Key facts
- The EU has asked the UK to raise tariffs on Chinese electric vehicles.
- Britain is seeking inclusion in the EU's 'Made in Europe' industrial program.
- Business Secretary Jonathan Reynolds stated the UK's position on Chinese EV tariffs is 'finely balanced'.
- Nissan is exploring a contract manufacturing arrangement with Chinese carmaker Chery at its Sunderland plant.
- The EU imposed double-digit tariffs on Chinese EVs in 2024.
Britain is navigating a complex trade-off between aligning with European Union industrial policy and maintaining its own trade autonomy, particularly concerning tariffs on Chinese electric vehicles (EVs).
EU officials have reportedly urged the UK to raise its tariffs on Chinese EVs to ensure British manufacturers are not disadvantaged under the bloc's proposed "Made in Europe" rules. This initiative aims to bolster European supply chains and protect against foreign subsidies, especially from China. The EU already imposed tariffs ranging from 7.8% to 35.3% on Chinese EVs in 2024, in addition to a 10% import tariff.
Business Secretary Jonathan Reynolds described the UK's stance as "finely balanced," acknowledging that different segments of the domestic automotive sector have varying policy preferences. He emphasized the need to consider the impact on UK export markets and the potential for retaliatory measures if tariffs are increased. Reynolds also highlighted that excluding the UK from the "Made in Europe" program could negatively affect economic activity and jobs across the EU, given the close integration of supply chains worth an estimated €80 billion annually.
Simultaneously, the UK is actively seeking foreign investment to bolster its own automotive production. Nissan has signed a preliminary agreement with Chinese EV giant Chery to explore contract manufacturing at its Sunderland plant. This potential arrangement adds another layer to the government's decision-making process as it weighs closer alignment with EU trade policy against fostering domestic manufacturing capabilities.