UK-US Trade and Tariffs

Debate between Jonathan Reynolds and Jonathan Davies

Thursday 3rd April 2025 Commons Chamber

[Jonathan Reynolds]

I warmly thank my hon. Friend for his question and his support for the approach we are taking. I believe there is a competitive advantage to seek for the UK where we are able to reach agreement with the US. We are able to do those trade deals and negotiations with countries such as India or customs unions such as the Gulf Co-operation Council, and also to get the EU reset right. Although this is not about looking to the past, a lot of smaller businesses stopped exporting entirely after Brexit. They almost certainly set up subsidiaries in the single market, which was not to our advantage, and we saw a real decline in certain types of food and drink trade, even though we had a broadly similar SPS regime in place. We can work on those practical things, and that is our objective. There is real gain to be had from that. We need a partner on the other side who sees the benefits as well, but I believe that they exist, and that is a crucial focus for what we call the twin-track approach to trade under this Government.

[Jonathan Davies (Mid Derbyshire) (Lab)]

I thank the Secretary of State for his statement and for the work he is doing as we face this challenge. I welcome the Government’s commitment to increase defence spending. That is good for not just our national security, but our economy. The sector employs many people in Derbyshire, including at Rolls-Royce. As we seek a trade deal that will create the economic conditions for our public services to thrive and for prices and bills to remain as low as possible, can I encourage the Secretary of State to remind the US of the importance of manufacturers such as Rolls-Royce and the defence sector, and the strategic and economic partnerships they offer us, so that we can work with them more constructively?

[Jonathan Reynolds]

Those are very wise words, and I am grateful to my hon. Friend for putting them on the record. Defence spending is crucial for our national security. The big change and uplift that we have seen is a big part of that, but he is right to say that it would be wrong for anyone in this country to think there is not a domestic economic dividend for that. Those jobs are spread all around the United Kingdom, including in places that are really reliant on them, so it is great news on the economic front for all parts of the UK and Derbyshire—Rolls-Royce is a great example of that.

My hon. Friend talks about how we can get this right with our relationship to the US. We already have some great things under way. We can think about the AUKUS agreement, in which the US treats domestic UK suppliers as part of the domestic supply chain; there is equivalence there. We can think about steel and the role that Sheffield Forgemasters plays, for instance; that is a crucial part of the defence supply chain for the US. These are really important and mutually beneficial strengths to recognise. If we look at the facts and at how our trade inter- dependencies work, there is a great prize on offer if we get this right.