Will the UK impose import tariffs on Chinese-made EVs post-Brexit?
The UK’s decision to align with the EU on automotive regulations after Brexit raises concerns about the possibility of imposing import tariffs on Chinese-made electric vehicles (EVs). The European bloc had previously implemented such tariffs to safeguard its industry against cheap imports from China. However, unlike the EU, the UK does not have a significant domestic manufacturing industry to protect. As a result, the threat of imposing tariffs on Chinese EVs in the UK seems unlikely.
The absence of a mainstream domestic manufacturing industry in the UK diminishes the need for protective measures against Chinese imports. While the EU’s aim was to shield its industry from competition with Chinese EVs, the UK does not face the same level of risk. Consequently, the imposition of import tariffs on Chinese-made EVs in the UK would not serve the purpose of protecting domestic manufacturers, as there are few to safeguard.
It is worth noting that the UK’s new business secretary, Jonathan Reynolds, has explicitly stated that the government has no plans to impose import tariffs on Chinese EVs. This stance indicates that the UK intends to maintain an open and competitive market for electric vehicles, encouraging innovation and consumer choice.
However, if the UK were to follow the EU’s lead and impose tariffs on Chinese EVs, it would inevitably face retaliatory measures from Beijing. China has the ability to target specific segments of the UK market, and one area that Chinese brands have yet to fully penetrate is the large premium car segment. Brands such as BMW, Mercedes-Benz, Bentley, Jaguar Land Rover (JLR), and Rolls-Royce could be at risk if retaliatory tariffs were imposed.
The potential consequences of imposing import tariffs on Chinese EVs in the UK would be detrimental to the British automotive industry. British manufacturers like Bentley, JLR, and Rolls-Royce rely on access to the Chinese market for their premium vehicles. Retaliatory tariffs could hinder their exports and disrupt their business operations. It is therefore in the UK’s best interest to avoid escalating trade tensions with China and maintain a favorable trade relationship.
In conclusion, while the EU’s imposition of import tariffs on Chinese-made EVs suggests a similar course for the UK, the absence of a mainstream domestic manufacturing industry in the UK makes this threat largely irrelevant. The UK government has expressed no intention to impose such tariffs, recognizing the importance of an open and competitive market for electric vehicles. Imposing tariffs on Chinese EVs could lead to retaliatory measures from China, negatively impacting British manufacturers. It is crucial for the UK to prioritize a positive trade relationship with China and support its own automotive industry by fostering innovation and consumer choice.
