British Treasury Secretary Rachel Reeves listens during the 11th China-UK Economic and Financial Dialogue on January 11, 2025 in Beijing, China.
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The UK is “not part of the problem” when it comes to the “persistent” trade deficit that President Donald Trump wants to address, Britain's finance minister told CNBC on Wednesday.
British Chancellor Rachel Reeves told CNBC's Andrew Ross Sorkin: “I understand that President (Donald) Trump is concerned about countries that have large and persistent trade surpluses with the United States, and that is not the case for the United Kingdom.”
“We are not part of the problem here. “We, in the UK, increased trade with President Trump the last time he was in office,” she said, speaking to CNBC on the sidelines of the World Economic Forum in Davos, Switzerland.
President Trump is very angry about the US trade deficit with many of its partners, But trade with the UK was generally more balancedIt has oscillated between surplus and deficit in recent years.
Latest UK trade data It shows that in the second quarter of 2024, the UK ran a trade surplus of £4.5 billion ($5.5 billion) with the US in goods.
The British Finance Minister is in Davos this week, in an attempt to attract global investment into the British economy. The trip comes after Reeves has been under constant pressure since unveiling the Treasury Department's spending and tax plans last fall.
Package measures Introduction to the “Fall Budget” The move focused on increasing the tax burden on British companies and sparked widespread criticism from industry leaders who said the move would stifle investment, jobs and growth.
Recent data releases, incl Lower than expected growth Data for November and Government borrowing costs are higher than expected In December, it also contributed to continued discomfort at the Treasury.
The UK found itself in a hotter situation at the start of the year, as the interest rate demanded by investors to hold UK bonds – known as bonds – rose sharply, reflecting market nervousness about the UK's economic prospects.
Reeves quickly stuck to her financial plans and said growing the UK economy was her top priority.
The election of Donald Trump last November was another headache for the centre-left Labor government, with a number of ministers, such as Foreign Secretary David Lammy, making less flattering comments about Trump in the past.
When it comes to political ideology, Prime Minister Keir Starmer, Reeves and the British establishment are looking to build good relations with the White House, especially amid the potential threat of global trade tariffs.
However, while China, Mexico, Canada and the European Union are seen as the main targets of Trump's trade tariffs, Economists believe the UK may escape relatively unscathed.
