Rachel Reeves breaks silence after Donald Trump slaps 25% tariff on UK cars

Chancellor Rachel Reeves has said the UK is in “extensive talks” with the US to try to protect British businesses from tariffs, and hopes for progress “in the next few days”. It comes after US President Donald Trump announced a 25% tariff on vehicles imported to the US, including those from the UK, will come into effect on April 2 - which Mr Trump is calling “liberation day”. The US is the UK’s largest export market for cars, and we sell vehicles worth £6.4 billion to the US each year. Top-of-the-range British-made cars such as Jaguars have enjoyed particular success in the US in recent years.

Ms Reeves told Times Radio: “The Prime Minister went to Washington just a couple of weeks ago and met the US president. And we are now having extensive talks with our counterparts in the US to protect trade between our countries. And those conversations continue. And obviously, the announcements of tariffs is something that the US plan to bring in next week. But we are in discussions about what that means for the UK.”

She added: “A million British people work for American firms. A million Americans work for British firms. Our two economies are so closely intertwined. I believe, and we make this case to the United States, that free trade, fair trade is good for both of our countries. But let’s see where we get to in the next few days.”

While some other countries have decided to impose their own tariffs on the US in return, Ms Reeves indicated the UK would not do the same.

Ms Reeves told Sky News: “We’re not at the moment at a position where we want to do anything to escalate these trade wars.

“Trade wars are no good for anyone. It will end up with higher prices for consumers, pushing up inflation after we’ve worked so hard to get a grip of inflation, and at the same time will make it harder for British companies to export.”

She went on: “We are looking to secure a better trading relationship with the United States. I recognise that the week ahead is important. There are further talks going on today, so let’s see where we get to in the next few days.”

In an interview with Times Radio, the Chancellor said free trade is “good for both of our countries”.

She added: “A million British people work for American firms. A million Americans work for British firms. Our two economies are so closely intertwined.”

Mike Hawes, Chief Executive of the Society of Motor Manufacturers and Traders which represents the automotive sector, said Donald Trump’s tariff announcement “is not surprising but, nevertheless, disappointing if, as seems likely, additional tariffs are to apply to UK made cars.

“The UK and US auto industries have a long-standing and productive relationship, with US consumers enjoying vehicles built in Britain by some iconic brands, while thousands of UK motorists buy cars made in America.

“Rather than imposing additional tariffs, we should explore ways in which opportunities for both British and American manufacturers can be created as part of a mutually beneficial relationship, benefitting consumers and creating jobs and growth across the Atlantic.

“The industry urges both sides to come together immediately and strike a deal that works for all.”