Downing Street has declined to officially back a “buy British” campaign in response to Donald Trump’s tariffs.
The prime minister’s spokesman said the UK was “an open-trading nation” and the government was “not going to tell people where they buy their stuff”.
Chancellor Rachel Reeves told MPs such a campaign would be “inward looking” and was “not the way forward”, in response to Liberal Democrat calls to encourage the public to buy more British goods and produce.
But the chancellor is reported to be reviewing Whitehall procurement rules to give an advantage to British firms bidding for government contracts.
The government has repeatedly stressed that it will not be rushed into retaliatory measures after the US slapped a 10% import tax on nearly all UK products entering the US, on top of already-announced 25% levies on aluminium, steel and cars.
But ministers say they will accelerate measures aimed at helping industry weather the global economic storm that they were planning to announce later this year in a new industrial strategy.
During Treasury questions in the Commons, Lib Dem Treasury spokesperson Daisy Cooper urged the chancellor to show people concerned about the impact on their cost of living that “Britain is not going to take Trump’s tariffs lying down”.
And she called on the government to get behind her party’s campaign for a new “Made in Britain” logo for consumer products backed by an advertising blitz.
Reeves told the Lib Dem MP “ratcheting up barriers to trade, ratcheting up tariffs will not be in our country’s interests, whether that’s in inflation or indeed for supply chains”.
She added: “In terms of buying British, I think everyone will make their own decisions.
“What we don’t want to see is a trade war, with Britain becoming inward-looking, because if every country in the world decided that they only wanted to buy things produced in their country, that is not a good way forward.”
The prime minister’s official spokesman also rejected the “Buy British” campaign but added that the government “is always going to back British producers, British manufacturers”.
In response to a call from Tory MP John Hayes to use government procurement to back British jobs and British products, Rachel Reeves said Cabinet Office minister Pat McFadden “has set out new reforms to procurement rules to enable just that”.
She added: “We want more British businesses to win contracts, we want more small businesses in Britain to win contracts.”
In February, the government set out new rules aimed at making it easier for small and medium-sized British companies to bid for government contracts, building on legislation passed by the previous Conservative government.
According to the Daily Telegraph, the government will go further when it unveils its industrial strategy and public spending review later this year.
Major public sector infrastructure projects – such as transport, offshore wind and defence – will be told to “Buy British”, the newspaper says.
The chancellor told the Commons US tariffs would continue “to have huge implications for the world economy”.
“These implications have been reflected in the reaction that we’ve seen in global markets in recent days, which the financial authorities have of course been monitoring closely,” she said.
“This morning I spoke to the governor of the Bank of England, who has confirmed that markets are functioning effectively and that our banking system is resilient.”
She sought to reassure families and businesses concerned about economic turmoil that “we have your backs” and that the government would “act decisively” in the national interest.
She told MPs the government’s priority was to secure a trade deal with the US, and that talks with the White House were ongoing.
“A trade war is in nobody’s interest. It is why we must remain pragmatic, cool headed, and pursue the best deal with the United States that is in our national interest,” she added.
