No 10 says trade with US ‘fair and balanced’ after Trump says UK ‘out of line’

The UK’s trading relationship with the US is “fair and balanced”, Downing Street insisted after Donald Trump said that the UK was “out of line”.

The Prime Minister trusts Mr Trump to keep his word, No 10 said after the US president suggested he thinks a deal can be “worked out” to avoid slapping tariffs on the UK.

Mr Trump suggested in comments overnight that he is poised to expand his tariff regime to both the UK and the EU, but added that he thinks a deal can be done with Britain.

The looming prospect of a trade war with the US threatens to overshadow Prime Minister Sir Keir Starmer’s meeting with EU chiefs.

Asked by the BBC early on Monday if he will target the UK with tariffs, Mr Trump said: “UK is out of line but I’m sure that one… I think that one can be worked out.”

The US president also said discussions with Sir Keir have “been very nice”, adding: “We’ve had a couple of meetings. We’ve had numerous phone calls. We’re getting along very well.”

The Prime Minister’s official spokesman was asked if Sir Keir believes he can trust Mr Trump to keep his word.

“Yes, the Prime Minister has had a really constructive early set of conversations with President Trump, and looks forward to working with him to deepen our trade, investment, security and defence relationship,” he said.

UK ministers have previously suggested the UK could avoid US tariffs because America does not have a trade deficit with Britain.

Downing Street said the US is an “indispensable ally” to the UK.

“We’ve got a fair and balanced trading relationship which benefits both sides of the Atlantic,” No 10 said.

“It’s worth around £300 billion and we are each other’s single largest investors, with £1.2 trillion invested in each other’s economies,” the spokesman said.

‘Atrocity’

The US president said tariffs will “definitely” be placed on goods from the EU, saying America’s trade deficit with the bloc is “an atrocity” that means “they take almost nothing and we take everything from them”.

EU officials have started drawing up contingency plans for the threat of US tariffs, and representatives of the bloc are bullish about the prospect of a face-off with America, the Telegraph reported.

But Sir Keir was more cautious when asked about Mr Trump’s actions, telling reporters on Sunday: “It is early days. What I want to see is strong trading relations.”

The Prime Minister added: “In the discussions that I have had with President Trump, that is what we have centred on – a strong trading relationship.”

On Monday, minister Catherine McKinnell told Times Radio the UK has “every reason to look forward to a positive future with the United States and trade”.

Mr Trump has announced he will impose 25% trade taxes on goods coming from America’s nearest neighbours and largest trade partners – Canada and Mexico – as well as a 10% levy on Chinese goods.

All three nations have vowed to respond in kind to the US president’s actions, sparking fears of a global trade war.

Mr Trump’s comments come as Sir Keir visits Brussels on Monday as he continues efforts to reset Britain’s relationship with the bloc.

Restrictions

The Prime Minister is expected to urge all 27 EU leaders to bear down on Russian President Vladimir Putin and call for EU countries to shoulder more of the burden of aid for Ukraine at the meeting in Belgium.

He will call on them to follow UK and US sanctions on Russia’s faltering economy and praise Mr Trump’s threat of further restrictions, which he will claim has “rattled” President Putin.

The defence-focused visit will also see Sir Keir meet Nato secretary general Mark Rutte at the alliance’s headquarters.

But this too could be overshadowed by comments from the US, given Mr Trump’s remarks since taking office claiming he wants to annex Greenland, currently the territory of Nato ally Denmark, and make Canada the 51st state of America.

Downing Street would not be drawn over whether the UK would support the US or Denmark in a dispute over Greenland.

No 10 said it was “not going to get into hypothetical situations” but said the longstanding position on Denmark and Greenland is “well understood”.

“We’re committed to working with the EU, with Nato, with the US on our collective security. I’m not going to get into hypothetical situations,” the spokesman said.

Ahead of the EU meeting, Sir Keir said: “I’m here to work with our European partners on keeping up the pressure, targeting the energy revenues and the companies supplying his missile factories to crush Putin’s war machine.

“Because ultimately, alongside our military support, that is what will bring peace closer.”

European Union foreign affairs chief Kaja Kallas said “we can have a more productive relationship with the United Kingdom”.

Defence 

She told EU ambassadors on Monday: “They are not in the EU but they are still in Europe. And there is much we can still do.

“More co-operation on defence, for example, is vital and a logical next step.”

Later, as she arrived at the meeting of EU leaders, she said warned Mr Trump there could be “no winners in trade wars”.

“If the United States starts the trade war, then the one laughing on the side is China,” she said. “We are very interlinked. We need America and America needs us as well.”

Liberal Democrat leader Sir Ed Davey has called on Sir Keir to begin talks on rejoining the EU customs union as a bulwark against future US tariffs.

But the Conservatives have set the Prime Minister five “tests” over his approach to Brexit, and claim that if he fails to meet them it will prove he is willing to “undo” the settlement the Tories reached while in power.

Among the commitments the Tories have demanded are for the UK to have continued freedoms over negotiating trade deals, and control of its borders outside the single market.