UK Weighs Measures to Counter EU’s Tariffs on Chinese Electric Vehicles
According to a report by Bloomberg, the British government is closely “monitoring” the impact of electric vehicle imports after the European Union imposed temporary tariffs on electric vehicles imported from China. The government is considering potential actions in response.
On July 16, at the G7 Ministerial Meeting in Italy, the UK Department for Business, Energy & Industrial Strategy, following a meeting with EU Trade Commissioner Valdis Dombrovskis, said that UK Business Secretary Jonathan Reynolds is “vigilant” on the issue and is discussing next steps with industry representatives.
A statement from the British government summarizing the meeting noted that any solution must consider the UK automotive industry’s exports and be adjusted according to the UK economy. The current challenge for the new UK government is whether to follow the EU and the United States in increasing tariffs on electric vehicles imported from China. The United States has announced a 102.5% tariff on electric vehicles imported from China, although there are currently few electric vehicles exported from China to the United States. Canada is also considering new tariffs.
The EU’s imposition of tariffs on China coincides with Chinese manufacturers like SAIC Motor (which produces MG cars) and BYD actively expanding into the European market. The EU has initiated an anti-subsidy investigation against Chinese electric vehicle manufacturers, alleging they receive unfair subsidies.
If the EU’s tariffs are ultimately implemented, China may take retaliatory measures. However, both sides have expressed willingness to negotiate before the full tariff takes effect in November.
The new UK Labour government has pledged to phase out the sale of new internal combustion engine cars from 2030, and the current challenge is to balance protecting the UK’s domestic car industry (which produced over a million cars last year) with ensuring consumers can affordably purchase electric vehicles.
For MG cars, the UK is the most important European market. Last year, the MG4 electric hatchback was the second best-selling electric vehicle in the UK market, behind the Tesla Model Y.