The Chancellor Rachel Reeves criticised the campaign as "inward looking" and confirmed that the government would not be supporting it.
Horsham's MP responded by saying he would "always stand by our local businesses" and pledged to continue pushing the campaign forward.
John Milne MP said: "I am disappointed that the government has refused to back the Liberal Democrat' Buy British' campaign in the face of real hardship. Businesses in Horsham and surrounding areas are deeply concerned for their future in the face of aggressive US tariffs and a hammering government jobs tax.
"Now more than ever, it is vital to rally around our local businesses to ensure they survive. So please, if you can buy locally and show your support for the brilliant businesses in the Horsham constituency.
"I have launched a survey to hear from local businesses about these changes. Please share your views here so I can push them forward in Parliament.
"People across our community want to back British, support local jobs, and keep our economy strong. I urge the government to reconsider and join us in fighting for our brilliant local economy."