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 ۴۵% it has levied on Chinese cars since October ۲۰۲۴.
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 ۱۳ months between the launch of the investigation into state subsidies in production and transport lines and finally imposing tariffs in October ۲۰۲۴.
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 than £۱bn (€۱.۱۸bn) 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 the 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 the EU’s Made in Europe policy.
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The EU views Chinese manufacturers based in Europe, employing EU staff, as less of a threat to its indigenous industries. Chinese brands made by BYD in Hungary, for example, will not be subject to import duties.
Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, said any consideration of tariffs needed to be based on “robust evidence” and maintain a rules-based open and competitive market.
“The immediate priority is a pragmatic agreement recognising the UK as a trusted ‘Made in Europe’ partner as the exclusion of UK-built vehicles would severely damage both our highly integrated industries, jeopardising the €۸۰bn trading relationship,” he said.
Brands such as BYD, Leapmotor and Jaecoo more than tripled their share of the UK new car market in ۲۰۲۶, reaching ۱۲% of sales, according to the latest industry figures.
BYD has almost doubled its share of the UK market in September ۲۰۲۶ compared with September ۲۰۲۵, with ۵.۷۵% of the market, according to figures from SMMTraders released on Monday.
In the year to date, BYD’s share has gone up from ۲.۲% to ۳.۹۳% with ۶۸,۰۰۰ BYD cars sold up to the end of September, closing in on BMW, which shifted ۹۱,۰۰۰.
Jaecoo’s share has rocketed, increasing by ۲۲۳%, with ۵۸,۰۰۰ new cars sold in the year so far, while Leapmotor sales have soared by a phenomenal ۷۶۵% – up from about ۱,۵۰۰ cars sold in ۲۰۲۵ to more than ۱۳,۰۰۰ in the year so far.
A UK government spokesperson said: “We have not put tariffs on Chinese EVs. We continue to engage closely with industry so that our approach reflects the sector’s and UK’s national interests.”
