UK could impose massive tariffs on Chinese electric cars after ‘looking very closely’ at EU and US moves
An expert has spoken to GB News about the possibility of the new Labour Government imposing tariffs on electric vehicles made in China amid uncertainty that cheaper EVs could impact the UK market.
In recent months, the European Union, United States and Canada have all taken decisive action against Chinese manufacturers of electric vehicles with strong tariffs in a bid to protect the established vehicle market.
In May, President Biden announced a massive hike in tariffs on Chinese electric vehicles from 25 per cent to 100 per cent to protect US jobs from China’s “unfair trade practices”.
Canada followed suit in August by imposing a 100 per cent tariff on EVs, as well as a 25 per cent on Chinese steel and aluminium. European Union member states voted to back plans to hike tariffs last month too.
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The EU stated that Chinese brands were benefitting from unfair subsidies. Three sampled brands were given to BYD (17.4 per cent), Geely (20 per cent) and SAIC (38.1 per cent).
Other electric vehicle producers in China who cooperated with the investigation were handed a 21 per cent tariff, while all other EV producers who did not cooperate in the investigation would be subject to a residual duty of 38.1 per cent.
Speaking to GB News, Greta Peisch, the most recent General Counsel of the Office of the United States Trade Representative (USTR), noted that the UK Government could follow the lead of the EU, United States and Canada in cracking down on EVs from China.
Peisch personally led US tariff action against China on electric vehicles, chips and more, while coordinating with European partners on tariffs and spoke about the future impact of the measures on Chinese manufacturers.
She said: “I think the UK would look very closely at what the EU does. What happens in the EU is much more directly impactful for the UK, even more so than the US and Canada given the integration of the markets.
“I think the UK is watching very closely at what the EU is doing. A challenge for both the EU and the UK is also Chinese investments that are already in their markets in this sector, which is true of both markets.”
The most famous Chinese brand in Europe and the UK is likely BYD. The Shenzhen-based manufacturer was seen across the continent over the summer as one of the main sponsors for the 2024 Euros in Germany.
They have also made an aggressive play for the cheaper electric vehicle market, with its Atto 3, Dolphin and Seal models. BYD, which stands for Build Your Dreams, has also looked to increase its presence at dealerships around the country.
According to data from the Society of Motor Manufacturers and Traders (SMMT), BYD has sold 5,260 vehicles in the UK so far this year, representing 0.35 per cent of the total market. This represents greater registrations of new vehicles than established brands like Bentley, DS, Smart and Subaru.
Peisch noted how the UK would be backed by the introduction of tariffs from major allies, as well as the focus on supporting the future of established car companies in Europe and North America.
She added: “That will certainly complicate the policy calculus, but from the US perspective, the more countries that get on board with addressing this issue, which is a global issue – the US can’t address this issue on its own – the more effective it will be for all of us.”
Chinese manufacturers are already taking matters into their own hands to avoid or minimise the impact of tariffs from Europe and North America. BYD signed a $1billion (£770million) deal to set up a factory in Turkey, which could have the ability to produce up to 150,000 vehicles a year.
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Since Turkey is in the EU’s Customs Union, vehicles made in the country and exported to EU nations can avoid the additional tariff, providing further benefits for BYD’s goal of expanding into Europe.
Speaking in March, former Transport Secretary Mark Harper said Britain would use “robust” trade sanctions to prevent China from “flooding” the market with cheaper EVs.
A Government spokesperson told GB News: “We are always vigilant to international developments and are very clear that any decision over the implementation of tariffs has to be the right one for our domestic automotive industry.”