The European Union has warned the United Kingdom that London will likely have to tighten trade sanctions on Chinese goods if the country wants to avoid restrictions on British products in the EU market.
The Financial Times reports, citing European and British officials.
In Brussels, one option for resolving the issue is seen as the UK joining the EU customs union. Such a move would reduce the risk of EU tariffs being circumvented via the British market and would simplify trade.
At the same time, the British government does not plan to join the EU customs union or the single market. After Brexit, London wants to retain its own trade policy, but the growing divergence in tariffs is increasingly creating tension in relations with Brussels.
One of the key issues concerns Chinese electric vehicles. The EU introduced additional duties on their imports in 2024, while the UK did not.
According to the FT, Chinese carmakers have already captured about 16% of the UK new-car market this year.
Europe’s automotive industry fears that the UK could become a channel for Chinese cars to enter the EU market. Massimiliano Messina, head of Nissan’s European division, said the UK’s tariff policy needs adjusting because of these risks.
A similar situation is developing in the chemicals industry. Cheap Chinese imports have already prompted the EU to introduce a range of anti-dumping measures, and new restrictions could appear in the coming months.
At the same time, the UK itself is seeking to have the country’s automotive, chemicals and energy sectors included in the European “Made in Europe” policy. London fears British companies could lose access to parts of European subsidy programmes and public procurement.
Separate tensions between London and Brussels have arisen over trade in titanium dioxide. This month, the EU announced it would monitor exports of the substance from the UK after British regulators allowed a Chinese manufacturer to buy a plant in Teesside.
The UK government says it is ready to deepen co-operation with the EU, but at the same time wants to avoid measures that could harm the British economy. London also stresses that it will decide on trade restrictions independently, based on the UK’s economic interests.
- In 2024, the European Union raised tariffs on electric vehicles from China by 45%. The decision heightened trade tensions between the world’s leading exporting nations.