Defence budget could face almost £2bn worth of cuts if Trump imposes tariffs on UK, new report warns
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It comes amid fears of a global trade war after Donald Trump threatened to impose sweeping tariffs on goods entering the US. The UK’s defence budget could face billions of pounds worth of cuts if Donald Trump imposes tariffs on the UK, a new forecast has warned.
![[Foreign Secretary David Lammy has said he would seek early talks with the new president (Stefan Rousseau/PA)]](https://static.independent.co.uk/2025/01/20/16/d6ae855a9e5a8cd5753c20e8a74856c0Y29udGVudHNlYXJjaGFwaSwxNzM3NDc2Mzgx-2.78647767.jpg)
Mr Trump, who was sworn in as president on Monday, sparked fears of a global trade war after threatening to impose sweeping tariffs of as much as 20 per cent on all goods coming into the country – a figure that rises to 60 per cent for those from China.
Independent forecasts, included in new research from the House of Commons library commissioned by business and trade committee chair Liam Byrne, suggest that tariffs from the US could cause the UK’s GDP to decline by as much as 0.9 per cent. “In the worst case scenario, tariffs could knock nearly £2 billion off defence by 2030,” Mr Byrne told The Times. “Higher duties mean weaker defence.
“Britain needs to explain in really simple terms that we want to raise our defence spending, but that the amount is going to be smaller if growth is less because of American tariffs.”. It comes amid mounting pressure from Mr Trump on the UK and its European allies to boost defence spending and stark warnings about Britain’s defence capabilities.
On Saturday, a former security adviser to Gordon Brown warned that the UK’s military is “grotesquely underfunded” after Sir Keir indicated that Britain could send peacekeeping troops to Ukraine. Lord West of Spithead, a retired admiral of the Royal Navy and Mr Brown’s former adviser, said such a move would be “highly risky”, arguing the “hollowed out” armed forces do not have the resources to do so.
