UK Business Secretary Says Tariffs on Chinese EVs Under Review Amid EU Trade Talks

LIVERPOOL, England — Business Secretary Jonathan Reynolds is keeping tariffs on Chinese electric vehicles “under review” as the U.K. fights to be included in Brussels’ Buy European program.

The European Union has requested that the U.K. raise tariffs on Chinese EVs in order to advance talks to join the industrial program, amid fears Britain could provide a back door for Chinese vehicles to enter the single market, the Financial Times reported on Friday.

During an interview at The POLITICO Pub at Labour Party conference, Reynolds said he is keeping the issue of tariffs on Chinese EVs “under review, to be frank, more closely than lots of other issues” and that “different parts of our own sector want different things from” the government’s policy.

EU capitals are currently considering whether U.K. auto exports should qualify for preferential treatment under the Buy European program, as Brussels moves to protect its member economies from U.S. tariffs, China’s manufacturing might and an influx of cheap EVs subsidized by Beijing.

European Union lawmakers and officials are preparing new legislation to deny overseas manufacturers access to subsidies, tax incentives and public procurement deals. The bloc slapped double-digit tariffs on Chinese EVs in 2024.

But Reynolds said the U.K. government’s calculation on whether to impose tariffs differed from that of the EU.

“We are an export-orientated sector. So clearly, you shouldn’t do anything that risks your export markets, and you always have to take heed of retaliatory action if you put tariffs in place,” he said Sunday, calling the U.K.’s position on Chinese EVs “finely balanced.”

Cutting the U.K. out of Brussels’ new industrial program “wouldn’t be to the benefit of Europe,” Reynolds added.

The Made in Europe push is supposed to be “about greater resilience, greater autonomy for European industry in the face of very significant pressures from both the U.S. and China,” Reynolds added. “Now, if that is the objective, it stands to reason that the U.K., that’s the second-biggest economy in Europe, should be a part of that.”

Non-U.K. goods moving from Britain to the EU must pay applicable tariffs. But Reynolds has said he’s open to Chinese EV-makers setting up in Britain. Chinese firms have been eyeing Britain as a home base, with Nissan striking an MoU for Chinese EV giant Chery to use one of its Sunderland factory lines to make EVs in June.

Excluding U.K. supply chains from Made in Europe could cost €24 billion in economic activity on the EU side alone, the British SMMT automotive lobby warned earlier this month. Britain’s chemical and energy supply chains could also face restrictions under the rules.

The tussle between London and Brussels over the degree to which the U.K. should be included in European supply chains threatens to delay a major summit to wrap up talks on a range of trade issues later this year.

Reynolds also warned that “constitutional questions” regarding Britain’s EU relationship are causing “uncertainty” for business. The senior Cabinet minister said the U.K. should be focused on “how we can improve that trade relationship,” rather than whether Labour should push for Britain to rejoin the bloc.