The UK’s trade ties with the European Union are “arguably more important” than those with the United States, Chancellor Rachel Reeves has stated during an interview with the BBC.
Reeves indicated that strengthening economic relations with the EU is a higher priority, even as the government pursues discussions with the US on trade.
Following her meeting with US Treasury Secretary Scott Bessent on Friday, Reeves posted on X that both nations “want a deal that is in both our national interests.”
Earlier this week, she suggested the UK may look to reduce tariffs on US car imports from the current 10% to 2.5% as part of a broader agreement.
The UK is preparing for an upcoming summit with EU leaders in May, aimed at “resetting” bilateral relations.
“I understand the attention given to our trade relationship with the US, but our relationship with Europe is arguably of greater significance, given that they are our closest neighbours and trading partners,” Reeves told the BBC.
“While I’ve met with Scott Bessent in Washington this week, I’ve also convened with French, German, Spanish, Polish, Swedish, and Finnish finance ministers, because reestablishing strong trade ties with European partners is vital for British jobs and consumers,” she added.
A Downing Street spokesperson described the chancellor’s assessment as “factual, given the EU remains the UK’s largest trading partner.”
The same spokesperson also echoed prior remarks from Sir Keir Starmer, who previously argued it is a “false choice between the EU and the US.”
Reeves reiterated this week that the government is working “flat out” to secure a trade agreement with Washington.
She has expressed her ambition to promote “free and fair” trade and to deepen US-UK ties, particularly within the technology sector.
Conservative shadow business secretary Andrew Griffith told Sky News that his party would instead “absolutely prioritise” a US trade deal over the EU.
Griffith contended that, given the UK currently enjoys tariff-free trading of goods with the EU, the “logical next step to foster economic growth, after the chancellor’s previous missteps, would be to strike a deal with the US.”
Liberal Democrat Treasury spokesperson Daisy Cooper MP remarked, “The chancellor is correct that our European trade relationship is paramount, but thus far the government’s actions have failed to match those words.
“This government has gone out of its way to accommodate Donald Trump, but has taken little meaningful action to grow trade with Europe.”
Addressing the US stance, Reeves stated she understands President [Donald] Trump’s motives regarding tariffs as she prepared for discussions in Washington.
She noted there are parallels between current US and UK administrations, both propelled by public dissatisfaction over economic conditions.
“We’re all navigating the tariff issue, but there is recognition as to why President Trump wants to tackle certain global trade imbalances,” Reeves continued.
President Trump has already set a 25% tariff on all auto imports to the US, impacting British vehicles as well.
Britain also faces a general 10% tariff rate and is seeking to broker an agreement with the US administration, alongside several other countries contending with even steeper tariffs. Many of these levies are currently suspended until July.
Some US officials remain optimistic about a potential deal. Last week, US Vice-President JD Vance stated there was a “good chance” for a trade pact with the UK.
Reeves said she is also in close contact with European and Canadian partners to dismantle trade barriers, adding that G20 discussions this week were challenging.
“There are, of course, pressures. We are all closely monitoring developments in our respective bond and equity markets. Everyone recognises that uncertainty hampers investment in the UK,” she observed.
Watch Faisal’s full interview with Rachel Reeves here.
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