Rachel Reeves said she was “confident” that trade flows with the US would continue under President-elect Donald Trump despite his proposed tariffs.
The Chancellor was asked what effects the US election outcome would have on her growth plans when she faced questions from the House of Commons Treasury Committee.
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Investment banking firm Goldman Sachs has cut its forecast for UK economic growth next year from 1.6 to 1.4%, while EU officials expect a fall in exports to the US of €150bn (£125bn), she was told.
Reeves said it was “too early” to start making changes to the forecast due to Trump’s win, but the trading relationship between the UK and the US was “absolutely crucial”.
“The United States is our largest trading partner,” she said. “I believe trade between our two countries amounts to 311 billion pounds sterling annually.”
“I am confident that these trade flows will continue under the new president.”
A tariff is a tax on imports or exports of goods between countries, used to encourage or protect domestic industry.
Trump said he wants to increase tariffs on goods imported from around the world by 10%, and rise to 60% on goods coming from China, as part of his plan to protect American industries.
Rachel Reeves. Pic: PA
according to Analysis by Sky News correspondent Paul KelsoIt is an extremely protectionist move that could lead to a trade war with China and the European Union.
Ms Reeves said the UK government would “continue to champion free trade” with him, adding: “We will make strong presentations about the importance of free and open trade, not just between us and the US, but globally.” “
“We will prepare for different possibilities.”
Asked by former Conservative Treasury Secretary John Glenn whether it was realistic to seek influence over Trump, the adviser said: “We have another two months before the inauguration.
“Obviously we will start those conversations. We will prepare for different possibilities.
“I certainly don’t want to sound optimistic in any way. On the other hand, I am optimistic about our ability to shape the global economic agenda, as we have done under successive governments.
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Trump won the US presidential election over his Democratic rival, Kamala Harris It sparked mixed reactions in the UK.
Prime Minister Sir Keir Starmer and Conservative Leader Kemi Badenoch congratulated him on the “impressive” result and pledged to work closely with him.
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However, Liberal Democrat leader Sir Ed Davey said it was a “dark, dark day for people around the world” and also described Trump as a “dangerous destructive demagogue”.
Mr. Trump’s victory was confirmed when It has surpassed 270 electoral college votes By winning Wisconsin, he remains on track to claim all seven swing states.