The UK should be exempted from tariffs that Donald Trump is threatening to impose on exports to the US, the business secretary has said.
Jonathan Reynolds told the BBC that the US has no goods trade deficit with the UK.
President Trump has doubled down on his threat to impose big tariffs on countries that sell products in the United States.
“I think we have discussions to engage in,” Reynolds said.
The BBC asked whether the UK would be exempt from tariffs, given there is no trade deficit between the two countries. The president did not respond directly, instead talking about the trade deficit that the United States and Canada have and his plan to fix it.
The prospect of higher taxes on imports into the United States concerns many world leaders, as it will make it more expensive for companies to sell goods in the world’s largest economy.
Trump told the World Economic Forum’s World Executives this week that he could produce goods in the United States or face widespread tariffs worth hundreds of millions or trillions of dollars.
However, Reynolds said the United States does not have a trade deficit with Britain when it comes to manufactured goods.
“I know this is something that not only President Trump, but his entire administration, takes very seriously,” he said.
“We clearly have a service-based economy. The United States doesn’t have that deficit with us, so if that’s the logic of that position, we have an argument to engage. I think so.”
Tariffs are a central part of Trump’s economic vision. He sees them as a way to grow the U.S. economy, protect jobs, and raise tax revenues, but he also uses them as leverage to pursue other policies.
He has already said he is considering imposing a 10% tax on imports from China as soon as February 1, claiming he is sending fentanyl, a synthetic opioid, to Mexico and Canada. Masu.
Trump was also threatening 25% tariffs on Canada and Mexico, again citing fentanyl and immigration among his concerns.
But since then, Trump has said he has imposed tariffs and suggested a trade deal may be on the table.
Separately, the Business Secretary said he was leaving open the possibility that the UK would comply with EU rules for food and agricultural products in order to return to frictionless access to European markets.
Reynolds said such an agreement would lower all trade barriers in return to mirror EU rules and standards – and would not pass the government’s red line.
The comments came after EU Trade Commissioner Maros Sefcovic told the BBC that a new deal involving so-called dynamic alignment is possible alongside other areas of pan-European cooperation on customs.
Reynolds said Sefcovic’s tone was consistent with what the government had already said about a “twin-track strategy” on trade.
“We can improve our terms of trade with the EU in a way that doesn’t revisit the customs union, the single market or the Brexit debate. We can do it while pursuing closer trade links around the world.” Reynolds said.
Labor fought last year’s UK general election on a manifesto pledge to lower Brexit-related barriers and deficits for food and agricultural exports to the European Union.
The question has always been how deep such agreements go. No firm decision has been made yet, but it could be resolved in the coming weeks.
Conservatives have expressed anger at reports of a potential new deal for UK-EU trade. And the shadow foreign secretary, Dame Priti Patel, has told MPs that the government is “bending the knee to the EU”.
The Liberal Democrats said the government was not doing enough to smooth trade with the EU.
