This is how Britain survives a supply chain crisis

Today, amid escalating tensions in the Middle East, shifting tariff regimes, and intensifying global competition for critical resources, it has become the defining challenge for British business.

From the pandemic and the war in Ukraine to current instability in the Middle East, each crisis exposes the same recurring flaw: our supply chains are fragile and prone to failure. When these shocks hit, essential supplies vanish, costs surge, and businesses are left scrambling. The traditional "just-in-time" manufacturing model - once praised for maximising efficiency by minimising inventory - no longer looks like a shrewd cost-saving measure; it looks like a strategic liability.

The stakes for the UK are particularly high. Three quarters of our goods exports begin with an import. Our growth sectors - electric vehicles, clean energy, advanced manufacturing and defence -depend on materials we cannot reliably source at scale. Demand for lithium alone is projected to rise by over 13,000 per cent by 2035, with copper and cobalt not far behind. No amount of domestic production will close that gap.

At the same time, other economies are moving fast. The US has deployed subsidies and tariffs to reshore production, China has tightened its grip on critical minerals, while the EU has armed itself with new tools to respond to economic coercion and secure supply chains.

The UK cannot afford to stand still. As a highly open, trade-intensive economy - where imports and exports together account for over 60 per cent of GDP - our exposure is clear. This is not about retreating from global trade, but about managing it more deliberately in a more contested world.

So what needs to happen?

Britain’s immediate priority must be to close its critical security gaps and add a ‘trade bazooka’ to its arsenal of responses to threats of economic coercion, similar to those available to the EU. The Government should bring forward an Economic Security Bill that empowers ministers to protect the UK’s economic interests in an increasingly volatile world. By formalising powers to impose tariffs, limit market access, and screen investments, the UK can protect its economy while maintaining safeguards for legitimate business.

New powers alone, however, are not enough. Economic security cuts across trade, energy, defence and technology. It is a national priority and requires leadership from the very top. The creation of a new Economic Security Cabinet Committee, chaired by the Prime Minister, is essential to bring urgency and coherence to decision‑making. Supply chain resilience can no longer sit on the edges of policy - it must be at the centre.

Action is also required across the sectors under most pressure.

In steel, global overcapacity and rising protectionism are distorting markets and pushing up costs for UK manufacturers. The Government should forge a ‘clean steel’ agreement with the EU, the US and other like-minded partners such as Japan and Canada. That would build WTO‑compliant arrangements that incentivise decarbonisation while tackling overproduction.

On defence, the UK’s national security must be a defining priority for the economy over the next decade, and British businesses are standing by to support. This must start by bringing forward the long-awaited Defence Investment Plan and simplifying procurement rules, which would allow thousands more UK SMEs to participate in supply chains.

And in our relationship with Europe, realism must prevail. UK and EU supply chains remain deeply integrated, especially in automotive and advanced manufacturing. The Government should re‑engage with Brussels to adapt the Industrial Accelerator Act and related regulations, ensuring the UK is recognised as an indispensable partner in Europe’s production networks.

These are practical, targeted steps. But they point to a broader shift in mindset: supply chain resilience is no longer about defence - it’s a growth lever.

As global competition for critical resources intensifies, countries with secure, diverse supply chains will lead. The UK has the businesses to succeed. The era of buzzwords is over; it’s time to build a supply chain strategy fit for a more uncertain world.

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Shevaun Haviland is Director General of the British Chambers of Commerce, providing support to 300,000 firms across a UK and global network.

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