The UK has not followed the US and EU in imposing import taxes on Chinese vehicles, leaving the country as an outlier. The US has effectively shut out Chinese EVs, while the EU has imposed duties of up to 45%. EU officials reportedly warned the UK last month that without tariffs on Chinese cars, Brussels would enforce ‘made in Europe’ rules that restrict subsidies and procurement to vehicles built within the bloc, hitting British carmakers in a market that accounted for 58% of UK car exports in the first half of the year.
Business secretary Jonathan Reynolds has argued that levies would ‘probably be reciprocated’, costing UK manufacturers sales in China, which represented about 4% of exports. Tariffs would also raise prices for British drivers, who have flocked to cheaper Chinese models. Chinese brands such as BYD, Omoda and Jaecoo more than tripled their share of UK new car sales in the first eight months of 2026, reaching 12% of the market.
Emily Sawicz of RSM UK said there is ‘a difficult trade-off’, adding that the UK ‘cannot afford to drift between the two indefinitely’. Chinese investment could be a ‘lifeline’ for carmakers, while access to Europe is ‘crucial’ for smaller manufacturers. Ian Plummer of Autotrader said Chinese competition has made cars more affordable and ‘is encouraging more people to go and buy a new car’.
Industry figures show British new car registrations rose 12% in the year to September, the best month for annual growth since 2017, driven by electric vehicle demand and Chinese brands. The Society of Motor Manufacturers and Traders has warned that the EU’s ‘made in Europe’ rules pose an existential threat to British car production.