Rachel Reeves will fly to Washington subsequent week to satisfy her American counterpart for the primary time, because the British authorities appears to be like to accentuate negotiations over a UK-US commerce deal.
The chancellor can be within the US from Tuesday to Friday for the spring conferences of the Worldwide Financial Fund. On the coronary heart of her go to, although, can be talks with the US treasury secretary, Scott Bessent, whom British officers regard as one among their probably allies in negotiating a deal.
With Donald Trump speaking about coming to the UK for a state go to in September, officers are more and more hopeful they’ll agree tariff reductions within the coming months and even weeks.
The US president and Keir Starmer spoke to one another by cellphone on Friday afternoon, with commerce high of the agenda. It was the primary time the 2 leaders had spoken since Trump made his tariff announcement.
Downing Road mentioned they mentioned “the ongoing and productive discussions between the UK and US on trade”. A spokesperson mentioned: “The prime minister reiterated his commitment to free and open trade and the importance of protecting the national interest.” One supply mentioned the decision lasted 35 minutes.
A senior authorities supply had mentioned earlier that Reeves would “make the argument for a trade relationship that is deeper and more open that the one on the table at the moment”.
The chancellor mentioned earlier this week that “active negotiations” have been ongoing. “Any deal that’s able to be secured will always have front and centre British national interest,” she mentioned.
Ministers have put a commerce deal on the high of their checklist of priorities for US-UK relations. The Workplace for Price range Duty has mentioned a full-blown international commerce conflict might wipe 1% off gross home product in 2026-27.
UK officers are pessimistic about their possibilities of persuading Trump to present them an exemption from his 10% international tariff, however they hope to have the ability to agree reductions to the 25% charges being promised on sure objects.
British officers have introduced a draft deal to their US counterparts that features reductions to tariffs on metal, aluminium and vehicles. Sources say it doesn’t cowl prescription drugs, nonetheless. Trump has mentioned he’ll announce tariffs for the sector “very shortly” that would value British drug corporations billions of kilos in income.
Prescription drugs are the UK’s second-biggest export to the US at about £7bn, after vehicles which account for about £8bn.
In return, the UK has supplied to scale back the headline price of its digital providers tax, which is at the moment paid by a small variety of US expertise corporations.
Sources mentioned the proposed settlement was comparatively slim in nature however {that a} broader commerce deal might be nonetheless be labored on afterwards. A extra wide-ranging commerce settlement would face political difficulties, nonetheless, equivalent to UK resistance to importing chlorinated hen and different meat, and the US want to promote items and providers to the NHS.
Trump and his key officers have given optimistic alerts in latest days concerning the probability of getting a deal signed quickly. Some reportssuggest US officers hope to have it accomplished in as quickly as three weeks’ time.
Trump’s press secretary, Karoline Leavitt, mentioned on Wednesday that the US could be asserting its first offers “very soon”, and the vice-president, JD Vance, mentioned on Thursday: “There’s a good chance that, yes, we’ll come to a great agreement that’s in the best interest of both countries.”
Trump mentioned on Thursday evening that he was anticipating to journey to the UK in September for a second state go to, calling the prospect “beautiful”.
One British official mentioned: “They have the outline agreement, we presented it to them before the tariff announcement. The ball is in their court. The only question is: do they want to do a deal or not?”
Reeves’ assembly with Bessent, who isn’t one of many tariff hardliners within the Trump administration, will cowl the commerce deal in addition to wider questions concerning the international financial system.
A authorities supply mentioned Reeves wouldn’t be negotiating instantly with Bessent however would current an argument “making clear our overarching view on free trade”, underlining the UK’s key priorities of metal, vehicles and prescription drugs.
Bessent has prioritised the UK together with nations equivalent to Japan, Australia, South Korea and India within the 90-day pause on larger tariffs, however ge advised Yahoo Finance this week that not all commerce offers have been more likely to be accomplished throughout the window.
Throughout her US journey, Reeves can even participate in a panel hosted by the IMF by which she’s going to argue for extra free and open commerce and reform of worldwide monetary establishments to take account of the brand new international financial realities.
The supply mentioned Reeves would say that nations and establishments should recognise that change has occurred, and that our bodies such because the IMF, the World Commerce Group and the World Financial institution must adapt.
The chancellor can even meet enterprise leaders as she hopes to drum up funding alternatives for the UK, pitching it as a secure haven in a tumultuous financial world. She may have discussions with finance leaders from Europe and India as Britain tries to enhance its buying and selling relationships with companions exterior the US.
