Chancellor Rachel Reeves is set to position the United Kingdom as a beacon of stability for international investors, aiming to capitalise on the global economic uncertainty stirred by former US President Donald Trump's renewed tariff threats.
Davos Pitch: Stability in a Volatile World
Reeves, alongside Business Secretary Peter Kyle, will deliver this message at the World Economic Forum in Davos, Switzerland, this week. Their core argument is that in a time of increasing global volatility, the UK "offers the stability" businesses require to commit long-term investment.
"In a volatile world Britain stands out," Reeves will state. "This government is making sure Britain is home to the stability, talent and capital that businesses and investors want and that drive greater growth." She plans to tell the assembled politicians and investors: "Some countries give you a platform, but Britain gives you momentum. My message at Davos this week is clear: choose Britain – it's the best place in the world to invest."
Turning 'Adversity' into Export Opportunity
The immediate source of the volatility is Donald Trump's threat to impose sweeping tariffs. He has stated he will levy a 10% tariff on imports from the UK, Denmark, Norway, Sweden, France, Germany, the Netherlands, and Finland from 1 February 2026. This would rise to 25% from June unless a deal is reached for the "complete and total purchase of Greenland" from Denmark.
While acknowledging tariffs are a "lose-lose" policy, Business Secretary Peter Kyle suggested the "normalisation" of such disruption could present openings. "There are also 'opportunities in adversity' for British exporters," he told the Press Association. He urged the UK to be "more entrepreneurial, fleet of foot, bolder" in seizing global opportunities amidst the upheaval.
However, the risks are severe. Analysis warns the proposed US export levy could reduce Britain's GDP by 0.1%, with the potential to wipe off 0.3% if tariffs hit 25% – a blow that could tip the UK's fragile economy into recession.
Navigating Strained Relations and New Partnerships
Kyle admitted the UK's relationship with the Trump administration is being "tested" by the Greenland crisis. He confirmed ministers are having "frank conversations" with US counterparts, including Commerce Secretary Howard Lutnick and Trade Representative Jamieson Greer.
In response to the crisis, Prime Minister Sir Keir Starmer made an emergency address from Downing Street on Monday 19 January 2026, calling for the country to "pull together". He emphasised resolving the issue through "calm discussion between allies". The situation was treated with such gravity that Reeves cancelled an event at the London Stock Exchange to attend the PM's statement.
As tensions with the US simmer, the government is looking elsewhere. Kyle highlighted China as a "more extreme example" of both opportunity and challenge, noting it is the world's second-largest economy and biggest manufacturer. Sir Keir Starmer is expected to visit China early this year to bolster trade links, signalling a potential strategic pivot in UK trade policy amid the transatlantic strain.
