Reynolds says EU pressure will not decide UK tariffs on Chinese cars

Business secretary Jonathan Reynolds has said the UK will not change its trade rules because of pressure from Brussels, despite calls for Britain to impose tariffs on Chinese electric vehicles, which already face EU duties of up to 45 per cent.

The EU imposed those tariffs in 2024 and on Friday agreed a quota of 350,000 a year on Chinese hybrid cars.

“I just want to be clear: when we make any trade decision in terms of trade defence 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 told the Guardian during a trade trip to India.

He said levying sanctions on Chinese goods was an option in the future and that the issue was kept under review, depending on the needs of industry. “It’s an export-led sector, so that’s what I’ve got to take into account,” he said of the UK automotive sector.

Brussels has raised concerns that the UK could provide a back door to the European market. Nissan has agreed to look at building cars in northern England for the Chinese manufacturer Chery.

Reynolds rejected the suggestion, saying: “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.”

The comments come in the final weeks of negotiations before the UK-EU summit, which the prime minister, Andy Burnham, confirmed this week would be held in Brussels on 20 November.

Burnham, who has said he will argue for closer integration with the EU at the summit, told the Commons on Monday that he wanted a “serious dialogue” over the UK’s place in Europe.

One EU official said this week that the UK’s negotiating position would determine whether it was worth pursuing more fundamental changes, such as British access to the single market, a new customs union or re-accession.

The EU’s new Made in Europe trade rules aim to protect European companies from subsidised Chinese imports, but British manufacturers worry they will also be shut out of supply chains. The issue will not formally be on the summit agenda, but British officials hope to use the talks to shape the legislation.

Some in Brussels have been pushing for Britain to levy tariffs on Chinese electric vehicles in return for access to the European market under the new rules. Reynolds has previously dismissed that option, in part because of the risk that Beijing could hit the UK with reciprocal tariffs, damaging British companies such as Jaguar Land Rover.

Reynolds said it would be to Europe’s detriment if it did not admit the UK into the scheme, pointing to integrated supply chains. “If you look at the impact analysis of such a policy, the consequences for the EU [of] excluding the UK are much more difficult,” he said.

He called the summit an important milestone, and said new trading terms for electricity, emissions and food and drink products would be a major achievement in themselves.

Speaking during a trade mission to Delhi and Mumbai, Reynolds acknowledged that the free trade agreement he helped strike with India in 2025 would become defunct if Britain rejoined the EU.

“Obviously, if you enter those arrangements, you are doing things collectively. So there would be trade relationships with the UK that were based on Europe, the EU as a whole, that is how the European Union works in terms of its relationship,” he said.

He said it was still worth pushing to broaden the scope of the agreement, as he unveiled UK-India investments that officials say are worth more than £1bn to the UK over the next 15 years.

Indian tariffs on Scotch whisky have already been halved from 150 per cent to 75 per cent under the deal, the government said this week. British officials now want to free up trade in services, including mutual recognition of legal qualifications.

“There are some specific things regarding who can practice law and in which area,” Reynolds said. “I am confident over the medium to long term that this will improve over time.”

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