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Rachel Reeves will use her opening speech at Mansion House on Thursday to tout the benefits of free and open trade, in a direct plea to protectionist US President-elect Donald Trump.
The British Chancellor will use her first speech at Mansion House to outline the Government’s plans to boost economic growth through the three principles of “stability, investment and reform”.
But she will also express her conviction that freedom trade has brought lasting benefits across the world. “The Chancellor should defend her belief that free and open trade is what makes countries richer,” the Treasury said.
Trump threatened to impose tariffs up to 20 percent on all imports into the United States, with higher levies of 60 percent on products from China, to protect American manufacturers.
He has already asked protectionist Robert Lighthizer to return as U.S. trade representative when he becomes president in January.
Earlier this week, Reeves said she would make “strong statements” to the incoming Trump administration about the economic benefits of free trade.
She told the Treasury committee: “The United States also benefits from this access to free and open trade with us and with other countries around the world, and that is what makes our societies richer, to benefit from this open trade. »
But she added that the British government was preparing for different eventualities: “I definitely don’t want to sound optimistic. On the other hand, I am optimistic about our ability to shape the global economic agenda.
Darren Jones, chief secretary to the Treasury, said on Sunday the government was considering potential responses to Washington’s imposition of tariffs.
“Officials will consider many different scenarios, but the Government’s position is that we support free trade and support the US-UK trade relationship, it’s a very strong and very successful relationship,” he declared. News from the sky.
“The government is preparing for all scenarios and we will work with our American counterparts in the usual way,” he said.
Asked by the BBC what would happen if the US imposed tariffs on the UK, Jones replied: “If that situation were to arise in the future, of course we would have to respond to it. What I can’t tell you today is how.
Lighthizer, a former lawyer for the U.S. steel industry, served under the last Trump presidency when Washington launched a trade war with China and imposed tariffs on billions of dollars of imports.
Economists have warned that the prospect of a possible trade war could harm economic development, with Goldman Sachs earlier this week lowering its forecast for UK economic growth for next year from 1.6 to 1.4 cent, citing U.S. tariffs.
Trump’s return will raise fresh doubts about the likelihood that a UK-US trade deal will ever be signed by London and Washington.
When Lighthizer previously served as U.S. Trade Representative, the United States had limited trade agreements with Japan and China.
However, the new Trump administration is likely to impose conditions on a trade deal with Britain that could be difficult for London to accept.
Sir Kim Darroch, former British ambassador to Washington, said in the Observer newspaper that he believed a free trade deal would be proposed by the new Trump regime.
“But the main US demand, as it was at the time, would be unrestricted access to the UK market for low-cost products from the US agricultural sector, including hormone-treated beef and chlorine-washed chicken.” , he said.
“The difficult choice would therefore be: side with the EU or sacrifice our agriculture. »
