Trump's Trade War Threat Prompts UK Business Leaders to Prepare New Weapons
Jakarta, CNBC Indonesia - Leaders of UK businesses are urging the government to build an EU-style “trade bazooka” to protect British economic interests from Donald Trump’s tariff threats. The British Chambers of Commerce (BCC) stated that the UK’s current inadequate economic security is jeopardising growth and jobs on Monday (27/04/2026).
“The UK’s insufficient economic security has become a barrier to growth, competitiveness, and national strength,” said BCC Director General, Shevaun Haviland.
The lobbying group is pressing Keir Starmer to lead the protection of the UK from external crises resulting from years of neglect by previous administrations. They assess that the UK needs to fortify itself against harmful economic policy pressures from other countries.
“The government must add a ‘trade bazooka’ to its arsenal to respond to economic coercion threats,” states the official BCC report.
Geopolitical tensions, the impact of Brexit, the pandemic, and wars in Ukraine and the Middle East have left UK companies facing an increasingly difficult global trade backdrop. This demands emergency actions to protect domestic firms from other countries’ trade policies.
“This organisation is right to identify that free and fair trade is important; we want to ensure open markets are not distorted as weapons,” revealed Trade Minister, Chris Bryant.
The US President last week threatened to impose “major tariffs” on the UK unless they cancel the digital services tax on US tech companies. This threat has become the main trigger for the urgent call to strengthen the UK’s economic defence instruments.
“New legislation must include powers for ministers to use various instruments, from tariffs to market access,” emphasised the BCC.
In its recommendation report, the BCC states that urgent steps are needed to halt the decline in the UK’s competitiveness in an increasingly unstable world. One priority is to emulate Brussels’ powerful anti-coercion instrument.
“This step could involve restricting access to public procurement programmes and financial markets, as well as limiting intellectual property rights,” the report states.
The EU’s instrument allows the bloc to impose broad restrictions on trade in goods and services against countries engaging in economic aggression. The UK is seen as needing similar powers to prevent other countries from engaging in policy intimidation.
“We have taken action by strengthening supply chains to reduce our vulnerability to market shocks,” added Chris Bryant, explaining the government’s position.
The BCC is also urging ministers to take a robust approach to the “Made In Europe” agenda so that UK businesses remain involved in European supply chains. They are calling for a greater role for domestic companies in defence procurement and the establishment of an economic security cabinet committee.
“Just last month I was in Europe lobbying on behalf of business as part of the Made in Europe campaign,” said Bryant again.
The BCC emphasises that the government must be prepared to take a more muscular response amid the increasingly menacing global landscape. Without it, the UK’s economic position will continue to weaken in the eyes of global trading partners.
“The government must ensure there is proper protection for British commercial interests in the face of external pressures,” wrote Haviland in her statement.
The UK’s steps to retaliate against US services sector companies carry significant risks given the massive scale of US economic involvement in the UK. The US is the UK’s single largest trading partner, accounting for one-fifth of total global trade.
“US companies are known to have over 640 billion pounds in investments embedded in the UK region,” the report concludes.