UK says it is not about to impose tough tariffs on Chinese EV imports

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UK trade secretary Jonathan Reynolds signalled he was not about to follow the EU’s lead in imposing tough tariffs on Chinese electric vehicle imports, while adding he was remaining “vigilant”.

Speaking at a meeting of G7 trade ministers in Italy, Reynolds said he had discussed with European colleagues the EU decision to impose tariffs on Chinese EVs as a way of countering what the bloc sees as unfair state subsidies.

But the new Labour minister indicated to colleagues that, while he was concerned, he was not planning imminently to launch a formal investigation into Chinese EV imports.

“I am not ruling anything out but, if you have a very much export-orientated industry, the decision you take [has to be] the right one for that sector,” Reynolds said.

UK government insiders note that the British car sector has not formally asked the Trade Remedies Authority to launch an investigation into Chinese EV imports, a move required for the UK to launch a probe.

One said: “The minister has made it clear that he will take the necessary steps to protect the UK car industry.” But they added that Reynolds was not yet at the point of ordering an investigation.

The UK exported about 700,000 cars in total in 2023, including models from Nissan, Jaguar Land Rover and Mini.

Just 7 per cent of these went to China, while 60 per cent went to the EU27, according to data from the Society of Motor Manufacturers and Traders, suggesting that the UK would be less exposed than other countries, such as Germany, to retaliation by Beijing.

However, the UK’s domestic EV market is dominated by brands that manufacture cars in China, including Tesla, BMW and MG — owned by China’s SAIC Motors.

Brussels announced in June that it would increase tariffs on Chinese-made EVs by up to 38 per cent after an anti-subsidy investigation. These will affect Chinese brands that export to Europe as well as western brands that make EVs in China.

Reynolds was speaking after meeting EU trade commissioner Valdis Dombrovskis. The minister said he was “looking forward to kindling a strong working relationship between the UK and EU built on good faith and mutual interest”.

Reynolds and Dombrovskis also discussed WTO reform and overcapacity in global markets.