Business leaders call for defence industry to be made a national priority as critical material shortages, steel pressures and economic coercion threaten UK supply chain resilience.
The British Chambers of Commerce (BCC) has issued a stark warning that the UK’s defence industrial base is increasingly exposed to trade shocks and supply chain disruption, calling on Government to elevate defence to a defining national priority over the next decade and pull more British businesses, particularly SMEs, into the defence sector.
In its new report, Delivering Growth: Resilient Global Supply Chains, the BCC sets out a series of measures aimed at protecting the UK’s access to the materials, components and industrial capacity that underpin defence manufacturing – from steel and semiconductors to lithium, copper and other critical minerals essential to modern military platforms, electronics and clean-energy systems with dual-use applications.
Defence Made A National Priority
Central to the report is a call for national security to become a defining priority for the UK economy, with broader involvement of British businesses across the defence supply chain. The BCC argues that strengthening national security and economic security are now inseparable, and that the benefits of increased defence spending must reach further down the supplier base to small and mid-tier firms.
Shevaun Haviland, Director General of the British Chambers of Commerce, said the case for action was urgent: “The UK’s defence industry must be made a priority. The Russian threat on our doorstep is not going to suddenly fade and the US now has other priorities. By improving our national security, we bolster our economic security as well, but those benefits must be felt more widely by our smaller firms.”
Critical Minerals: A Defence Procurement Flashpoint
The report highlights a looming squeeze on critical raw materials that will hit defence primes and their supply chains directly. By 2035, UK demand for critical minerals is forecast to rise sharply, with lithium demand projected to climb by more than 13,000% and copper by 1,928%, driven by electric vehicles, clean energy and advanced manufacturing — sectors that increasingly overlap with defence platforms, electrification of military vehicles, and next-generation electronic warfare and communications systems.
With domestic production unable to meet future needs, the BCC warns that secure access to these inputs is now a strategic question, not just a commercial one — particularly for defence manufacturers reliant on resilient sourcing for long programme lifecycles.
Steel Quotas And Global Overproduction
The defence and construction sectors are also bracing for new steel quotas and duties due in July 2026, set against the backdrop of global steel overproduction estimated at 640–680 million tonnes. The BCC warns of significant cost pressures on UK manufacturers, with knock-on implications for shipbuilding, armoured vehicles, infrastructure and major defence estate programmes.
Exposure To Global Disruption
The report notes that more than 75% of UK manufacturing exports begin with imports, while imports and exports together account for over 60% of UK GDP – leaving defence suppliers, like the wider economy, highly exposed to disruption from wars, tariffs, industrial subsidies and economic coercion.
Haviland added: “The wars in Ukraine and Iran have demonstrated how supply chains can be disrupted overnight. We now live in a world where trade interests may be weaponised, and where failing to secure key raw materials means failing to grow.”
A ‘Trade Bazooka’ And EU Alignment
To counter these risks, the BCC is calling for:
- A new ‘trade bazooka’ giving the UK the tools to deter economic coercion and respond decisively to hostile trade actions – a measure with direct relevance to safeguarding defence-critical imports.
- A robust UK response to the EU’s Made In Europe agenda, ensuring British defence and dual-use suppliers retain their place in pan-European supply chains and procurement programmes.
- The creation of an Economic Security Cabinet Committee, chaired by the Prime Minister, to coordinate policy on tariffs, critical imports and supply chain resilience across government – including the MoD and defence procurement bodies.
A Call To Match The Pace Of Competitors
The BCC argues that without smarter trade tools, deeper international partnerships and clearer leadership from the centre, the UK risks falling behind allies and competitors already moving faster to lock in defence-critical supply chains.
“This report sets out practical, achievable steps to protect the foundations of our economy – from steel and semiconductors to defence and clean energy,” Haviland said. “The message from business is clear: delay is a luxury the UK can’t afford. The Prime Minister must act now, match the pace of our competitors, and put economic security at the heart of our national growth strategy.”
For UK defence suppliers – particularly the SMEs that make up the bulk of the industrial base – the BCC’s intervention will add weight to growing calls for closer integration of trade policy, industrial strategy and defence procurement, ensuring resilience is built in from the raw material upwards.
Post written by: Vicky Maggiani
Vicky has worked in media for over 25 years and has a wealth of experience in editing and creating copy for a variety of sectors.
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