Trump announced sweeping tariffs on Mexico, Canada and China over the weekend and said they would “definitely happen” with the European Union, sparking fears of a trade war that would derail economic growth and hike consumer costs. He paused tariffs on Mexico on Monday, a day before they were to take effect.

Asked about Britain and whether it would face tariffs next, Trump told reporters on Sunday: “We’ll see how things work out. It might happen with them, but it will definitely happen with the European Union, I can tell you that.”

“The UK is way out of line. We’ll see … but the European Union is really out of line. The UK is out of line, but I think that one can be worked out. But the European Union is an atrocity, what they’ve done.”

He said British Prime Minister Keir Starmer had “been very nice. We’ve had a couple of meetings, we’ve had numerous phone calls. We’re getting along very well. We’ll see whether or not we can balance out our budget.”

Starmer is walking a diplomatic tightrope as he attempts to stave off any tariffs on Britain while also pursuing a “reset” in relations with the EU after years of wrangling over Brexit in a bid to boost a sluggish British economy.

Visiting Brussels on Monday, Starmer became the first British prime minister to attend an EU leaders’ meeting since Britain left the bloc in 2020, as he held talks for a new UK-EU security pact.

Asked at a press conference whether he would be willing to water down his EU reset to keep Trump happy, Starmer stressed that Britain would not pick one side over the other.

“Both of these relations are very important to us. We are not choosing between them – but that’s historically been the position of the UK for many, many decades,” Starmer said.

Trade surplus or deficit?

A British government spokesperson said earlier on Monday the U.S. was an indispensable ally and close trading partner.

“We have a fair and balanced trading relationship which benefits both sides of the Atlantic,” the spokesperson said. “We look forward to working closely with President Trump to continue to build on UK-U.S. trading relations for our economy, businesses and the British people.”

Starmer and his ministers have praised Trump since he was elected, stressing how much Britain imports from the United States and hoping to avoid tariffs at a time when Britain’s economy is already struggling to grow.

Thanks to methodological differences between their national statistics agencies, Britain and the United States both report trade surpluses with each other in goods.

According to British data, Britain had a trade in goods surplus of 1.9 billion pounds ($2.3 billion) with the U.S. in the year to the end of the third quarter in 2024.

In the same period total trade between the two countries was worth 294 billion pounds, making the United States Britain’s biggest trading partner as a single country, although the European Union is bigger as a bloc.

But less than one third of its trade is in goods, which could face U.S. tariffs, with the rest made up of services.

Starmer told reporters at the weekend that in his early discussions with Trump the two men had focused on building on strong trading relations.