Labour signals industrial intervention, while Conservatives call for revival of US trade talks
The UK government is bracing for economic turbulence following former US President Donald Trump’s sweeping new tariffs, with top ministers acknowledging a shift in global trade dynamics. Chief Secretary to the Treasury Darren Jones declared that the era of globalisation as we knew it has come to an end, prompting a reassessment of the UK’s economic strategy.
Speaking on BBC’s Sunday with Laura Kuenssberg, Jones supported Prime Minister Sir Keir Starmer’s position that Britain must adopt a more interventionist approach to safeguard its national interests. The Labour government is preparing to unveil a revamped industrial strategy, potentially ahead of schedule, in response to the rapidly shifting global economic landscape.
Globalisation ‘Over’, Says Treasury Minister
“We are no longer in the world of cheap imports and frictionless trade,” said Jones. “Globalisation, as we’ve experienced it for the past 20 years, is over.” This stark assessment follows the UK being included in Trump’s 10% baseline import duty, a move that has sparked fears of wider economic retaliation and a potential global recession.
Jones added that the UK must now strengthen domestic industries while building strategic alliances globally. “This isn’t about panic—it’s about foresight. We’re investing in the NHS, skills, and industrial resilience to prepare for what’s next.”
Labour’s Strategy: Protection, Not Retaliation
Sir Keir Starmer has pledged “state-led action” to protect UK firms from what he termed a “tariff storm.” While other countries like Canada and China have responded to Trump’s trade war with retaliatory measures, the UK has taken a more measured approach, opting instead to pursue a bilateral trade agreement with the US.
Starmer insisted the UK is ready to use “industrial policy tools” to safeguard businesses, stating, “The world as we know it has gone. We will do everything necessary to protect Britain’s national interest.”
This includes resisting pressure to water down regulations on issues like food standards and online safety, both of which have become contentious topics in any potential trade negotiations with the United States.
Opposition and Business Leaders Raise Concerns
The Labour government’s approach has come under fire from both sides of the political spectrum. Liberal Democrat Deputy Leader Daisy Cooper called for Parliament to vote on any prospective UK-US trade deal, warning against backroom compromises that could erode digital safety standards or hurt British farmers.
Meanwhile, Conservative leader Kemi Badenoch criticised the notion that globalisation is over, characterising the shift as “fragmentation” rather than collapse. “We still enjoy strong trading relationships with partners around the world,” she said, urging Labour to revisit the trade framework laid out under Boris Johnson during Trump’s previous presidency.
Badenoch argued that Labour’s current strategy was leaving businesses vulnerable. “The new tariffs will disrupt key UK industries and dent revenue expectations outlined in Rachel Reeves’ budget. Labour’s indecision is already costing the economy.”
Digital Services Tax in the Spotlight
One key area of contention is the digital services tax introduced in 2020, which has raised nearly £800 million annually from tech giants. Chancellor Rachel Reeves has indicated that adjustments could be on the table if it helps ease tensions with Washington.
However, Darren Jones reiterated that children’s online safety protections are “non-negotiable”, suggesting the government would not compromise on the Online Safety Act to secure a trade breakthrough.
A Path Forward—or Further Fragmentation?
Despite the current standoff, Jones expressed optimism about future UK-US trade prospects. “Thanks to our diplomatic efforts, we’ve secured better terms than many comparable countries. We’re hopeful a deal can be reached,” he said.
The UK has yet to follow in the footsteps of Canada and China by introducing counter-tariffs, choosing instead to focus on long-term industrial policy and diplomacy. Whether this strategy delivers results—or leads to deeper economic strain—remains to be seen.
As international trade norms are rewritten and domestic industries brace for disruption, Britain finds itself at a crossroads. The Spring Statement and any forthcoming industrial strategy will reveal whether the Labour government’s “calm but firm” approach can weather the storm—and reshape the UK’s economic future.
