UK could follow EU safeguarding measures on China-made EVs

The UK’s Trade Remedies Authority (TRA), a post-Brexit trade watchdog, says it would be ready to implement an investigation on Chinese electric vehicle imports if the government required it to do so.

Oliver Griffiths, ceo of TRA, told the Guardian neither the government nor carmakers have requested such a move yet, though they are closely watching market developments. “We’ve been in close and regular contact with the industry on this one, and lots of people are looking at the import numbers… All eyes will be on Brussels later on this year when they could potentially bring out an interim measure on this,” he says.

Last year, the European Commission announced it would be probing China-made electric vehicles entering its borders due to heavy subsidies and competition distortion. Then, EC President Ursula von der Leyen said the investigation seeks to defend the EU against “unfair practices,” de-risking, not decoupling from China. The probe reportedly started in October on BYD, Geely and SAIC, but is also set to cover European carmakers with production capacity in China.

The EU remains the UK’s biggest automotive trade partner and vice-versa. According to the latest trade report from the UK automotive association SMMT, China was the second largest supplier of cars to the UK in 2022, with a 9.2% share of its total imports (including both EV and ICE cars). Most of the car imports (71.3%) came from the EU.

According to Sam Lowe, partner and trade expert at Flint Global, if and when the EU introduces new countervailing tariffs on China-originating EVs, “the UK will come under a lot more pressure to do the same.”

“Where the EU moves, the UK usually follows,” he adds in a note seen by Kallanish. “While the UK government and industry are currently publicly reluctant to replicate the EU measures, this will probably change once China-originating cars originally destined for the EU turn up in observable quantities on British driveways.”

The EU is among one of the most open markets for Chinese firms trying to get a footprint abroad, Lowe notes. That’s because, with a 10% tariff, it’s relatively more attractive to Chinese car exporters than the US and Turkey, where import tariffs stand at 27.5% and 50%, respectively.