The European Union is urging the UK to raise tariffs on China-made cars that would bring its customs policy closer to the bloc’s and remove some barriers to including British products in the “made in Europe” policy, the Financial Times reported on Friday, citing sources with knowledge of the matter.
At the end of 2024, the European Commission received enough support from the EU member states to impose tariffs ranging from 7.8% to 35.3% on imports of electric vehicles from China due to unfair subsidizing.
The UK, which left the EU in the Brexit withdrawal, did not follow the EU’s move with tariffs. This has boosted the market share of Chinese cars in the UK’s total new vehicle sales to more than 16% this year.
The EU fears that the UK could become a backdoor for Chinese products if it doesn’t erect trade barriers for China’s goods. But the UK wants to be included, at least for some industries, including energy and chemicals, in the so-called “made in Europe” policy to retain access to the EU market.
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The UK has ruled out rejoining the EU’s single market or customs union, but the government of Andy Burnham now faces dilemmas on how to navigate between trade with China and trade and supply chain links in strategic sectors with the EU.
Executives from the auto industry have questioned how long Britain can continue to keep so divergent trade policies with the EU if it really wants its products to be considered “European” or “made in Europe”.
Massimiliano Messina, chair for Nissan’s Africa, Middle East, India, Europe and Oceania (AMIEO) region, warned earlier this month that the UK could become a corridor of China-made electric vehicles in the European Union.
“The whole UK has to adjust some of [the country’s] tariff policy,” Messina said, as carried by FT.
By Michael Kern for Oilprice.com
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