US Vice President JD Vance has said America is “working very hard” with the UK on negotiating a “great” trade deal as Donald Trump’s tariffs continue to shake the global financial order.
The US President announced sweeping tariffs on imports to the United States on April 2 - which he dubbed “Liberation Day” - rocking the world economy, sending stock prices tumbling and sparking fears of a global recession.
Since then, Trump has rowed back on tariffs, reducing the rate paid on imports from most countries to 10% and, on Saturday, exempting electronics such as smartphones and laptops from the levy – including the 145% charge on imports from China.
The Government has been hopeful of a deal to exempt the UK from Trump’s tariffs, and in an interview with the website UnHerd on Tuesday, Mr Vance said he was optimistic that both sides could come to a mutually beneficial agreement.
“We’re certainly working very hard with Keir Starmer’s government” on a trade deal, Mr Vance said.
“The President really loves the United Kingdom. He loved the Queen. He admires and loves the King. It is a very important relationship. And he’s a businessman and has a number of important business relationships in [Britain]. But I think it’s much deeper than that.
“There’s a real cultural affinity. And, of course, fundamentally, America is an Anglo country.
“I think there’s a good chance that, yes, we’ll come to a great agreement that’s in the best interest of both countries.”
Mr Vance said the “reciprocal relationship” between the US and UK gave Britain a more advantageous position than other European countries when it comes to negotiating new trade arrangements, adding: “While we love the Germans, they are heavily dependent on exporting to the United States but are pretty tough on a lot of American businesses that would like to export into Germany.”
Chancellor Rachel Reeves will aim to continue negotiations for an economic deal with the US later this month when she travels to Washington to attend the International Monetary Fund’s spring meetings with other finance ministers.
Meanwhile, Trump on Monday suggested that he might temporarily exempt the car industry from tariffs he previously imposed on the sector, to give manufacturers time to adjust their supply chains.
“I'm looking at something to help some of the car companies with it,” Trump told reporters gathered in the Oval Office.
The US President said automakers needed time to relocate production from Canada, Mexico and other places. “And they need a little bit of time because they're going to make them here, but they need a little bit of time. So I'm talking about things like that,” he said.
Trump's statement hinted at yet another round of reversals on tariffs after his onslaught of import taxes has panicked financial markets and raised deep concerns from Wall Street economists about a possible recession.
Last week, after a bond market sell-off pushed up interest rates on US debt, Trump announced that for 90 days his broader tariffs against dozens of countries would instead be set at a baseline 10% to give time for negotiations.
At the same time, Trump increased the import taxes on China to 145%, only to temporarily exempt electronics from some of those tariffs by having those goods charged at a 20% rate.
“I don't change my mind, but I'm flexible,” Trump said.
