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Britain is reviewing whether to impose tariffs on Chinese car imports, a policy shift that could help its case for inclusion in proposed European Union manufacturing protections but risks raising costs for consumers and complicating Chinese investment. The review comes as Chinese brands expand quickly in the UK and the country’s carmakers depend heavily on exports to the EU.
The trade-off has sharpened ahead of potential EU “Made in Europe” rules, which would favour vehicles built within the bloc for subsidies, tax breaks and public procurement. The UK’s Society of Motor Manufacturers and Traders (SMMT) says the proposals could threaten British production and investment; the EU accounted for 58% of UK car exports in the first half of 2026, while China accounted for about 4%, according to figures reported by The Guardian.
Tariff review puts policy choice in focus
The UK government is considering whether to align more closely with the EU’s approach to Chinese vehicles as part of efforts to secure inclusion in planned legislation protecting European manufacturing. The Guardian reported on October 5 that Brussels believes Britain would need to introduce tariffs to establish a level playing field. No decision or timetable for a UK tariff announcement has been reported.
The EU introduced additional duties on Chinese electric vehicles in 2024, with rates of up to 45%, according to the Guardian. The UK has not imposed equivalent additional tariffs. Business Secretary Jonathan Reynolds has previously argued that UK levies could be reciprocated by China, potentially hurting British exporters, while tariffs could also increase prices for drivers and affect investment plans.
Chinese brands gain ground with UK buyers
Competition from Chinese manufacturers is changing the UK market. BYD, Omoda and Jaecoo more than tripled their share of new-car sales during the first eight months of 2026, reaching 12%, according to industry figures cited by the Guardian. September registrations rose 12% year on year, the strongest annual growth for a September since 2017, in preliminary SMMT data; the trade body attributed the expansion in part to new entrants, wider choice and attractive deals.
The sales momentum has brought a consumer benefit that complicates calls for protection. Autotrader commercial director Ian Plummer said the additional competition had made cars more affordable and encouraged some buyers to choose a new vehicle rather than a used one. Chinese companies are also potential investors: Chery, which owns Omoda and Jaecoo, has been in talks about building vehicles at Nissan’s Sunderland plant.
Industry divided over the cost of barriers
Some industry figures see tariffs as necessary to protect domestic manufacturers. Tim Tozer, a former Vauxhall chair, told the Guardian that tariffs were vital to prevent the sector from weakening further. Others warn that measures against Chinese imports could sacrifice consumer choice and investment without guaranteeing better access to European markets.
Chery deputy UK chief Victor Zhang rejected the suggestion that the company’s UK sales could serve as a route for Chinese vehicles into Europe, saying most of its UK sales were hybrid models and that vehicles sold in Britain remained there. He also said tariffs would not change Chery’s ongoing UK investment. Nissan Europe chair Massimiliano Messina, by contrast, has warned against Chinese manufacturers using Britain as a route into Europe.
EU market access is the central manufacturing risk
The SMMT has described the EU’s proposed “Made in Europe” rules and strict electric-vehicle battery rules of origin as a serious risk to British manufacturing. Chief executive Mike Hawes has argued that excluding UK-built vehicles would damage both sides because the automotive industries are closely integrated. In an October 2 statement, the trade body said UK automotive manufacturing directly supports €24 billion of EU economic activity and 250,000 jobs across the bloc, citing analysis it commissioned.
The immediate question is whether ministers will conclude that closer alignment with EU trade policy is worth the potential costs of tariffs and friction with China. The government’s review remains unresolved, and the scope and design of any possible measures have not been announced. The competing pressures are already clear: the EU is the dominant export destination for British cars, while Chinese entrants are becoming a larger force in the UK market and a possible source of investment.
