UK in last-ditch push to dodge Trump’s ‘Liberation Day’ tariffs: Rachel Reeves says trade with the US is already ‘balanced’ as she hints at hopes of deal ‘in the next few days’

Britain is making a last-ditch bid to dodge Donald Trump’s latest tariffs salvo as Rachel Reeves insisted trade with the US is already ‘balanced’.

Mr Trump has christened April 2 ‘Liberation Day’, vowing to impose ‘reciprocal’ levies offsetting those of all trading partners.

The EU appears to be the main target, with the president raging that the bloc was created to ‘screw’ America.

However, the UK could also be hit as Mr Trump has complained that VAT is unfair – despite being a general sales tax and not focused on imports.

The UK currently imposes 20 per cent VAT on most goods and services. 

The National Institute of Economic and Social Research (NIESR) previously estimated that tariffs of that scale could knock 0.4 percentage points off UK economic growth for the next two years – equivalent to around £24billion.

Keir Starmer has already failed to carve out an exemption from US levies on steel imports, with fears of job losses. 

Mr Trump has christened April 2 ‘Liberation Day’, vowing to impose ‘reciprocal’ levies offsetting those of all trading partners

Giving TV interviews this morning ahead of the Spring Statement, the Chancellor said that Mr Trump was ‘right’ to be concerned about unfair trade – but argued that the UK was not a culprit. 

‘I believe in free and open trade. Last time that Donald Trump was President of the US trade and investment flows between our countries grew,’ she told the BBC’s Sunday with Laura Kuenssberg programme.

‘President Trump is rightly concerned about countries that run large and persistent trade surpluses with the US.

‘The UK is not one of those countries, we have balanced trade between our countries.’

Pressed on whether America would spare Britain from the charges, Ms Reeves pointed to Keir Starmer’s recent visit to the White House.

She said the governments were trying to thrash out a wider trade arrangement that would deal with tariffs. 

‘Let’s see. Our PM Keir Starmer had a really good meeting in the White House with president Trump a couple of weeks ago.. let’s see how that progresses over the next few days,’ she said.

Ms Reeves said she wanted to see ‘barriers to trade come down’ not just with the US but with the EU.

The Chancellor refused to say whether the UK is considering changing or ditching a tax on tech companies as part of a pact to avoid US tariffs.

Keir Starmer has already failed to carve out an exemption from US levies on steel imports, with fears of job losses

Pressed on whether America would spare Britain from the reciprocal charges, Ms Reeves pointed to Keir Starmer’s recent visit to the White House

She said there were discussions ‘around a whole range of things’ with the US related to tariffs.

‘But we will continue to operate on that principle that you should pay taxes in the country in which you operate.’

Challenged if she might tweak the digital services tax, Ms Reeves said: ‘You’ve got to get the balance right and those discussions at the moment are ongoing.

‘We want to make progress. We do not want to see British exporters subject to higher tariffs and we want to see trade barriers fall right across the world.’