Rachel Reeves Says It's "Too Early" To Know Donald Trump's Impact On UK Economy
Chancellor Rachel Reeves appeared before the Treasury committee for the first time on Wednesday afternoon. (Alamy)
3 min read
Chancellor Rachel Reeves has told MPs it is "too early" to draw conclusions on what impact president elect Donald Trump's economic policies will have on the UK economy.
Trump was declared the winner of the 2024 US presidential election on Wednesday after claiming victory in a number of key swing states over Democratic candidate Kamala Harris. Prime Minister Keir Starmer congratulated Trump on his "historic election victory", and said that "the UK-US special relationship will continue to prosper on both sides of the Atlantic for years to come".
Appearing before the Treasury Committee of cross-party MPs on Wednesday afternoon, Reeves was asked about predictions that UK economic growth could be damaged if Trump fulfils threats to impose tariffs on goods imported to the US from countries including Britain.
"Goldman Sachs have cut their expectation of growth next year from 1.6 to 1.4 per cent for UK economy, citing potential tariff risks," said Conservative MP and former Treasury minister, John Glenn, at the committee meeting on Wednesday afternoon.
"The EU too are forecasting a reduction in EU exports to the US of €150bn, a 10 per cent fall in the value of the euro, and a cut in GDP of Germany, for example, of one and a half percent.
"How do you accommodate that in your plans going forward?"
Reeves said she believed it was "too early" to draw conclusions on what Trump's second presidency could mean for economic growth in the UK.
"It is too early to start making changes to forecast for our economy because of the election of a president in the United States," said Reeves.
"But I would say this: our trading relationship — our economic relationship — with the United States is absolutely crucial.
"The US is our single biggest trading partner. Trade between our two countries is £311bn per year. So of course that relationship is crucial."
The Chancellor of the Exchequer added: "Our special relationship obviously goes much beyond trade, for our security and defense relationship as well, And I'm confident that those trade flows will continue under the new president.
"And indeed, President Trump has been President of the United States before and we continue to have a strong and healthy economic relationship."
The comments come after Foreign Affairs Committee chair and Labour MP Emily Thornberry told PoliticsHome she was concerned about the impact a Trump presidency could have on UK trade on Tuesday ahead of Trump's victory.
"If you take him his word, he's threatening 20 per cent tariffs now," said Thornberry.
"Britain exports to America, we export more to America than we do any to any other country...
"20 per cent tariffs on that's going to make life very difficult, and we'll need to decide how we're going to deal with that."
Thornberry, a former shadow cabinet minister, said the UK may be forced into a "temporary realignment" if Trump weakens US support for NATO and Ukraine's efforts to defeat Russia.
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