UK minister signals alignment with EU tariffs on Chinese EVs

UK Trade Minister Anas Sarwar has indicated that Britain is prepared to align with European Union tariffs on Chinese electric vehicle (EV) imports. Speaking at the German-British Business Summit at Mansion House, Sarwar emphasized that London and Brussels should "work together and act in lockstep" to address challenges posed by China’s rapid expansion in the automotive sector.

Strategic Alignment with Brussels

The comments represent the clearest signal yet that the UK government may adopt EU-style tariffs to secure access to Brussels’ "Made in Europe" industrial program. The EU Industrial Accelerator Act, which grants preferential treatment to EU-made products in public procurement, could disadvantage British manufacturers if the UK is excluded from these policies.

Sarwar acknowledged the shared challenges faced by the UK and its European neighbors. "We’ve got muscular protectionism on one side, we’ve got rapid expansionism on another side, and governments across the world of similar economy sizes to ourselves in Germany are having to work through what does that mean for our supply chains," he said. He added that while the UK supports its own "Made in U.K." campaign, it is crucial to avoid "unintended consequences by taking the reaction too far and damaging our businesses in the process."

Diverging Views Within the UK Government

The push for alignment contrasts with earlier statements from UK Business Secretary Jonathan Reynolds, who described the UK’s position on Chinese EVs as "finely balanced." Reynolds noted that the UK’s automotive sector is export-oriented, warning against actions that might risk export markets or provoke retaliatory measures. "We are an export-orientated sector. So clearly, you shouldn’t do anything that risks your export markets, and you always have to take heed of retaliatory action if you put tariffs in place," he said.

The UK is currently working with the European Commission to avoid a 10% EV tariff starting next year, when stricter rules of origin under the Brexit trade deal take effect. Additionally, London is lobbying for British businesses to be included in EU industrial policies.

Context of EU Tariffs

The EU imposed additional countervailing duties on Chinese battery electric vehicles in October 2024 following an investigation into state subsidies. These duties vary by manufacturer and can reach 35% on top of the EU’s standard 10% car import tariff. The UK has not yet introduced equivalent additional tariffs specifically targeting Chinese EVs.

Why it matters

The potential alignment of UK and EU trade policies on Chinese EVs could reshape global automotive supply chains. For manufacturers, access to European industrial support and public procurement depends on navigating these evolving trade barriers. The debate highlights the tension between protecting domestic industries through tariffs and maintaining open export markets, a dilemma faced by economies of similar size to the UK and Germany.

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Sources

• politico.eu: UK is prepared to align with EU tariffs on Chinese EVs, minister indicates – POLITICO
• businessupturn.com: UK weighs alignment with EU tariffs on Chinese EVs, raising stakes for global auto trade · Business Upturn

This article was drafted with AI assistance and checked against the sources above. Company claims are reported as claims. Cover image is AI-generated.