The chancellor has told the BBC that the UK’s trading relationship with the EU is perhaps “more important” than its one with the US.

Rachel Reeves said that becoming closer to the EU on trade was a higher priority, notwithstanding her current focus on talks with the United States.


Following her meeting with US Treasury Secretary Scott Bessent on Friday, Reeves stated that both the UK and the US desire a solution that is “in both our national interests”.

Earlier this week, she hinted that the UK could reduce tariffs on US auto imports from 10% to 2.5% as part of a larger agreement.

The United Kingdom is planning for a summit with the EU in May in an attempt to “reset” their relationship.

Because they are our closest neighbors and trading partners, she told the BBC, “I understand why there is so much focus on our commercial connection with the US, but actually our trading relationship with Europe is maybe much more vital.”

“I have been meeting with Scott Bessent this week while I am in Washington, of course, but I have also met with the finance ministers of France, Germany, Spain, Poland, Sweden, and Finland because it is crucial that we reestablish our trading relationships with our closest European neighbors, and we are going to do that in a way that benefits British jobs and British consumers.”

The chancellor’s comments were described as “a statement of fact that the EU is our largest trading partner” by a Downing Street spokesperson.

Sir Keir Starmer’s earlier remarks that it was a “false choice between the EU and the US” were also emphasised by the spokesperson.

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The administration is working “flat out” to get a trade agreement with the United States, Reeves stated this week.

She has stated her desire for “free and fair” commerce and the strengthening of ties between the United States and the United Kingdom in fields like technology.

The Conservatives will “absolutely be seeking to prioritise” a deal with the US over the EU, Conservative shadow business secretary Andrew Griffith said Sky News.

According to Griffith, the “next best choice if you want to grow the economy after the chancellor’s crashed would be to get a deal with the US” because the UK already had a tariff-free accord on products with the EU.

Daisy Cooper MP, a Liberal Democrat Treasury spokesman, said: “The chancellor is perfectly correct that our commercial relationship with Europe is more vital, but the government’s approach so far demonstrates that these are little more than hollow words.

“This government has bent over backwards to appease Donald Trump but barely lifted a finger to unleash growth by boosting trade with Europe.”

‘We’re all grappling with tariffs’

Regarding the issue with the US, Reeves stated that she “understands what President [Donald] Trump wants to address” with his tariffs, ahead of meetings with her US colleague in Washington.

Reeves drew parallels between how the US and UK governments rose to power as a result of public dissatisfaction with the economy.

“We’re all dealing with this issue of tariffs, but I believe there is an understanding why President Trump wants to tackle some of the global imbalances there are in the system,” she told reporters.

Trump has already placed a 25% duty on all car imports to the US, including those from the United Kingdom.

The UK also faces a 10% tariff rate and is attempting to reach an arrangement with the US government, along with dozens of other countries burdened with even higher taxes – the majority of which are presently on hold until July.

Some US officials have expressed optimism about the possibility of a settlement. Last week, US Vice President JD Vance indicated there was a “good chance” a trade agreement could be negotiated with the UK.

Reeves also stated that she has been working closely with her European and Canadian counterparts to reduce trade barriers, and that discussions around the table at G20 talks this week have been difficult.

“Clearly, there are strains. We are all monitoring what is going on in our local bond and equity markets, and we are all aware that uncertainty is bad for investment in the UK economy.”

You can watch Faisal’s full interview with Rachel Reeves here.