Reeves: Trade Ties with EU Take Priority Over US Deal

Chancellor Rachel Reeves has emphasised that the United Kingdom’s trading relationship with the European Union may be more significant than its ties with the United States.

Speaking to the BBC during her visit to Washington, Reeves said that while discussions with the US remain important, strengthening economic connections with Europe is a bigger priority. “Our trading relationship with Europe is arguably even more important because they are our nearest neighbours and partners,” she said.

The chancellor met with US Treasury Secretary Scott Bessent on Friday and later posted on social media that both countries were committed to reaching a deal that serves their national interests. In parallel, Reeves engaged in talks with finance ministers from France, Germany, Spain, Poland, Sweden, and Finland, underscoring her focus on rebuilding economic ties with Europe ahead of a planned UK-EU summit in May.

Downing Street backed Reeves’ comments, with a spokesperson describing them as a “statement of fact,” highlighting that the EU remains the UK’s largest trading partner. They also noted Labour leader Sir Keir Starmer’s previous remarks that the UK does not have to choose between deepening ties with the EU or the US.

While Reeves said the government was working “flat out” to secure a trade agreement with the US – and signalled potential tariff cuts on American car imports – she stressed the importance of creating “free and fair” trade relationships and enhancing cooperation in technology sectors.

The Conservatives, however, expressed a different view. Shadow Business Secretary Andrew Griffith told Sky News that his party would prioritise a US trade deal, arguing that the UK already enjoys tariff-free access to EU goods and should now focus on economic opportunities across the Atlantic.

Meanwhile, Liberal Democrat Treasury spokesperson Daisy Cooper supported Reeves’ emphasis on Europe but criticised the government for failing to take meaningful steps to boost trade with the continent, accusing it instead of catering to former US President Donald Trump.

On the broader topic of tariffs, Reeves acknowledged ongoing challenges. She noted that both the US and UK governments face public pressure to address economic grievances and that tariff negotiations have been a difficult but necessary part of talks. Currently, UK car exports to the US are subject to a 25% tariff, and broader negotiations are underway to seek relief before an expected tariff hike in July.

US officials, including Vice President JD Vance, have voiced optimism about a potential agreement, with Vance recently saying there was a “good chance” a deal could be reached.

Reeves also highlighted the tense atmosphere at recent G20 meetings, pointing to strains across global markets and the negative impact economic uncertainty could have on investment in the UK.