Rachel Reeves will meet her US counterpart on Friday as she attempts to make progress on a trade deal during her visit to Washington.
The Chancellor is expected to discuss a potential UK-US trade deal when she sits down with Treasury secretary Scott Bessent after a series of talks with other finance ministers at the International Monetary Fund’s spring meetings earlier this week.
The Government hopes that a deal with the US will mitigate the impact of the tariffs imposed by President Donald Trump at the start of April that rocked financial markets and sparked fears of a global downturn.
Mr Trump’s announcement saw Britain hit with 10% tariffs on all exports to the US, as well as a 25% levy on cars, steel and aluminium.
The Chancellor told the BBC she “understands what president Trump wants to address” when speaking about tariffs.
“We’re all grappling with this issue of tariffs but I think that there is an understanding why president Trump wants to address some of the global imbalances there are in the system,” she told the broadcaster.
Ms Reeves has said there is “a deal to be done” with Washington, despite suggestions from senior US officials that Mr Trump regards the 10% tariff as a “baseline” he is unlikely to go below.
But she has also ruled out several concessions the US is thought to be looking for as the price of a deal.
These include reductions in food standards rules that limit imports of American agricultural goods and changes to online safety legislation that some US politicians believe limit freedom of speech.
A deal could, however, involve a reduction in tariffs on US cars in exchange for a cut in tariffs on British-made vehicles, with Ms Reeves declining to rule out such a move on Wednesday.
So far, the Chancellor has used her visit to the IMF to champion free trade, telling a panel event on Thursday evening she wanted to see both tariff and non-tariff barriers reduced.
But she added that developed economies could not afford to be “agnostic or naive” about where goods were produced at a time when “resilience and security matter more than they have done for a long time”.
At the same event, IMF managing director Kristalina Georgieva praised the Chancellor’s efforts to “lift up growth in the UK”.
Ms Georgieva said: “She is tackling very tough issues, getting reprioritisation of spending, getting the regulatory environment to be more rational and then taking on the battle to get it done, and it’s really impressive.”
Ms Reeves told the BBC that conversations at G20 meetings this week had been difficult.
“Obviously there are strains,” she said.
“We are all following what’s happening in our domestic bond markets, in our equity markets, and we all know that that uncertainty is bad for investment in the UK economy.”
