Chancellor Philip Hammond indicates President Donald Trump could damage economic prosperity

'Britain's always believed that the best way long-term to protect and promote prosperity is free markets and free trade'

Chancellor Philip Hammond has indicated Donald Trump’s protectionist policies advocated during the presidential campaign could damage economic prosperity.

Speaking ahead of talks with Ma Kai, one of China’s vice-premiers, in London Mr Hammond said he was convinced that Britain would have a “very constructive dialogue with the new American administration”.

But Mr Hammond failed to support the President-elect’s protectionist policies when asked by the BBC about Mr Trump’s proposal to apply 45 per cent tariff barriers to Chinese imports. He told the BBC: “Britain's always believed that the best way long-term to protect and promote prosperity is free markets and free trade.

"President Trump has just been elected by the American people. He will want to consult with his advisers, talk to officials and I'm sure we will have a very constructive dialogue, as we do with the Chinese, with the new American administration."

He continued: “We believe free trade and open markets are good for prosperity, good for the protection of jobs in this economy.

"But we do also recognise the concerns that there are around dumping and unfair practices. It's about getting the right balance in the global trading system, so that we can have the benefits of open markets, while being properly and appropriately protected.”

During America’s bitter and fraught presidential campaign Mr Trump, the billionaire businessman, told the New York Times that he would tax China on products coming into the United States. “I would do a tariff, yes — and they do it to us,” he said.

Mr Trump added that he’s “a free trader,” but that “it’s got to be reasonably fair.”

Mr Hammond, who is hosting the Chinese delegation at London's Lancaster House, added that the “mutual benefits” between London and Beijing are clear. “China is the world's second-largest economy,” he added. “UK exports to China have grown rapidly and Britain is home to more Chinese investment than any other European country.”

The Chinese delegation will be encouraged to invest in projects across Northern England, with 13 potential schemes being showcased by minister. The £5 billion investment portfolio represents a “major opportunity” to increase business ties with investors in Beijing, Mr Hammond said.