UK keeps Chinese EV tariffs under review as it seeks EU industrial deal

Britain is keeping additional tariffs on Chinese-made electric vehicles under review as it seeks inclusion in the European Union’s proposed industrial-support arrangements, but has not announced a decision to increase duties.

Business Secretary Jonathan Reynolds has described the choice as finely balanced, with different parts of the automotive industry favouring different approaches, according to International Business Times UK. The discussions bring together two priorities for British manufacturers: maintaining links with European supply chains and attracting investment into domestic production.

The UK currently applies a standard 10% import duty to Chinese-made cars, without the additional China-specific duties imposed by the EU. Fleet News reported that the government had stressed that no new tariffs had been introduced and no final decision had been made.

EU manufacturing plans shape the debate

The EU introduced additional duties on electric vehicles imported from China in 2024 after concluding that manufacturers benefited from state subsidies. Those duties range from 7.8% to 35.3%, depending on the manufacturer, on top of the existing 10% import tariff.

Britain did not adopt the same measures. Its tariff review now comes alongside negotiations over the EU’s proposed Industrial Accelerator Act, including requirements intended to strengthen European manufacturing and reduce reliance on overseas supply chains.

The proposed arrangements could affect eligibility for subsidies, public procurement contracts and other industrial incentives. Britain is seeking inclusion because of the close integration of its automotive industry with manufacturers and suppliers in the EU.

The Society of Motor Manufacturers and Traders puts the annual value of the UK-EU automotive relationship at about €80 billion (£69 billion), according to International Business Times UK. The industry body has called for British-built vehicles, parts and materials to receive equivalent treatment to European products under the proposed rules.

The Financial Times has reported that Brussels asked Britain to raise tariffs on Chinese cars as part of efforts to address differences in trade policy. However, the supplied reporting also records that Reuters could not immediately verify that account. A tariff increase should therefore not be treated as an agreed condition of British participation.

Investment and exports complicate the choice

Reynolds has warned that ministers must consider the consequences for export markets and the possibility of retaliation. At the same time, Chinese automotive investment could help sustain manufacturing activity in Britain.

One example is Nissan’s exploration of a production arrangement with Chery at its Sunderland factory. International Business Times UK reported that the companies signed a non-binding memorandum of understanding in June to examine contract manufacturing, with production potentially beginning in Nissan’s 2027 financial year.

Under that proposal, Nissan would retain ownership of the plant and its employees. The arrangement remains subject to further discussions, rather than being a confirmed production commitment.

What a tariff change could mean for buyers

For UK buyers and businesses operating vehicle fleets, the immediate distinction is between a policy review and an enacted increase. No additional UK tariff has been announced.

If higher duties were introduced, they would increase the cost of importing affected vehicles. The eventual effect on purchase prices and leasing charges would depend partly on how much manufacturers and importers absorbed rather than passed on to customers.

Manufacturing location also matters. The EU’s additional duties apply to electric vehicles originating in China, not automatically to every car carrying a Chinese-owned badge.

Britain’s next decision will therefore involve more than matching a tariff rate: ministers are weighing European industrial access, export interests and investment in UK factories, while the policy remains under review.