China threatens retaliation if U.K. follows the EU on tariffs

LONDON — Beijing has threatened to retaliate if the U.K. raises tariffs on Chinese electric vehicles, aligning with the European Union.

Responding to POLITICO’s story that Britain was looking to act in “lockstep” with the bloc to counter China’s market dominance in electric cars, a spokesperson from the Chinese Ministry of Commerce said: “If the U.K. insists on imposing restrictions on Chinese electric vehicles, China will resolutely retaliate and safeguard the legitimate rights and interests of Chinese industries.”

The U.K. is currently working with its European partners to avoid a 10% electric vehicle tariff from the beginning of next year, when stricter rules of origin under the Brexit trade deal kick in.

The British government is also lobbying to be included in the EU’s Made in Europe policies, which give Brussels-made products preferential treatment in certain procurement projects.

U.K. Trade Minister Anas Sarwar told POLITICO on the sidelines of the German-British Business Summit at Mansion House last week that “the more that the U.K. and the EU work together and act in lockstep, the better it is for both the U.K. and the European Union.”

“The automotive sector and partnership remain strong, but do we have to grapple with the challenge that comes from rapid expansion in China? Of course we do,” he added.

China urged Britain to follow World Trade Organization rules and warned it against copying Brussels’ approach, arguing that tariffs on Chinese EVs would be discriminatory.

“China urges the U.K. to abide by WTO rules, think carefully, and not follow the European Union,” said the Chinese Ministry of Commerce spokesperson. “China will closely monitor the U.K.’s developments.”