UK ‘resolved to get best deal’ with US despite American doubts about carve out

The UK is “resolved” to do everything it can to secure the “best deal possible” with the US, Rachel Reeves has said, after a senior Trump adviser poured cold water on the idea of tariff concessions.

The Chancellor insisted she was also aware of the need for the UK to strike better trade arrangements with other partners across the world, as she travels to Poland to meet European financial ministers.

Kevin Hassett, a senior economic adviser to US President Donald Trump, suggested the blanket 10% tariff rate most countries now face was likely to be a “baseline”, and anything below this would be “extraordinary”.

When the UK was originally faced with the 10% rate on Mr Trump’s so-called “liberation day”, it was seen as favourable compared to others like the EU, which faced a 20% tariff.

A snap announcement of a 90-day pause on reciprocal tariffs means traders importing to America from across the world now face the 10% rate – apart from China, which has been singled out for massive, prohibitive levies.

In the latest development of an emerging trade war, Beijing hiked tariffs on American goods to 125% on Friday to match those imposed by Washington.

As they seek a trade deal to soften the blow of tariffs, ministers are also hoping to strengthen trade relations with other countries to negate their impact.

Asked if she was losing confidence in the prospect of a US trade deal and pivoting to other partners instead, the Chancellor insisted the UK remained in negotiations with the Americans.

Speaking at Downing Street, she told reporters: “We continue to engage with our counterparts in the United States, and of course we want to secure the best deal possible for British jobs and British industry. And we are absolutely … resolved to do everything we can.

“But, at the same time, we also want to improve trading relations with other countries around the world.

“It’s why I hosted the Indian finance minister in London this week as part of our economic and financial dialogue, and to try and secure a free trade and investment treaty with India.

“It’s also why we are having a summit with the European Union in May to improve our trading relations.

“I’ll be travelling to Poland later today to meet with my finance minister counterparts from across Europe.”

Trump adviser Mr Hassett had earlier told CNBC: “I think everybody expects that the 10% baseline tariff is going to be the baseline.

“It is going to take some kind of extraordinary deal for the President to go below there.”

He said the White House was in negotiations with around 20 countries and that two deals were almost closed.

UK and US negotiators are “talking all the time”, every day, Sir Keir Starmer said on Thursday.

The Prime Minister held calls with the First Ministers of the devolved nations and regional mayors on Friday to “update” them on the UK’s position, Downing Street said.

The Government will continue with its “calm, pragmatic and cool-headed” approach and “partnership at all levels will be required to deliver for working people”, a Number 10 spokesperson said.

The president’s surprise announcement of the 90-day pause to hefty tariffs imposed on some countries brought respite to battered stock markets across the globe, including London’s FTSE 100.

UK stock markets opened higher on Friday after the FTSE 100 index jumped about 3% on Thursday, while Europe’s main indexes were also climbing after traders warmly welcomed Mr Trump’s tariff pause.

But analysts said the gains were likely to reflect a short-lived relief rally, with concerns over US policy remaining and the prospect of all-out trade war between the US and China intensifying.

Meanwhile, investors flocked to so-called “safe haven” assets with currencies like the Swiss franc seeing a boost, while gold prices reached new highs.

Elsewhere, Sarah Breeden, a deputy governor of the Bank of England, told The Guardian that UK growth would be hit by “the most significant change in trade policy in a century”.

Imports of cars, steel and aluminium to America are all still subject to a 25% tariff.

The Liberal Democrats called on the Prime Minister to host a summit of world leaders to deal with the impact of the US tariffs.

The party leader, Sir Ed Davey, compared it with the British-led summit held to build support for Ukraine in the wake of Volodymyr Zelensky’s tumultuous appearance in the White House earlier this year.

Sir Ed said: “The Prime Minister should show the White House that we have alternatives by hosting a summit of world leaders and building an economic coalition of the willing.”

He added: “We need to show a united front and put pressure on the US to not just make this 90-day pause permanent, but remove their remaining tariffs on British businesses and our car industry completely.

“The best way to end this trade war for good is by standing tall with our allies, not cowering in the corner.”

Elsewhere, Reform UK leader Nigel Farage – who has often compared his party’s fortunes to Donald Trump’s – distanced himself from the US president’s tariff climbdown.

Mr Farage told LBC: “I think Trump did too much too soon, rather like Liz Truss did a couple of years ago.

“I’ve never in my life before seen stock markets fall quickly and bond markets fall at the same time.”