Sir Keir Starmer has slapped down Rachel Reeves after she suggested that the government is prioritising trade relations with the EU ahead of the US.
The remarks to the BBC by the chancellor came ahead of a delicate meeting in Washington DC with her US counterpart, Treasury secretary Scott Bessent, as the UK government attempts to get a trade deal over the line.
The prime minister has been insisting for months that a choice between the US and the EU is “a false choice” as he tries to reset the Brexit deal at the same time as strengthening his relationship with Donald Trump.
But in her interview on Friday, Ms Reeves apparently revealed the government’s real priorities when she said that the EU was our closest trading partner.
She told the BBC: “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.
“Obviously, I’ve been meeting Scott Bessent this week whilst I’m in Washington, but I’ve also this week met the French, the German, the Spanish, the Polish, the Swedish, the Finnish finance ministers – because it is so important that we rebuild those trading relationships with our nearest neighbours in Europe, and we’re going to do that in a way that is good for British jobs and British consumers.”
The UK is due to host a summit with the EU on 19 May as part of the ongoing attempt to “reset” the relationship after Brexit.
But Sir Keir quickly responded to undo any damage, describing the US as “incredibly important” to the UK, in the wake of Ms Reeves’s comments.
The PM’s official spokesperson added: “Both are incredibly important to us” as he rejected the idea that the UK had to choose between them, despite calls from Mr Trump’s allies to do just that.
The two top people in the government being at odds over the delicate trade talks comes as ministers also seem unable to agree on whether to accept a youth mobility scheme with the EU.
Ms Reeves is hoping to secure a trade deal with the US that will mitigate the impact of the tariffs imposed by President Trump at the start of April, which have rocked the global financial markets.
It has seen the UK hit with 10 per cent tariffs on all exports to the US, as well as a 25 per cent levy on cars, steel and aluminium.
Some US officials have been optimistic about the prospects of an agreement, with vice-president JD Vance saying there was a “good chance” one could be struck with the UK.
The chancellor has said there is a “deal to be done” with Washington, but has ruled out several concessions the US is thought to be looking for.
These include reductions in food standards rules that limit imports of American agricultural goods and changes to online safety legislation that some US politicians believe limit freedom of speech.
A deal could, however, involve a reduction in tariffs on US cars in exchange for a cut in tariffs on British-made vehicles, with Ms Reeves declining to rule out such a move on Wednesday.
She also said she had been working closely with her European and Canadian counterparts to remove trade barriers, and added that conversations at G20 meetings had been difficult.
“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.”
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