Sir Keir Starmer is attempting to secure an EU reset – Kirsty Wigglesworth/AFP via Getty Images
British factories risk being cut out of EU supply chains under Brussels’ “made in Europe” plan, the British Chambers of Commerce (BCC) has warned.
The European Union is pushing for new quotas on the use of domestic components in products such as cars, which would end the bloc’s traditional reliance on China and the US.
However, the new legislation risks damaging British business caught up in the “chaos”, the BCC warned.
William Bain, the head of trade policy at the BCC, said the most extreme version of the bloc’s “made in Europe” policy could trigger “a chilling effect on cross-border trade and cause chaos for EU-based producers reliant on UK parts and components”.
The lobby group called on the Government to urgently negotiate an exemption for British companies.
Peter Kyle, the Business Secretary, urged officials in Brussels to classify British companies as European under the new rules.
Mr Bain emphasised that the stakes were very high.
He said: “The UK Government is very much alive to this danger and dialogue is ongoing but this issue is not yet on the radar of enough firms and its seriousness cannot be underestimated.”
Measures being considered by Brussels include content rules that will require up to 70pc of the components in the goods firms make to be of EU origin.
The bloc is also weighing up new rules on sustainability, capping foreign direct investment and red tape governing procurement.
The UK’s position as a third country leaves British companies at risk of being squeezed out of supply chains, with car manufacturing particularly exposed. Brussels has already begun to set out legislation to increase subsidies for EU-made vehicles.
Patrick Keating, the head of government affairs at Honda Motor Europe, said the car manufacturer was “concerned about the strong emphasis on ‘made in the EU’ requirements in the Industrial Accelerator Act”.
He added that the bloc’s proposed legislation risked “limiting global supply chain resilience and reducing consumer choice during the transition to sustainable mobility”.
Brussels’s “made in Europe” agenda also threatens to derail Sir Keir Starmer’s attempts to secure an EU reset.
In May 2025, the Prime Minister announced his plans to bring the UK closer to the EU. Britain has since signed new agreements on animal and plant health, electricity and carbon pricing.
Mr Kyle visited Brussels last week to unveil a new agreement with the European Commission to work more closely on competition law.
He said the UK was not asking for “free access” to the EU’s markets by requesting to be considered part of the bloc’s “made in Europe” scheme.