In order to qualify for the ‘Made in Europe’ procurement model under the EU, the British government is facing political pressure to align itself with Brussels regarding tariffs on imported Chinese cars. This has become a key priority for Prime Minister Barnett before the next UK-EU summit in the month ahead.
On October 20th, local time, at a meeting of the cross-party Business Committee in Parliament, UK Secretary of State for Business Jonathan Reynolds was asked whether the so-called ‘common trade defense measures’ against China would be discussed at the Brussels summit next month.
Rene said: "Of course, I am willing to discuss it. I have also been discussing with European colleagues the series of common issues we face and how to address them."
When directly asked whether the UK was required to impose tariffs on Chinese electric vehicles as a condition for gaining a credible partner status under the “Made in Europe” policy, Reynolds said he was closely following the UK’s position.
I hope to cooperate with European partners because we face the same pressure," he continued. "If we decide on trade defense measures, it's only because I believe that this benefits the interests of the United Kingdom."
Reynolds also added that making progress in joining the 'European manufacturing' is a 'very important priority' for every British government department, as failing to achieve this will impact multiple policy areas.
France and Germany are in talks regarding the EU's automotive policy. A draft document disclosed by the British Financial Times shows that one important aspect is allowing British automakers to be included in the EU's "European Manufacturing" policy, enabling them to qualify for public procurement and subsidy policies aimed at European businesses. However, this is contingent upon compliance with EU trade defense measures, including tariff policies targeting Chinese electric vehicles.
The British government has not made any commitments regarding this matter. Reynolds stated that the details of the French-German agreement are not sufficient to determine exactly what demands have been placed on the UK.
"We must cooperate with like-minded countries to address similar issues, but I also want to point out that the overall interests of the EU in its automotive industry may sometimes differ slightly from those of the UK," he said.
Maintaining consistency on trade with China remains an obstacle for the British government.
The Financial Times pointed out that the UK has so far not imposed high tariffs on Chinese electric vehicles, unlike the EU. On the one hand, the UK wants to protect its own car export companies and avoid triggering countermeasures from China. On the other hand, the UK also hopes to attract Chinese car manufacturers to invest in factories in the UK.
Currently, the UK imposes a regular import tariff of 10% on electric vehicles from China. In addition, the EU has introduced a so-called countervailing duty on Chinese electric vehicles starting in 2024. Combined with the original tariffs, the maximum tax rate is approximately 45%. Therefore, the share of Chinese brand cars in the UK market is significantly higher than that in the EU.
Currently, France and Germany are trying to link Britain's participation in the EU's new industrial support policies with whether Britain will adopt stricter trade measures towards China, leaving London with a new choice.
Last week, during his visit to India, Reynolds said that the UK will not change its tariff policies towards Chinese cars simply because of pressure from the EU.
He emphasized that the British automotive industry is export-oriented. When considering whether to impose additional tariffs, the government must fully evaluate the impact on domestic enterprises. Whether Britain should take trade defense measures should be determined by the interests of its economy and industry, not because other countries have made requests.
He also stated that the British government conducted a thorough study on Chinese electric vehicle tariffs in 2024, and has continued to evaluate the situation, but has not decided to take the same measures as the EU.
