“Trump is emotionally pro-Brit,” declared Reform leader Nigel Farage during a recent lunch gathering in the Palace of Westminster, addressing a room full of journalists.
“Trump is the least isolationist, probably of the whole of the senior Republican Party,” he asserted. True to his bold style, the close ally of U.S. President Donald Trump expressed his concerns about the opportunities missed in securing a free-trade agreement with the United States, lamenting that, “we’ve blown it.”
Farage revealed an interesting insight, recounting a conversation he had with Trump. The U.S. President expressed his desire for a trade deal with the UK, acknowledging, “this will give you [the UK] more than it will give me, but I want to do it.”
His remarks came at a critical time, as intense negotiations were underway to finalize a UK-U.S. trade deal to avert potential tariffs. Just hours after the UK Chancellor of the Exchequer, Rachel Reeves, announced new cuts to government spending aimed at stabilizing public finances, Trump threatened a 25% tariff on car imports.
During her Spring Statement delivered on Wednesday afternoon, Chancellor Reeves committed to restoring £9.9 billion in fiscal headroom over the next five years. She found herself in a challenging position, as the financial buffer left from last October’s budget had been significantly diminished by increased borrowing costs and sluggish economic growth. Her steadfast commitment to avoid additional borrowing for everyday expenses necessitated finding savings elsewhere.
UK Chancellor of the Exchequer Rachel Reeves
However, Reeves’ fiscal headroom remains quite slim against the backdrop of overall government spending, which exceeded £1.2 trillion last year. A poor economic performance in the upcoming months could compel her to consider further cuts, as highlighted by the Institute for Fiscal Studies. They warned that Reeves’ financial strategy left her vulnerable to six months of “damaging speculation and uncertainty over tax policy.”
The timing of Trump’s announcement regarding the tariffs was particularly unwelcome for the Chancellor, following her Spring Statement. “An escalation of tariffs would be bad for the UK but would be bad for the US as well,” she cautioned the next morning.
Despite these challenges, there is a glimmer of hope regarding the possibility of a trade deal. Trump noted, “I think we could very well end up with a real trade deal where the tariffs wouldn’t be necessary. We’ll see,” during a recent press conference at the White House following Prime Minister Keir Starmer’s visit in February.
Nonetheless, the UK is preparing for the possibility of a no-deal scenario. On Friday, Prime Minister Keir Starmer warned that retaliatory tariffs to safeguard UK interests might have to be considered. Such a move would represent a significant setback for Chancellor Reeves.
This week, the Office for Budget Responsibility cautioned that a 20-percentage point increase in tariffs between the U.S. and the rest of the world could result in a 1% contraction of the British economy. While there is potential to avoid such a dire situation, the imposition of tariffs will only intensify speculation that Reeves’ Spring Statement may not have been sufficient, forcing her to reconsider her strategy.
Edited By Ali Musa
Axadle Times International – Monitoring.
