The UK government has said it believes it can strike a deal, buoyed by Donald Trump’s remarks in February when the president said the US and Britain could “very well end up with a real trade deal where the tariffs wouldn’t be necessary”.

The chancellor told MPs that a hasty response to US tariffs would put the 'prize' of an economic deal at risk.

Trump announced fresh levies on goods coming into his country including 10% on all UK imports and 20% on those from the European Union. The UK has spent weeks working on a trade deal with the US to avoid the full impact of the level of tariffs introduced on countries such as Canada and China.