 meetings earlier this week with new commitments from global counterparts to work down import tariffs. She pointed out the commonalities faced by both US and UK governance. Both were elected in large part on voter frustration with the current economic conditions. This context deepens the recent negotiations and enriches the need to tackle trade-related issues that affect people in both countries.
Reeves has been busily negotiating with her European and Canadian counterparts to break down the above trade barriers. She emphasized her desire to cultivate new and improved trading relationships that would grow the UK economy.
In her remarks, Reeves acknowledged the complexity of tariff discussions, stating, “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.”
Reeves is very much in control of these important conversations. She highlighted that the lack of clarity on tariffs makes investment in the UK economy difficult. She stated, “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.”
Reeves proved to be on top of the concerns expressed by then-President Donald Trump about global trade deficits. She remarked, “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.”
Even with whispers of a limited deal that would ease some of the trade-related tensions, Reeves warned not to celebrate too soon. She did not discount the serious impact that these trade conversations still have on many other countries, indicating a need to proceed with care in the future.