Britain's refusal to tariff Chinese cars draws a reported 'made in Europe' threat from Brussels

I think the export case is the weakest part of the government's position. China took about 4% of UK car exports in the first half of the year ^[3]. On that split, the EU market is about 14 times larger for British-built cars ^[1], and the reciprocity argument ministers make ^[4] protects the smaller flow. Tim Tozer, a former chair of Vauxhall, said Reynolds was "whistling in the wind" in hoping to keep exporting to China en masse, and called that market "fiercely nationalistic" ^[20].

Emily Sawicz of the consultancy RSM UK said Chinese investment could be a "lifeline" for carmakers ^[11]. Drivers have flocked to cheaper Chinese models ^[24]. Preliminary SMMT figures show new car registrations rose 12% year on year in September, the best month for annual growth since 2017 ^[9]. Ian Plummer, commercial director at Autotrader, said Chinese competition "is encouraging more people to go and buy a new car" ^[13]. Ministers also face the risk that tariffs would deter Chery from investing further in the UK ^[23]. Chery disputes that. "Tariffs can come and go, but we won't change our ongoing investment in the UK," said Victor Zhang, its deputy UK chief ^[16].

Nissan's objection is that Britain becomes a back door into the EU. "Europe cannot have a Trojan horse where the Chinese are going to flood the market through the UK," Massimiliano Messina, Nissan's chair in Europe, said last month ^[14]. His company's Sunderland plant is the one where Chery is in talks to build cars ^[23]. Zhang, whose company owns the Omoda and Jaecoo brands ^[22], said: "Most of what we sell are super-hybrids, not the cars that those tariffs are about, and the cars we sell here stay here." ^[15] That answer holds against the EU's current duties on Chinese electric vehicles. It holds less well if Brussels acts on calls for new barriers on hybrid imports, possibly quotas or price floors ^[17].

The Brussels warning is known only through reports of what EU officials told Andy Burnham ^[2]. Those reports, as carried by the Guardian, do not name the officials or give a date for any measure. Mike Hawes, the SMMT's chief executive, said: "The UK and EU automotive industries are deeply integrated, so effectively excluding British-produced vehicles from their largest market would assure mutual damage." ^[7]

The sequencing follows from that uncertainty. This quarter, the current position keeps showroom prices down and Chinese capital interested ^{[5] [23]}. The consequence comes later, for carmakers deciding where to build while they cannot know whether their largest market will treat UK-built cars as European ^[6]. With no date set, this is a decision for this year's planning, not this week's. Sawicz's phrase was that the UK "cannot afford to drift between the two indefinitely" ^[10].