UK rules out tax on Chinese EV exports

The United Kingdom has no plans to yield to pressure from the European Union and start taxing electric vehicles, or EVs, imported from China, its business minister has said.

Jonathan Reynolds, who is the UK's secretary of state for business, innovation, science and trade, told The Guardian newspaper the country will not change its trade rules just to appease other European nations that favor import taxes, or tariffs, on Chinese products, and especially on Chinese EVs.

"I just want to be clear: when we make any trade decision in terms of trade defense tariffs in relation to the EU, that's based on the UK interest — it's not based on any other country asking for that," Reynolds said. "In 2024, (we) looked at this issue carefully, and we keep it under review depending on what the needs of industry are … But it comes down to what is the fundamental nature of the UK automotive sector. It's an export-led sector, so that's what I've got to take into account."

Reynolds, who is also president of the UK's Board of Trade, said new tariffs would likely be matched by new tariffs levied by trading partners, which would hurt British exporters.

He made the comments against the backdrop of Prime Minister Andy Burnham recently appearing to open the door to the idea of the UK eventually rejoining the EU. But despite the nation's clear desire to align itself more closely with the bloc, Reynolds said the UK will not follow Brussels' lead with regard to taxes on Chinese exports, which include tariffs introduced in 2024 of up to 45 percent on Chinese EVs. The bloc also agreed recently to impose a 350,000-vehicle annual quota on imports of Chinese hybrid vehicles. Brussels said their popularity had been causing job losses at European automakers.

Reynolds said he does not agree with the EU on the need to impose tariffs, and he also said he disagrees with the bloc's claim that the UK could now become an alternate, cheaper route into the European mainland for Chinese auto exporters.

"The UK currently has no major Chinese manufacturer based in its automotive sector, so we're not making vehicles here and sending them to the single market through some sort of back door," he told The Guardian.

The issue is likely to be discussed again when the UK and the EU sit down for a summit in Brussels, Belgium on Nov 20 that Burnham has said will be a "serious dialogue" about the UK's place in Europe.

Reynolds has said the planned UKEU summit will also likely include discussion around trading terms for electricity, food, and drink, and debate about collaborating on tackling carbon emissions.