Unlock the Editor’s Digest at no cost
Roula Khalaf, Editor of the FT, selects her favorite tales on this weekly e-newsletter.
UK chancellor Rachel Reeves has rejected key planks of Donald Trump’s financial agenda forward of talks with Scott Bessent, her US counterpart, saying she is “proud that the UK has its international, open popularity”.
Reeves, who will focus on a potential UK-US commerce take care of Treasury secretary Bessent on Friday, stated on the IMF’s spring assembly that she needed to “strengthen” Britain’s place as an open financial system.
In a speech on Thursday, Reeves stated the world needed to adapt to a “new period of world commerce” and accepted the US president’s willpower to handle what she known as “extreme international commerce imbalances”.
However she stated international stability relied on decrease commerce boundaries and respect for international establishments, neither of which have been hallmarks of Trump’s presidency up to now.
“We’re in a brand new period of world commerce,” Reeves stated. “In that new period we want a system that gives safety for working folks, stability for companies and prosperity for nationwide economies.”
“To ship this, we have to do three issues: sort out extreme international commerce imbalances, scale back boundaries to commerce and promote robust multilateral establishments.”
Her feedback got here forward of her deliberate assembly with Bessent, the place she is going to press the case for an early UK-US commerce deal to chop Trump’s high tariffs on British exports — together with 25 per cent levies on automobiles and metal.
Reeves on Wednesday whereas in Washington stated Britain would look to scale back tariffs on imports from the US as a part of a deal, and didn’t reject a suggestion that the nation may reduce its 10 per cent levy on American-made automobiles to 2.5 per cent.
Greg Fingers, former Conservative commerce minister, stated he intentionally retained the ten per cent levy on US automobiles after Brexit as a bargaining chip in any future commerce negotiation in Washington.
Reeves’ feedback put a brand new deal with the tariffs Britain imposed on US items, a lot of them carried over from the pre-Brexit period when the UK was a part of the EU customs union.
Whereas the UK lowered some tariffs after it left the EU, many stay excessive on industries the place the US has a significant exporting curiosity, together with agricultural produce — reminiscent of meat, dairy and seafood — in addition to textiles, chemical substances and the energetic substances in pharmaceutical merchandise.
For instance, British levies on high-quality frozen beef from the US are set at 12 per cent, and distinction with how Irish meat exporters can ship merchandise to Britain tariff-free beneath the EU-UK commerce deal.
In its newest annual report into international commerce boundaries, the US Commerce Consultant singled out some “excessive tariffs” on American exports to the UK, together with 25 per cent for some fish and seafood merchandise, 10 per cent for automobiles and vehicles, and as much as 6.5 per cent for sure mineral or chemical fertilisers.
Former UK commerce division official Allie Renison, now at consultancy SEC Newgate, stated eradicating or decreasing a few of these tariffs would have a “notable affect” for some US exporters, partly relying on availability of quotas and the way shortly any levy adjustments got here into impact.
Nonetheless, she added many UK non-tariff and regulatory preparations — from meals security requirements that outlaw hormone-treated beef to so-called geographical indications that shield towards international rivals to home merchandise reminiscent of cheddar cheese or Scotch whisky — would make it tough for US industries to take full benefit of the British market.
Renison added UK plans to totally align with EU meals requirements as a part of a veterinary settlement envisaged in a post-Brexit reset of relations between the 2 sides would additionally restrict entry for some US exporters, though Britain may nonetheless admit American merchandise beneath lowered tariffs that met these necessities.
The UK has stated it is not going to decrease meals and agricultural requirements to accommodate calls for made by the US, which has lengthy argued Britain ought to transfer away from EU requirements that it has claimed are “unscientific” and protectionist.
Within the annual report, the US Commerce Consultant stated American agricultural exporters “are more and more involved” the UK will retain the EU’s strategy to regulating agricultural chemical substances and pesticides, which it stated created restrictions that “don’t seem like science-based”.
