The UK government said on Friday it "would welcome the objective to have the UK included in the Industrial Accelerator Act" after France dropped its opposition to Britain joining the scheme. The rules aim to curb subsidised Chinese imports by giving EU-made products preferential treatment, and the UK fears being locked out of billions of pounds worth of automotive supply chains if excluded.
According to a Franco-German proposal put forward on Thursday night, the price of joining would be aligning with EU tariffs on Chinese EVs imposed by the bloc in 2024. Third countries such as the UK and Norway would have to accept "dynamic alignment on the EU's conditions related to third countries' investments and on relevant EU trade defence measures".
The Chinese embassy in London said it was "firmly opposed to any discriminatory practice involving tariff hikes or restrictive measures on Chinese products" and added that "trade protectionism runs counter to WTO rules and market principles". The embassy said it had "expressed serious concern to the UK side".
Asked whether the UK accepted it would have to impose tariffs to join the scheme, a No 10 spokesperson said it was "premature to speculate" and there was "still a European process to run". They added that the UK "keeps all tariffs under review" and works with the automotive sector to reflect its best interests.
Earlier this week, Business Secretary Jonathan Reynolds said he would not be coerced into aligning with EU policy. However, The boss of Mercedes-Benz, Ola Källenius, who also presides over the European car trade body ACEA, warned that locking the UK out of the legislation would be a "deliberate choice" by EU leaders to hurt the car industry across the bloc.
Chinese EVs have seen rapid growth in the UK market. BYD sales rose 78% year on year in September, Chery surged 660%, and Changan increased by more than 3,000% in market share.
EU lawmakers are expected to finalise the Industrial Accelerator Act by the end of 2026 or early 2027. MEPs have already tabled 5,100 amendments, including one that would embrace the UK. Tariffs could protect UK-based manufacturers from cheap Chinese imports but might also raise prices for consumers and harm British manufacturers exporting to China.