UK's Rachel Reeves dismisses idea of cutting trade ties with China amid reports of US pressure

UK’s Chancellor of the Exchequer Rachel Reeves dismissed the idea of economically disengaging with China amid tariff threats from US President Donald Trump. The remarks from Reeves came amid concerns that the US might pressure the UK to limit its trade with China. The British chancellor will be heading to Washington to discuss a trade deal with the Trump administration this week.

Reeves insisted that it would be “very foolish” for Britain to have less involvement with the Xi Jinping administration based on the current circumstances. Earlier this week, The Wall Street Journal reported that US officials would attempt to use trade deals and tariff discussions to economically isolate China.

On Friday, UK Prime Minister Keir Starmer spoke to Trump about the “ongoing and productive discussions” over a trade deal. This was the first conversation between the two leaders since the imposition of 10 per cent tariffs on British goods after Trump announced sweeping reciprocal tariffs worldwide. However, several nations were relieved after the president installed a 90-day pause on these tariffs.

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‘Foolish not to engage’: Reeves on trade with China

During a conversation with the Daily Telegraph, Reeves emphasised that one can not disengage with the second-largest economy in the world. “Well, China is the second biggest economy in the world, and it would be, I think, very foolish not to engage. That’s the approach of this government," the chancellor told the British news outlet.

She also expressed her support for the fast-fashion company Shein floating on the London Stock Exchange. Shein was founded in China, but is now based in Singapore. In the past, the company has faced allegations of supply chain and labour abuses.

Reeves’ remarks over the matter came a week after the government was granted emergency powers by parliament to continue operations at the British Steel plant in Scunthorpe , owned by the Chinese company Jingye. Jingye was accused of not ordering enough supplies to keep the blast furnaces at the site in North Lincolnshire running. This led to a race against time to stop the furnaces from cooling.

Amid the chaos, several MPs questioned links between Jingye and the Chinese government, with the rise in debate on whether Chinese companies should be allowed to invest in the critical infrastructure of the United Kingdom. While responding to the backlash, the Chinese embassy in London criticised some MPs for “anti-China” rhetoric, and an “arrogance, ignorance and twisted mindset” towards the country.

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While commenting on the matter, Reeves told the Daily Telegraph that Chinese investment would be blocked from sensitive areas of critical national infrastructure. She said she was open to Shein being listed on the London Stock Exchange, as it and the Financial Conduct Authority (FCA) had “very strict standards”.

“We have lost business and we have lost companies in recent years, and we’re working closely with the London Stock Exchange to make the UK a more vibrant place to list," she added.

During her trip to Washington, Reeves will hold talks with US officials, including the US Treasury Secretary, Scott Bessent and will be attending the International Monetary Fund’s spring meetings with other finance ministers. It is hoped that tariff reductions for the UK could be agreed within weeks or months.