China warns UK of retaliation if it follows EU in restricting Chinese EVs

• China's commerce ministry urged the UK to comply with WTO rules and warned against following the EU in restricting Chinese EVs.
• UK trade minister said tariff discussions were continuing as London seeks access to the EU's "Made in Europe" program.

China's Ministry of Commerce warned it would retaliate firmly if Britain imposes restrictions on Chinese electric vehicles, after the UK's trade minister said discussions with European partners on potential tariffs were continuing.

Automotive cooperation between China and Britain draws on complementary strengths and delivers mutual benefits on an equal footing, the ministry said in a statement on Monday. It urged Britain to comply with World Trade Organization rules and "think twice before acting, rather than follow the EU's lead."

"China will closely monitor the UK's actions. If the UK insists on imposing restrictions on Chinese EVs, China will take firm countermeasures to safeguard the legitimate rights and interests of its industry," the ministry said.

The warning underscores Britain's trade-offs on automotive trade policy: coordination with the EU could help preserve British manufacturers' position in the European market, but could also trigger Chinese retaliation.

UK Trade Minister Anas Sarwar said Britain and the EU must work together and act in lockstep to address China's dominance in the automotive sector, Politico reported on October 15.

Asked whether Britain was considering tariffs on Chinese EVs, Sarwar said discussions with European partners were continuing, without specifying tariff rates or an implementation timeline.

Politico described the comments as the clearest signal yet that the UK government was prepared to consider aligning with EU tariffs on EVs to secure access to its "Made in Europe" program.

Britain is lobbying the EU to include British businesses in the policy framework. The EU's Industrial Accelerator Act gives EU-made products preferential treatment in certain public procurement projects, potentially putting British companies at a disadvantage if they are excluded.

The dispute had already become a focal point in UK-EU trade talks. The Financial Times reported on September 25 that the EU had called on Britain to raise import tariffs on Chinese EVs, linking the treatment of British goods to closer trade policy coordination.

Britain did not follow the EU in imposing additional tariffs on Chinese EVs in 2024. In October that year, the EU introduced definitive countervailing duties for 5 years on battery electric vehicles (BEVs) imported from China.

The additional duties set at the time ranged from 7.8% to 35.3%. Combined with the standard 10% import tariff, the highest total rate reached 45.3%.

The UK government had also publicly expressed concern about the risk of retaliation. Britain's Business Secretary Jonathan Reynolds told Politico in September that the UK automotive sector depended on exports and that tariff decisions must take into account the impact on export markets.