Key facts
- UK open to imposing tariffs on Chinese EVs to join EU's 'Made in Europe' scheme.
- China warns tariffs would be discriminatory and violate WTO rules.
- UK fears exclusion from EU supply chains if not aligned with trade measures.
- BYD sales up 78%, Chery up 660%, Changan up over 3,000% in market share year-on-year in September.
The UK government is considering imposing tariffs on Chinese electric vehicles as part of the EU's 'Made in Europe' package, a move that has drawn criticism from Beijing. Downing Street indicated it would welcome inclusion in the scheme after France lifted its opposition. The 'Made in Europe' rules aim to counter subsidised Chinese imports by favouring EU-made products. However, the UK and Norway are concerned about potential disadvantages if excluded. A Franco-German proposal suggests that joining would require dynamic alignment with EU trade defence measures, including tariffs on Chinese EVs.
China's embassy in London stated its firm opposition to any discriminatory practices and tariff hikes, arguing that trade protectionism contradicts WTO rules. Despite business secretary Jonathan Reynolds' earlier stance against coercion, the UK government is keen to join the package to protect its automotive industry from being locked out of EU supply chains. A No 10 spokesperson described discussions as premature but affirmed the UK's independent trade policy and review of tariffs, working with the British automotive sector.
Chinese EV sales have seen significant growth, with BYD sales up 78%, Chery up 660%, and Changan up over 3,000% year-on-year in September. EU lawmakers are expected to finalise the Industrial Accelerator Act soon, with amendments already tabled to include the UK. The head of the European car trade body warned that excluding the UK would deliberately harm the bloc's automotive industry. The proposed terms for European partners include accepting dynamic alignment with EU conditions on third-country investments and trade defence measures. While tariffs could protect UK manufacturers, they might also increase consumer prices and risk retaliation from China, given that about 80% of UK-made cars are exported, with a significant portion going to the EU and China.