Donald Trump’s unfolding trade war makes it even more “imperative” for the UK to improve its post-Brexit trading relations with the European Union, Rachel Reeves has said.
The government has ruled out rejoining the EU customs union, but the chancellor has insisted the UK wants to improve its trade relationship with “partners in Europe”, given the difficulties British firms have found in exporting their products around Europe.
Reeves is seeking to push Keir Starmer to take an ambitious approach to removing trade barriers with the union.
In an interview with the Financial Times, she said the UK-EU summit on 19 May would be a chance “to refresh our relationship and make it easier for businesses to trade”.
“I feel that in the current environment, there is a greater willingness from countries around the world to look at both tariff and non-tariff barriers that are holding back trade,” Reeves said.
“Many of the developments, whether it is Russia’s invasion of Ukraine or the challenges in global trade at the moment, mean that there’s an even greater imperative to improve our trading relationships with Europe.”
Reeves said the UK could present itself as a “place of stability” to invest, in the midst of the deepening trade war Trump is refusing to back down from.
The government also confirmed it had secured a deal to build the first Universal theme park in Europe, which the prime minister said would bring “growth, jobs and of course joy to Britain”.
Reeves said Comcast’s decision to build the theme park in Bedfordshire showed the “strengths of our economy” and was a sign of “the enduring relationship between the UK and the United States of America”.
The chancellor has called for Britain to align its regulations with rules in Brussels, on established industries including chemicals, to improve market access.
After the fresh wave of tariffs, the chancellor sought to ease fears about market volatility. She told MPs she had spoken to Andrew Bailey, the Bank of England governor who said “markets are functioning effectively and that our banking system is resilient”.
Reeves said she would seek to negotiate a US trade deal when she headed to Washington later this month for the IMF meeting of global finance ministers.
When asked if she would have to make future tax rises or spending cuts, Reeves added: “Economic stability, fiscal stability is the key underpinning for a strong and growing economy, and thats why we are, as a government, so committed to those fiscal rules.”
