PM and Trump step up trade talks - as chancellor warns it's 'foolish' not to engage with China

It would be "foolish" to stop engaging with China, the chancellor has said, as Sir Keir Starmer held his first call with Donald Trump since he put 10% tariffs on goods imported from the UK.

Rachel Reeves will hold talks with the US next week amid efforts to establish a trade deal, which the government hopes will take the sting out of the president's tariffs. There has been speculation Washington may press the government to limit its dealings with China as part of that deal, having launched a tit-for-tat trade war with its economic rival.

But Ms Reeves told The Daily Telegraph:"China is the second-biggest economy in the world, and it would be, I think, very foolish, to not engage. "That's the approach of this government." She suggested she would back the fast fashion firm Shein launching an initial public offering (IPO) in the UK, saying the London Stock Exchange and Financial Conduct Authority have "very strict standards" and "we do want to welcome new listings".

Shein, which was founded in China but is now based in Singapore, has faced several obstacles to its efforts to float, including UK political pressure over alleged supply chain and labour abuses. Read more from Sky News:Trump says he might give up on Ukraine peace talksPub hours extended for 80th VE Day celebrationsHow Japan could shape the future of the NHS 'Productive discussions' When it comes to a UK-US deal, The Daily Telegraph has reported officials in Washington believe an agreement could be weeks away.

But on Thursday, Mr Trump said he was in "no rush" to reach any deals because of the revenues his new tariffs are generating. During Sir Keir's call with the US president on Friday, the two leaders talked about the "ongoing and productive discussions" on trade between the two nations, according to a Downing Street spokesperson.

"The prime minister reiterated his commitment to free and open trade and the importance of protecting the national interest," Number 10 said. As well as the 10% levy on all goods imported to America from the UK, Mr Trump enacted a 25% levy on car imports..