UK does not want to ‘escalate’ Donald Trump’s trade wars, says Rachel Reeves
Chancellor Rachel Reeves has said the UK does not want to “escalate” Donald Trump’s trade wars after the US president slapped a new 25% tariff on all imported cars.
Mr Trump signed an executive order last night for the tax to kick in on 2 April – what he has called “liberation day”.
The move ratchets up the global trade war Mr Trump promised he would ignite upon entering the White House.
But speaking to Wilfred Frost on Sky News Breakfast, the chancellor sought to diffuse the looming conflict when asked if the UK intended to respond.
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Chancellor Rachel Reeves has said the UK does not want to escalate Donald Trump’s trade wars
She said: “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. 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.
“So look, we are looking to secure a better trading relationship with the United States. I recognise that the week ahead is important.
“There are further talks going on today, so let’s see where we get to in the next few days.”
The chancellor’s answer does leave the door open to the UK potentially responding to the US president’s actions, which risks a huge impact for the UK’s car industry including manufacturers such as Jaguar Land Rover, Aston Martin and Rolls-Royce.
However, the UK government has sought to maintain a positive relationship with Mr Trump in a bid to avoid further punitive tariffs that he maintains are necessary to grow the US economy by boosting domestic manufacturing and protecting jobs.
Speaking in Paris later on Thursday, Prime Minister Sir Keir Starmer described the tariffs as “very concerning” and said the UK “will keep all options on the table” and “put the national interest first”.
“I think we need to keep, as ever, pragmatic and clear eyed. We are engaged, as you know, in intense discussions with the US on economic arrangements, on a number of fronts, including to mitigate tariffs,” the PM said.
“We will continue in that way because I think that, rather than jumping into a trade war, it is better pragmatically to come to an agreed way forward on this if we can.”
The US president has already imposed tariffs on all steel and aluminium imports to the US, which came into effect on 12 March.
The move has affected UK products worth hundreds of millions of pounds.
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Spring statement 2025 key takeaways
While the European Union has announced it will impose retaliatory tariffs on the US, UK ministers have only said they are “disappointed” to see the tariffs on steel and aluminium and that “all options are on the table”.
Business Secretary Jonathan Reynolds previously said there would be no immediate retaliation by the UK government as negotiations continue over a wider trade deal with the US.
A lucrative trade deal with the US is all the more pertinent for Ms Reeves after she admitted during her spring statement that the Office for Budget Responsibility (OBR) had halved the UK growth forecast for 2025 from 2% to 1%.
However, the fiscal watchdog said that while growth had been downgraded for this year, it had been upgraded for every year after for the rest of this parliament – which is due to end in 2029.
Living standards, as measured by household disposable income, will fall after this year to almost no growth in 2027-28 before rising again due to firms rebuilding profit margins, wage growth slowing, taxes rising, and welfare measures taking effect.
Read more:
Spring statement 2025 key takeaways
What are Donald Trump’s tariffs – and how will they affect the UK?
The chancellor said yesterday that she was “not satisfied with the numbers” for this year.
During the statement, Ms Reeves said she had restored the government’s £9.9bn fiscal “headroom” – the room she has to spend money before she breaks her fiscal rules.
However, the OBR has warned this could easily be jeopardised by global events.
“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% and reduce the current surplus in the target year to almost zero,” it warned yesterday.
A US dollar-pegged stablecoin launched by a cryptocurrency platform tied to US President Donald Trump’s family could complicate ongoing bipartisan efforts to pass stablecoin legislation in Congress, raising concerns about potential conflicts of interest.
The Trump-linked World Liberty Financial (WLFI) crypto platform launched the World Liberty Financial USD (USD1) US dollar-pegged stablecoin in early March, prompting concerns over potential conflicts of interest.
Despite political pushback from Democratic Party lawmakers, WLFI’s stablecoin plans are in line with the current US stablecoin legislation, according to Anastasija Plotnikova, co-founder and CEO of blockchain regulatory firm Fideum.
“The planned backing, audits, qualified custody, public blockchains and no native yield-bearing — all these elements are well in line with the GENIUS and STABLE acts,” she said in an interview with Cointelegraph.
“I would argue that this is a direct expression of support to the US-based stablecoins, and in any case, the stablecoin issuer is subject to the authorization of OCC, state regulators and the Board of Governors of the Federal Reserve,” she added.
Related: Stablecoins, tokenized assets gain as Trump tariffs loom
The launch comes as two major stablecoin bills move through Congress.
The STABLE Act, introduced on Feb. 6, aims to create a clear regulatory framework for dollar-denominated payment stablecoins. It focuses on transparency and consumer protection and enables issuers to choose between federal and state oversight.
Source: STABLE Act
The GENIUS Act, short for Guiding and Establishing National Innovation for US Stablecoins, would establish collateralization guidelines for stablecoin issuers while requiring full compliance with Anti-Money Laundering laws. The act recently passed the Senate Banking Committee by a vote of 18–6.
Related: Trump turned crypto from ‘oppressed industry’ to ‘centerpiece’ of US strategy
Trump’s USD1 stablecoin is “throwing a wrench into bipartisan efforts”
While some see WLFI’s stablecoin as a positive signal for crypto adoption, others fear it may complicate the passage of current legislation, politicizing it in the process.
“Trump’s new US dollar-pegged stablecoin, USD1, is throwing a wrench into bipartisan efforts to pass stablecoin legislation, possibly something like the GENIUS Act,” according to Dmitrij Radin, the founder of Zekret and chief technology officer of Fideum.
“With the Trump family holding a major stake and revenue share, critics like Senator [Elizabeth] Warren and Representative [Jim] Himes are calling out potential conflicts of interest,” Radin told Cointelegraph, adding:
“The concern would be that any law could be seen as financially benefiting Trump, making some lawmakers hesitant. While the bill could still pass, this twist might delay it or force stricter rules to keep it neutral.”
While stablecoins appear ready for mainstream adoption, “political drama” may push innovation offshore if regulators become overly restrictive, Radin said, adding that banks and the Federal Reserve are still “pushing back” against stablecoin adoption.
Meanwhile, crypto industry professionals have urged US lawmakers to create more regulatory clarity around stablecoins and crypto banking relationships before legislators switch their focus to crypto tax laws.
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Binance has discontinued spot trading pairs with Tether’s USDt in the European Economic Area (EEA) to comply with the Markets in Crypto-Assets Regulation (MiCA).
Cryptocurrency exchange Binance has delisted spot trading pairs with several non-MiCA-compliant tokens in the EEA in line with a plan disclosed in early March, Cointelegraph has learned.
While spot trading pairs in tokens such as USDt (USDT) are now delisted on Binance, users in the EEA can still custody the affected tokens and trade them in perpetual contracts.
USDT is available for perpetual trading on Binance. Source: Binance
According to a previous announcement by Binance, the spot trading pairs for non-MiCA-compliant tokens were to be delisted by March 31, which is in line with a local requirement to delist such tokens by the end of the first quarter of 2025.
Delistings on other exchanges in EEA
Binance is not the only crypto exchange delisting non-MiCA-compliant tokens for spot trading in the EEA.
Other exchanges, such as Kraken, have delisted spot trading pairs in tokens such as USDT in the EEA after announcing plans in February.
According to a notice on the Kraken website, the exchange restricted USDT for sell-only mode in the EEA on March 24. At the time of writing, the platform doesn’t allow its EEA users to buy the affected tokens.
Kraken restricted USDT to sell-only mode in the EEA on March 24. Source: Kraken
Among other non-MiCA-compliant tokens, Binance has also delisted spot trading pairs for Dai (DAI), First Digital USD (FDUSD), TrueUSD (TUSD), Pax Dollar (USDP), Anchored Euro (AEUR), TerraUSD (UST), TerraClassicUSD (USTC) and PAX Gold (PAXG).
Related: Tether acquires 30% stake in Italian media company Be Water
Kraken’s delisting roadmap in the EEA only included five tokens: USDT, PayPal USD (PYUSD), Tether EURt (EURT), TrueUSD and TerraClassicUSD.
ESMA doesn’t prohibit custody of non-MiCA-compliant tokens
Binance and Kraken’s move to maintain custody services for non-MiCA-compliant tokens aligns with a previous communication from MiCA compliance supervisors.
On March 5, a spokesperson for the ESMA told Cointelegraph that custody and transfer services for non-MiCA-compliant stablecoins do not violate the new European cryptocurrency laws.
On the other hand, the same regulator previously advised European crypto asset service providers to halt all transactions involving the affected tokens after March 31, adding a certain extent of confusion over MiCA requirements.
Magazine: How crypto laws are changing across the world in 2025
Vanuatu has passed laws to regulate digital assets and provide a licensing regime for crypto companies wanting to operate in the Pacific island nation, which a government regulatory consultant has called “very stringent.”
The local parliament passed the Virtual Asset Service Providers Act on March 26, giving crypto licensing authority to the Vanuatu Financial Services Commission (VFSC) along with powers to enforce the Financial Action Task Force’s Anti-Money Laundering, Counter-Terrorism Financing and Travel Rule standards with crypto firms.
The VFSC has sweeping investigation and enforcement powers under the laws, with penalties stipulating fines of up to 250 million vatu ($2 million) and up to 30 years in prison.
“God help any scammer that goes into Vanuatu because you’ll go to jail,” Loretta Joseph, who consulted with the regulator on the laws, told Cointelegraph. “The laws are very stringent.”
“The thing is, we don’t want another FTX debacle,” she added, referring to the once Bahamas-based crypto exchange that collapsed in 2022 due to massive fraud committed by its co-founders, Sam Bankman-Fried and Gary Wang, along with other executives.
“Vanuatu is a small jurisdiction. Small jurisdictions are preyed on by the players that are looking for no regulation or light touch regulation,” Joseph said. “This is certainly not that.”
“I’m so proud of them to be the first country in the Pacific to actually take a position and do this,” she added.
New Vanuatu law regulates slate of crypto companies
The law establishes a licensing and reporting framework for exchanges, non-fungible token (NFT) marketplaces, crypto custody providers and initial coin offerings.
The law notably allows for banks to be licensed to provide crypto exchange and custody services. Source: Parliament of the Republic of Vanuatu
The VFSC said that the legislation doesn’t affect stablecoins, tokenized securities, and central bank digital currencies even though they “may in practice share some similarities with virtual assets.”
The legislation also allows for the VFSC’s commissioner to create a sandbox to allow approved companies to offer a variety of crypto services for a year, which can be renewed.
Related: Australia outlines crypto regulation plan, promises action on debanking
Joseph said Vanuatu “needed a standalone piece of legislation” that covered Anti-Money Laundering and Counter-Terror Financing requirements, as the country didn’t have existing laws suited to virtual assets.
The regulator said in a March 29 statement that it had developed the legislative framework after years of “assessing the risks associated with virtual assets,” and the laws would open “numerous opportunities for Vanuatu” and improve financial inclusion by allowing regulated services for crypto cross-border payments.
VFSC Commissioner Branan Karae had said in June that the bill was expected to pass that September, but Joseph said the legislation was “not something that was done lightly.” It had been in development since 2020 and was delayed due to changes in government, natural disasters and COVID-19 pandemic-related disruptions.
Magazine: How crypto laws are changing across the world in 2025
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