BURSTBritish Chancellor of the Exchequer Rachel Reeves warned against heightening tensions with President Trump during his self-declared trade war against nations that oppose his “America First” policy.
“We're not at the moment in a position where we want to do anything to escalate these trade wars. Trade wars are no good for anyone,” Reeves said during an appearance on Sky News.
“It will end up with higher prices for consumers pushing up inflation after we've worked so hard to get a grip of inflation, and at the same time, will make it harder for British companies to export,” she added.
Her words echo the concerns of economists who believe harsher tariffs will put a burden on consumers across the globe by forcing prices to increase as the costs of imports and exports rise.
Amid concerns, the European Union shared plans to enforce levies in response to Trump’s radical policies and Canada has threatened to do the same.
The president said if the two join forces, he’ll just increase the current tariffs, further fueling the impact of the trade war.
“If the European Union works with Canada in order to do economic harm to the USA, large scale Tariffs, far larger than currently planned, will be placed on them both in order to protect the best friend that each of those two countries has ever had!” Trump wrote on Truth Social early Thursday morning.
The post comes a day after Trump announced a 25 percent tariff on foreign-made cars and auto parts in an effort to create a national manufacturing boom. United Auto-Workers President Shawn Fain applauded the efforts while international leaders labeled the move a “direct attack.”
The British Chancellor said she is working to maintain an open relationship despite stiff policies from the current administration.
"Look, we are looking to secure a better trading relationship with the United States. I recognise that the week ahead is important,” Reeves told Sky News.
"There are further talks going on today, so let's see where we get to in the next few days."
Reeves has secured £9.9bn fiscal "headroom" while in leadership but the United Kingdom Office for Budget Responsibility (OBR) said the economic wiggle room could be compromised by mangled trade agreements.
“If global trade disputes escalate to include 20 percentage point rises in tariffs between the USA and the rest of the world, this could reduce UK GDP by a peak of 1 percent and reduce the current surplus in the target year to almost zero," OBR wrote in a statement according to Sky News.