A Chery Jetour T1 on display at the Beijing Auto Show in April 2026. Credit: CnEVPost.
- The EU links treatment of British goods to closer trade policy alignment and suggests London join its customs union.
- The UK seeks to preserve its place in European supply chains while attracting Chinese investment in domestic car plants.
The European Union has urged Britain to raise tariffs on Chinese EV imports and align its trade policy more closely with the bloc, warning that key British exports could otherwise face “made in Europe” barriers.
Brussels told London that joining the EU customs union would be the best way to resolve the issue, the Financial Times reported on September 25, citing people familiar with the matter. The British government continues to rule out that option.
The demand presents Britain with a difficult trade-off: higher tariffs could help preserve British companies’ place in European supply chains but may also raise car prices for consumers.
The EU’s “made in Europe” policy aims to favor manufacturers within the bloc through subsidies and public procurement to counter competition from China.
Britain is seeking to have its automotive, chemical and energy supply chains included in the framework, amid concerns that domestic companies could be excluded from major EU subsidy programs.
An EU official told the Financial Times that a customs union would resolve most of these issues and ease concerns that Chinese goods could bypass EU tariffs by entering through Britain.
Britain did not follow the EU in imposing additional tariffs on Chinese EVs in 2024. Chinese manufacturers have captured a combined 16% share of the UK’s new car market this year, according to the report.
The EU imposed definitive countervailing duties on battery electric vehicles (BEVs) imported from China in October 2024 for a period of 5 years.
The additional duties were set at between 7.8% and 35.3%, bringing the maximum total tariff to 45.3% when added to the existing 10% standard import duty.
Nissan’s European boss Massimiliano Messina warned this month that Britain risked becoming a “corridor” into the EU for Chinese EVs and called for adjustments to some tariff policies, the report noted.
Higher tariffs could also complicate Britain’s efforts to attract Chinese automotive investment. The UK is seeking Chinese capital, including efforts to bring production by Chery (HKEX: 9973) to Nissan’s Sunderland plant.
The British government has said it will maintain its red lines against joining the EU customs union or single market, limiting the scope for narrowing trade policy differences.
The UK department responsible for trade told the Financial Times that trade measures would be determined independently based on the country’s economic and industrial interests, while stressing the need to protect trade flows between Britain and the EU.
The department said Britain wanted to deepen cooperation with the EU while avoiding collateral damage from their shared ambition to tackle unfair trading practices.
The European Commission prepares countervailing duties on Chinese plug-in hybrids, with an investigation already under way, according to Handelsblatt.
