Key facts
- The EU has urged the UK to impose tariffs on Chinese electric vehicles.
- EU officials warned that the UK must put tariffs on Chinese vehicles or face protectionist 'made in Europe' barriers on British exports.
- Business Secretary Jonathan Reynolds described the UK's position on Chinese EV tariffs as 'finely balanced'.
- Nissan is in talks with Chinese carmaker Chery to explore contract manufacturing at its Sunderland plant.
- The EU imposed tariffs of up to 45% on Chinese EVs in 2024.
Britain's automotive industry is facing a critical decision regarding tariffs on Chinese electric vehicles (EVs) as the European Union pressures the UK to align its trade policy. EU officials have reportedly warned that if the UK does not impose import taxes on Chinese vehicles, Brussels could implement protectionist measures against British exports under its 'Made in Europe' initiative.
The UK currently stands as an outlier, not imposing import taxes on Chinese vehicles, unlike the US which has largely excluded them and the EU which levies duties of up to 45%. Business Secretary Jonathan Reynolds has described the UK's position as 'finely balanced,' acknowledging the potential for retaliatory measures from China if tariffs are increased, which could cost UK manufacturers sales. He also noted that tariffs would raise prices for British consumers and could deter investment from Chinese brands.
Simultaneously, the UK is seeking foreign investment to bolster its domestic car industry. Nissan is reportedly in talks with Chinese EV maker Chery to explore contract manufacturing at its Sunderland plant. Experts suggest this presents a 'difficult trade-off' for the UK, as Chinese investment could be a lifeline, while access to the European market remains crucial for smaller manufacturers.
Industry figures indicate that Chinese brands have significantly increased their market share in the UK, contributing to more affordable car prices. However, the Society of Motor Manufacturers and Traders (SMMT) has warned that exclusion from the EU's 'Made in Europe' rules, which restrict subsidies and public procurement to vehicles built within the EU, poses an existential threat to British car production. The EU represents 58% of UK car exports, compared to about 4% for China.