The UK is considering whether to impose tariffs on Chinese car imports to align itself with the EU and strengthen its case to be included in new legislation designed to protect the European manufacturing sectors including autos and chemicals. It is understood the EU has raised the question of tariffs with the UK as part of the discussions on the upcoming “Made in Europe” legislation, known as the Industrial Accelerator Act. The UK is an outlier in choosing not to put import taxes on Chinese vehicles, even as the US has shut them out almost entirely.
Brussels believes the UK would have to introduce tariffs to create a level playing field to qualify for inclusion in the scheme and match the tariffs of up to 45% it has levied on Chinese cars since October 2024. Imposing tariffs on Chinese cars would probably prompt a hostile response from Beijing and test Andy Burnham’s desire for a reset in the post-Brexit relationship with the EU. It would also involve a lengthy World Trade Organization process.
It took the EU 13 months between the launch of the investigation into state subsidies in production and transport lines and finally imposing tariffs in October 2024. The UK has been lobbying hard to be included in the upcoming legislation, which will require manufacturers to procure components from the continent to protect against the growing presence of China in supply chains, particularly the auto and chemicals sector. If tariffs were to be imposed, the move would be a break with the previous government policy.
Keir Starmer’s government positioned itself as a strong ally to China, viewing it as an important source of economic growth rather than a risk to British manufacturing. The UK has consistently argued it does not need trade barriers in the way Brussels does because it does not have the huge trade deficit – now running at more £1bn (€1.18bn) a day – that the EU is struggling to contain. A report in the Times quoted a senior government source saying that the risk assessment had since changed given the danger Made in Europe posed to UK car industry, whose biggest market for finished products and parts is the EU.
China’s increasing trade with the EU – not only in finished products such as cars but also in components – is causing deep concern about cannibalisation of native industries in European capitals. The EU trade commissioner, Maroš Šefčovič, is visiting Beijing this Wednesday for talks over a reset in trade relations. Experts said last week the UK car industry faced a “difficult trade-off”, with Chinese investment a potential “lifeline” for carmakers, while access to Europe would also be “crucial” for smaller manufacturers.
But Nissan’s chair in Europe, Massimiliano Messina, has recently said that “Europe cannot have a Trojan horse where the Chinese are going to flood the market” through imports via Great Britain. Nissan is in talks with the Chinese company Chery to manufacture cars in its Sunderland plant, but this would still align with EU’s Made in Europe policy. The EU views Chinese manufacturers based in Europe, employing EU staff, as less of a threat to its indigenous industries.
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