EU asks UK to increase tariffs on Chinese cars to avoid trade barriers

The EU demands that the UK increase tariffs on Chinese cars. (AFP file photo)

[Compiled by Wei Guojin/Taipei Report] The Financial Times reported that two people familiar with the matter revealed that the EU told British Prime Minister Andy Burnham that it must increase tariffs on Chinese automobiles and closely align with EU trade policies to avoid "made in Europe" barriers for key products exported to the EU.

The EU has also told London that joining the EU's customs union would be the best way to get the same treatment for its products. An EU official said a customs union would resolve most issues related to "Made in Europe" regulations and concerns about tariff gaps.

He pointed out that "a customs union will solve most of the 'Made in Europe' problems, as well as the tariff gap issue that may lead China to avoid our tariffs by going through the UK."

Bonan recently stressed that he would strive to see the UK as a "reliable partner" in the EU's proposed "Made in EU" regulations. He warned that if the UK was excluded, it would have an impact on the automotive industry.

The "Made in Europe" policy aims to reduce dependence on Chinese components by giving priority to purchasing European products. This policy has worried the British auto industry because British-made components have entered the EU supply chain, and the UK also sells cars to EU member states.

When European Commission Executive Ursula von der Leyen delivered the "State of the Union Address" to the European Parliament this month, she stated that the EU would use all means to reduce the "unsustainable" trade deficit with China.

The German think tank "Mercator China Institute" (MERICS) recently released an analysis report saying that China's customs data in July showed that the EU's trade deficit with China has further expanded from about 1 billion euros (NT$36.24 billion) per day last year to 1.18 billion euros (NT$42.76 billion) per day.

MERICS said, "The trade imbalance has now exceeded the ratio of 3:1, that is, for every 1 euro of exports to China, the EU imported 3.1 euros of products from China in July. This deficit is equivalent to 1.18 billion euros per day." The agency added that "the problem is no longer simply that the EU purchases more Chinese products, but that China purchases fewer European products while selling more products to Europe."