The News
The Trump administration has indicated that it is “keen” to cut a trade deal with the United Kingdom, Chancellor of the Exchequer Rachel Reeves said Wednesday at Semafor World Economy Summit.
Reeves said the two countries have “balanced trade,” adding, “What we hear from the US administration is that they are keen to do a deal with the UK reflecting the closeness of that relationship.”
The US imposed variable tariffs on the UK earlier this month — a flat rate of 10% on most goods, with a heightened 25% levy on critical sectors like steel and automobiles. The decision to punish the UK with tariffs roiled markets and shook government confidence in their countries’ “special relationship.”
“This Labour government very much believes in free trade,” Reeves said. “That’s why we do understand some of the concerns that the United States has; we are willing to reduce trade barriers in the UK.” She added that there could be “a bilateral process” between the US and UK to remove remaining trade barriers.
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The Labour government under UK Prime Minister Keir Starmer has been making a concerted push to become more business-friendly, curtailing its antitrust watchdogs and pushing to institute capital markets reforms to close a perceived valuation gap between US markets and the LSE.
Then came Trump’s tariffs. Britain was hardly the only ally roiled by levies, but given the longstanding economic and political cooperation between the two countries, the blow was particularly felt.
The Semafor View
The energy transition is changing, not ending. Renewable and fossil-fuel production are at record highs. Clean energy is cheaper than oil drilling, and Big Tech’s appetite for power is growing exponentially. Investments into new fuel sources and green tech are unlikely to wind down any time soon, while countries are increasingly concerned with energy independence.