As the Chancellor Rachel Reeves flies into Washington for a series of high-level meetings, there is lots of spin from the Treasury that she is about to tie up a trade deal with the United States. The plan is that it would save the UK from tariffs and may even give a much needed boost to the British economy. But all the evidence we have tells us that Reeves is a terrible negotiator who constantly overestimates her own abilities. It is far more likely she will blow the deal at the last minute.
It hardly sounds like a very promising meeting. On Friday, Reeves is due to meet with President Trump’s Treasury Secretary Scott Bessent. Aside from reminiscing about their time in the financial markets – Scott as the one of the key executives at George Soros’s hedge fund and Rachel as a customer complaints team leader for the Halifax – they will try to tie up this trade deal.
It is certainly badly needed. The US is Britain’s largest export market, and with a stagnant economy and government borrowing running out of control, we can hardly afford tariffs on everything we sell to America. According to the advance reports, Reeves will offer concessions on tariffs on American cars imported into Britain, and, perhaps more importantly, on some agricultural products as well. If it goes well, she is no doubt hoping to be photographed waving a signed deal at Washington’s Ronald Reagan airport on her way home.
Here’s the problem, though. Reeves has not proved very good at forecasting anything. She failed to work out in advance that removing the pensioner’s winter fuel allowance would trigger a political backlash, that raising employers’ NI would prompt many companies to cut back on staff, or that lecturing everyone about a ‘black hole’ in the public finances would crash business confidence. As the public borrowing figures this week made clear, she can’t even accurately forecast public spending a few weeks out, never mind over a whole year. It is hard to believe she has any idea how to wrap up a deal with the notoriously volatile Trump administration.
After all, she has also ruled out concessions on chlorinated chicken, on tech taxes and online safety, all of which are major issues for the American side of the bargain. The harsh reality is this. All the evidence suggests that Reeves is far too confident of her own brilliance, and increasingly seems to live in a fantasy world all of her own. She is more likely to mess up a deal than actually sign one.
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