UK Government Pushed by Industry to Deploy ‘Trade Bazooka’ Against US

The United Kingdom may be taking cues from the European Union and gearing up to deploy a “trade bazooka” in retaliation against renewed tariff threats from the United States.

The British Chambers of Commerce (BCC) is urging the government and Prime Minister Keir Starmer to consider the tactic—which would involve introducing a slew of measures aimed at blocking U.S. trade and investment—as a means of ensuring British competitiveness in the face of persistent geopolitical shocks.

Those include persistent browbeating from its biggest trading partner.

According to the BCC, U.K. businesses have also been pummeled and “permanently bruised” by the pandemic, Brexit and the wars in Ukraine and Iran (which have invited lasting supply chain chaos). In a newly released report, the group calls for urgent action to help secure critical manufacturing inputs and protect the economy from the maelstrom of external pressures.

The strategy includes taking a “robust” approach to the EU’s Made in Europe agenda to ensure that U.K. businesses are a part of wider European supply chains and involving more British businesses in the defense sector as a matter of both national and economic security. Perhaps most importantly, though, the BCC recommends that the government “add a ‘trade bazooka’ to its arsenal of responses to threats of economic coercion.”

The legislative weapon would give ministers the power to pull a number of levers, from implementing new duties to restraining market access, upping scrutiny on American investment and instituting subsidy controls in response to threats from the U.S.

The EU first devised the so-called bazooka, more formally known as an Anti-Coercion Instrument (ACI), in 2023 as a means of protecting its own member states from breaches of international trade commitments. European nations discussed using the tool to combat Trump’s tariff threats against EU members that stood against the U.S. taking control of Greenland earlier this year.

The BCC said it’s crucial that the government take action to protect the U.K.’s standing in the regional economy. As it stands, over 75 percent of the country’s manufacturing exports are made with imports from other countries, putting many sectors in danger of disruption. Imports and exports make up more than 60 percent of the U.K.’s GDP, which means that access is everything.

The BCC said it’s calling for the formation of an Economic Security Cabinet Committee that would be chaired by Starmer and tasked with coordinating policies across the government on issues like tariffs and critical imports.

“Over the past decade, British businesses have weathered some of the toughest economic shocks we’ve faced in the past 100 years. Through sheer resilience and ingenuity, they have kept trading in an increasingly unpredictable global environment,” BCC director general Shevaun Haviland said. “But it’s clear that this is not enough. The U.K.’s inadequate economic security has become a drag on growth, competitiveness and national strength; yet it is still not given the focus and urgency it demands.”

“We now live in a world where trade interests may be weaponized, and where failing to secure key raw materials means failing to grow,” Haviland added.

The report’s release comes on the heels of Trump’s comments last Thursday to a group of reporters at the Oval Office related to the U.K.’s digital services tax—a point of particular contention in the U.S.-U.K. trade relationship.

The American Commander in Chief said he’d hit Britain with a “big tariff”—how big, no one knows—if it declined to roll back the 2 percent tech tax, which applies to the U.K. revenue generated by American firms like Meta, Alphabet, Amazon and Apple.

The comments fly in the face of a “breakthrough” trade deal worked out by the U.K. and the U.S. last May, which did not include changes to the digital services tax.

“A lot of countries rushed into deals with the U.S. They weren’t really worth the paper they were written on,” Canadian Prime Minister Mark Carney said in a televised interview with news outlet CBC on Monday. Canada has been all but iced out of negotiations with the U.S., a sticky spot to be in with the six-year review of the U.S.-Mexico-Canada Agreement taking place in July.

“We could sit down this afternoon and hammer the whole thing out over the course of 10 days if the U.S. side… had the bandwidth and the inclination to go through it,” the lawmaker said. “But it takes two to negotiate it through, and they’re not all the way there.”

Asked whether he believes other U.S. trading partners are satisfied with the deals they’ve made, Carney said, “Certainly not in private.”