Why Britain isn’t ready for a trade war with Trump ...Middle East

Britain is not prepared for a full-scale trade confrontation with the United States, former senior civil servants have warned.

They have used interviews with The i Paper to outline a series of deep-rooted problems with the British state that they say leave the UK ill-equipped to deal with the economic crisis now threatened by Trump’s tariffs.

A combination of tensions and rivalries, structural shortcomings, and a lack of economic firepower at the heart of the Government have left Britain exposed, vulnerable, and at risk of being outmanoeuvred, according to the former Whitehall top brass.

Simon Fraser, an ex-Foreign Office permanent secretary, said he thought the Government may have been “caught off guard by the scale and speed” of the tariffs crisis – and suggested  it had decided not to reveal the severity of the situation.

“There is probably a deliberate effort to downplay the gravity, to avoid antagonising Washington,” he told The i Paper. “Responding sharply could undermine the UK’s negotiating leverage.”

The warnings come as trade talks with the US intensify. Just last week, Chancellor Rachel Reeves travelled to Washington to ease tensions and salvage a long-sought UK-US trade agreement, amid Trump’s threats of new tariffs on a wide range of imports.

Chancellor Rachel Reeves speaks during the Semafor World Economy Summit in Washington last week (Photo: Kayla Bartkowski/Getty)

Different departments control the levers of the UK’s trade policy: the Department for Business and Trade (DBT) handles negotiations, the Foreign, Commonwealth and Development Office (FCDO) leads on diplomacy, the Treasury assesses economic fallout, and the National Security Council (NSC) is meant to coordinate.

Fraser said in practice, this setup was struggling. “There have been tensions between departments,” he said. “There is overlap and competition between the DBT and the FCDO as trade has rapidly become entangled with diplomacy under Trump.”

Whitehall frustrations mount

Sources told The i Paper that internal frustrations have been mounting as Whitehall scrambles to react to the Trump administration and secure a deal. On Wednesday, the Foreign Secretary David Lammy told the House of Lords International Relations and Defence Committee that he wants his department to be “the international delivery arm on growth and economic diplomacy”. But that raises questions of how it fits in with the DBT’s role.

Some suggest reforming government structures to better respond to the Trump-era challenge. One option could be merging trade and foreign policy functions – something Canada and Australia already do. But some feel that Britain’s FCDO should be given more time to get over its last big merger, with the former Department for International Development, in 2020.

Sir Peter Westmacott, a former UK Ambassador to Washington, said: “There are good arguments for bringing together trade and foreign policy, as the Canadians and Australians do. But the UK Government would find it hard to do so right now when the FCDO-DFID merger is still being digested.”

He added: “When dealing with the Trump team, individual relationships seem to matter much more than Whitehall government structures.”

Fraser agrees that structural reform isn’t the answer. “There’s no strong argument for a structural overhaul at this stage,” he said. “What’s needed instead is a mechanism that allows for flexible, rapid decision-making and deployment.”

That mechanism could be a smaller, high-level group like the “quad” used during the Covid pandemic, involving No 10, the Treasury, the DBT and FCDO.

Institute for Government director, Hannah White, said: “A properly supported, quad-style cabinet would increase the UK Government’s ability to operate strategically in a way which is impossible with our current extended cabinet attended by nearly 30 Ministers.

Hannah White, director, Institute for Government

“An executive cabinet would be better able to pivot the Government’s agenda in response to major events and to balance significant, cross-government trade-offs such as those created by the actions of Donald Trump.”

But Lord Peter Ricketts, a former National Security Adviser and another ex-Foreign Office permanent secretary, thinks the NSC (a Cabinet committee chaired by the Prime Minister and attended by senior ministers and security officials) is the answer.

“The machinery exists,” he said. “The NSC enables the PM to set priorities and weigh trade-offs. In the hyper-personalised world of Trump, much of the negotiating has to be done at leader level. The NSC is a flexible tool to ensure all the key ministers and the top advisers (Chief of Defence Staffs, intelligence heads) are working together.”

A ‘G6’ bloc could exclude the US

Whatever the solution is to better decision-making, Trump’s approach is forcing a reckoning, even if it is one that Sir Keir Starmer is trying to avoid. Unpredictable tariffs on UK exports like cars and steel, a transactional style of diplomacy linking trade and defence, disregard for multilateral norms, and the threat of US troop withdrawals from Europe, all threaten to pose the same key choice for ministers: deepen alignment with the US or rebuild ties with the EU.

Some senior officials have floated the idea of a “G6” – a bloc of like-minded democracies excluding the US – to uphold multilateral trade and security. That would mean closer cooperation with the EU, which remains politically sensitive. The UK and EU will hold their first bilateral summit on British soil since Brexit on 19 May – this could be pivotal for Starmer’s planned UK-EU reset.

But the challenged pose by Trump to the British Government goes deeper than deciding whether to prioritise Brussels or Washington. The US President’s fusion of economic and national security priorities means the UK’s traditional separation of trade and diplomacy could leave it exposed on economic security.

‘Lack of heavyweight economic expertise in No 10’

Lord Gus O’Donnell, former Cabinet secretary, warns that there is limited economic firepower at the heart of Government.

“In terms of personnel, the UK has many of the right individuals in place,” he said. “Figures like Gareth Davies, Olly Robbins, Michael Ellam, and James Bowler [all senior Government officials] bring deep institutional knowledge and experience across economic policy, trade, and security. Their involvement provides a strong foundation.”

However, he added: “There’s an absence of heavyweight economic expertise in No 10, and that will make coordination more difficult.”

Trade, once a niche concern, is now central to foreign policy. Without top-level experts bridging economics, diplomacy, and politics, the UK risks being outmanoeuvred.

Brexit created another vulnerability: the UK lost access to Brussels’ trade machinery and must now negotiate independently. In addition, relations with Washington face a reset. Trump’s second administration has installed new officials, disrupting networks built over past years.

Lord O’Donnell said: “In many cases, the UK is effectively starting relationships from scratch, lacking the established personal ties that would typically facilitate smoother negotiation and crisis management.”

Last week on a visit to the US capital, the Chancellor said she wants “to see tariff and non-tariff barriers reduced” as she sought to secure a deal in DC.

Trade has become a battleground – and it’s not going away. Whitehall must adapt to a more volatile, personalised global order, move quickly, and act decisively – or risk being caught off-guard again.

The Government was contacted for comment.

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