US vice president JD Vance has said America and the UK are “working very hard” on a trade deal and he believes they will reach a “great agreement”.
Donald Trump imposed sweeping tariffs on imports to the United States several weeks ago, rocking the world economy, sending stock prices tumbling and sparking fears of a global recession.
Since then, Mr Trump has rowed back on those tariffs, reducing the rate paid on imports from most countries to 10% and, on Saturday, exempting electronics such as smartphones and laptops from the levy – including the 145% charge on imports from China.
The UK was already going to face a blanket 10% duty before Mr Trump’s so-called “Liberation Day” announcement of worldwide tariff increases.
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The UK government has been hopeful of a deal to exempt the UK from Mr Trump’s tariffs, and in an interview with the website UnHerd on Tuesday, Mr Vance said he was optimistic that both sides could come to a mutually beneficial agreement.
“We’re certainly working very hard with Keir Starmer’s government” on a trade deal.
“The president really loves the United Kingdom. He loved the Queen. He admires and loves the King. It is a very important relationship. And he’s a businessman and has a number of important business relationships in [Britain]. But I think it’s much deeper than that.
“There’s a real cultural affinity. And, of course, fundamentally, America is an Anglo country.
“I think there’s a good chance that, yes, we’ll come to a great agreement that’s in the best interest of both countries.”
Mr Vance said the “reciprocal relationship” between the US and UK gave Britain a more advantageous position than other European countries when it comes to negotiating new trade arrangements, adding: “While we love the Germans, they are heavily dependent on exporting to the United States but are pretty tough on a lot of American businesses that would like to export into Germany.”
Chancellor Rachel Reeves will aim to continue negotiations for an economic deal with the US later this month when she travels to Washington to attend the International Monetary Fund’s spring meetings with other finance ministers.
Vance criticises Europe on defence
During the interview, where he spoke on the phone from the West Wing, Mr Vance also touched on the apparent shift in the US and Europe’s security relationship.
He said: “The reality is – it’s blunt to say it, but it’s also true – that Europe’s entire security infrastructure, for my entire life, has been subsidised by the United States of America.”
Mr Vance said that as recently as a quarter-century ago Europe had “many vibrant militaries, at least militaries that could defend their own homelands”, but nowadays he believes “most European nations don’t have militaries that can provide for their reasonable defence”.
The vice president continued: “The British are an obvious exception, the French are an obvious exception, the Poles are an obvious exception. But in some ways, they’re the exceptions that prove the rule, that European leaders have radically underinvested in security, and that has to change.”
Mr Vance said his message to Europe was the same one as that shared by then-French president General Charles de Gaulle during the height of the Cold War.
The US vice president said General de Gaulle “loved the United States of America, but (he) recognised what I certainly recognise, that it’s not in Europe’s interest, and it’s not in America’s interest, for Europe to be a permanent security vassal of the United States.”
Mr Vance also suggested he believes a strong Europe would better for America.
He continued: “I don’t think that Europe being more independent is bad for the United States – it’s good for the United States. Just going back through history, I think – frankly – the British and the French were certainly right in their disagreements with Eisenhower about the Suez Canal.”
Mr Vance added: “I think a lot of European nations were right about our invasion of Iraq. And frankly, if the Europeans had been a little more independent, and a little more willing to stand up, then maybe we could have saved the entire world from the strategic disaster that was the American-led invasion of Iraq.”
Asked about Mr Trump’s tariff regime and its impact on the stock market, Mr Vance said: “Any implementation of a new system is fundamentally going to make financial markets jittery.
“The President has been very consistent that this is a long-term play… Now, of course, you have to be responsive to what the business community is telling you, what workers are telling you, what bond markets are telling you. These are all variables that we have to be responsive to…. (to) make the policy successful”.
