Brief
UK car makers face trade‑off between China and EU markets
Industry leaders warn that EU tariffs on cheap Chinese cars could force the UK to choose between two key markets.
By Felo News Desk · Published
Britain’s auto sector is wrestling with a “difficult trade‑off” between China and the European Union, according to the Guardian on Oct. 4. The UK has so far avoided import duties on Chinese vehicles, while the EU imposes up to 45% tariffs and is preparing “made‑in‑Europe” rules that could block British‑made cars from its market.
What happened
EU officials warned Greater Manchester’s mayor Andy Burnham last month that without UK tariffs on low‑cost Chinese cars, Brussels would apply protectionist measures to British exports. The European Commission’s new rules would restrict subsidies, tax breaks and public procurement to vehicles built inside the EU, threatening the UK’s 58% share of car exports to Europe in the first half of 2026. Meanwhile, Chinese brands such as BYD, Omoda and Jaecoo have more than tripled their UK market share to 12% in the first eight months of the year.
What the reports add
The Guardian notes that British new‑car registrations rose 12% in the year to September, driven by electric‑vehicle demand and Chinese models. It also cites SMMT data showing the Jaecoo 7 and BYD’s Sealion 7 among the top sellers. The article highlights that the EU’s “made‑in‑Europe” rules could be an “existential threat” to UK production, according to SMMT chief executive Mike Hawes.
What was said
Business secretary Jonathan Reynolds argued that any UK levy on Chinese cars would likely be reciprocated and could hurt sales in China. Emily Sawicz of consultancy RSM UK said, “There is a difficult trade‑off… the UK cannot afford to drift between the two indefinitely.” Ian Plummer, commercial director at Autotrader, added that competition from Chinese brands has made cars more affordable and is encouraging more people to buy new vehicles.
How it came about
Earlier this year, the UK chose not to follow the US in imposing duties on Chinese cars, positioning itself as an outlier in the global trade debate. The EU’s upcoming “made‑in‑Europe” measures follow a broader push to protect its automotive sector, a development first reported by Felo News in a piece on EU‑UK trade tensions last month (EU‑UK auto tariffs).
Key facts
- EU officials warned that without UK tariffs on cheap Chinese cars, Brussels may block British car exports. (theguardian.com)
- Chinese brands BYD, Omoda and Jaecoo increased their UK market share to 12% in the first eight months of 2026. (theguardian.com)
- British new‑car registrations rose 12% year‑to‑September, the strongest growth since 2017. (theguardian.com)
- The EU accounts for 58% of UK car exports in H1 2026, compared with about 4% to China. (theguardian.com)
- Business secretary Jonathan Reynolds said UK tariffs on Chinese cars would likely be reciprocated. (theguardian.com)
Sources
- [1] theguardian.com — originally reported as “UK car industry faces ‘difficult trade-off’ between Chinese and EU markets”
