The UK is considering tariffs on Chinese electronics. Access to the EU program is at stake.
The British government is working on a set of potential tariffs for cars imported from China, according to The Times on October 4. The new rates are intended to bring the UK in line with EU policy, but no decision has been made yet.
Minister for Business Jonathan Reynolds is responsible for preparing the proposal. The concern is that Chinese manufacturers are selling subsidized cars in the UK at dumping prices. Their share of new car registrations in the UK has already reached 16%, including all types of propulsion, not just electric models.
Since the end of October 2024, the European Union has imposed additional anti-subsidy tariffs on electric passenger cars manufactured in China. These range from 7.8% to 35.3% depending on the manufacturer, on top of the standard 10% import duty. London has not yet introduced a similar mechanism.
Tariffs may be the price for EU’s trusted partner status
In the background is the Industrial Accelerator Act being prepared by the European Union. The regulation aims to promote goods produced in Europe when granting funding, awarding public contracts, and formulating industrial policy. It will introduce requirements regarding local production involvement as well as labeling such as “Made in Europe” and “Made in EU.”
For the United Kingdom, the issue is more serious than just the sale of Chinese electric vehicles. The country left the Union, but its factories and suppliers remain closely tied to Europe’s automotive industry. According to an analysis by Oxford Economics published by the SMMT, British automotive production supports economic activity in the EU worth 24 billion euros, around 250,000 jobs, and 1.6 billion euros in tax revenue annually.
The British government is therefore pushing to have the country treated as a partner under the Industrial Accelerator Act. Prime Minister Andy Burnham announced in September that he would seek “trusted partner” status, which would allow British manufacturers to retain access to the EU market on terms similar to those of EU companies.
According to the Financial Times, Brussels is however pressing London to raise tariffs on Chinese electric cars first. If these two issues are indeed linked in the negotiations, protecting British factories from “Made in Europe” requirements could mean more expensive imports of cars from China. It is still unclear what rates the government will propose or when any such regulations might come into effect.
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