UK weighs electric vehicle tariffs for EU industry deal
The UK has left open the possibility of matching European Union tariffs on Chinese-made electric vehicles to join the bloc’s proposed Made in Europe scheme…
The UK wants a place in the European Union’s proposed Made in Europe package, which would give preferential treatment to products made in the bloc. On Friday, Downing Street left open the possibility that Britain could align with EU tariffs on Chinese-made electric vehicles, a condition in a Franco-German proposal that has drawn a warning from Beijing.
The choice could shape access to European supply chains for British carmakers while affecting the price and availability of Chinese models. The UK government said it was too early to set out the terms of any agreement.
Downing Street said it would “welcome the objective to have the UK included in the Industrial Accelerator Act” after France dropped its opposition to British participation. The proposed rules aim to curb subsidised Chinese imports by favouring products made in the EU.
A Franco-German proposal issued on Thursday night says Britain would need to align dynamically with EU trade-defence measures to join. The Chinese embassy in London said it was “firmly opposed to any discriminatory practice involving tariff hikes or restrictive measures on Chinese products”.
“We have expressed serious concern to the UK side regarding the reports in question,” the embassy said, adding that “trade protectionism runs counter to WTO rules and market principles”.
Tariff choice carries costs for carmakers and buyers
A No 10 spokesperson said it was “premature to speculate” on the terms of a deal, adding that “there was still a European process to run”. The spokesperson said the UK had its own trade policy and kept all tariffs under review, while working with the British automotive sector to ensure its interests were reflected.
Business Secretary Jonathan Reynolds said earlier this week that he would not be coerced into aligning with EU policy. But the government has pressed to join the package, fearing billions of pounds of trade in the car industry could be lost if British firms are shut out of European supply chains.
The stakes reach beyond trade negotiations. Tariffs could shield UK-based manufacturers from cut-price Chinese models, but they could also raise prices for consumers and harm British manufacturers seeking to sell vehicles in China if tensions escalate. About 80% of UK-made cars are exported; more than half go to the EU and 6% to China.
Chinese brands have gained ground in the UK market. The source report said BYD sales rose 78% year on year in September, Chery sales increased 660%, and Changan’s market share grew by more than 3,000%.
Trade minister Anas Sarwar hinted on Thursday that Britain was minded to align on tariffs. He told Politico the UK and EU must “work together and act in lockstep” to tackle China’s dominance in the automotive sector.
European lawmakers are expected to finalise the Industrial Accelerator Act, also known as Made in Europe legislation, by the end of the year or early 2027. Members of the European Parliament have already tabled 5,100 amendments, including one that would include the UK.
The Franco-German proposal would allow European partners that were part of the EU single market as of 1 January 2020, including the UK and Norway, to opt in, provided they accepted the required alignment on investment conditions and trade-defence measures.
Ola Källenius, Mercedes-Benz chief executive and president of the European car trade body ACEA, warned earlier this week that excluding the UK would be a “deliberate choice” by EU leaders to “hurt” the car industry across the bloc.
Source: theguardian.com
