UK Treasury Unleashes £20bn Lifeline for British Businesses as Trump’s Tariffs Stir Global Trade Tensions

As British exporters brace for a fresh wave of U.S.-imposed tariffs, the UK Government has responded with a significant financial countermeasure: UK Export Finance (UKEF) has been granted authority to inject up to £20 billion in additional financing to support domestic businesses selling goods and services overseas. This move pushes UKEF’s total lending capacity to £80 billion—a historic high.

Of that total, £10 billion has been earmarked specifically for firms most acutely affected by the new U.S. trade penalties, offering a crucial buffer during what many see as a pivotal moment for UK exporters.

Small and medium-sized enterprises (SMEs), often the most vulnerable during periods of trade volatility, have not been overlooked. The Treasury has doubled the loan cap under the British Business Bank’s Growth Guarantee Scheme, raising the maximum claimable amount to £2 million per business. This tweak could provide rapid-access liquidity to smaller firms under pressure.

UKEF, for its part, will also introduce more flexible applications of its Export Development Guarantee, helping de-risk financing through partial loan guarantees—a move designed to spur investment and maintain global competitiveness.

In tandem, the British Business Bank will expand the Growth Guarantee Scheme by £500 million, further strengthening its capacity to support SME financing. Under this scheme, lenders receive a 70% government-backed guarantee against eligible loans, encouraging institutions to keep credit flowing.

Business and Trade Secretary Jonathan Reynolds called the package of measures “a crucial shot in the arm to exporters and small firms looking to trade around the world”.

The new U.S. tariff regime—imposed by President Donald Trump—includes a blanket 10% tariff on all UK imports, with steeper rates of 25% applied to strategic sectors like steel, aluminium, and automotive products. The implications are far-reaching.

According to government data, the USA accounted for 21.7% of all UK exports in the four quarters ending Q3 2024, making it Britain’s largest trade partner during that period. The sectors under pressure are those aligned with the green economy: electric vehicles, power systems, chemicals, and capital goods critical to clean-tech supply chains.

UK industry stalwarts like Rolls-Royce—with interests spanning aerospace, automotive, and emerging sectors like small nuclear and advanced power systems—and Alicat Workboats have historically benefited from UKEF-backed initiatives. The government hopes this new tranche of funding will help similar firms weather the tariff storm and maintain growth momentum.

Looking ahead, UKEF estimates the UK could generate £170 billion in green export sales by 2030, representing approximately 9% of the global green trade market. To help turn that projection into reality, UKEF has pledged £10 billion in growth finance for domestic green businesses and a matching £10 billion in green investment mobilised across low- and middle-income countries by the end of the decade.