Brussels Tells London to Raise Tariffs on Chinese Cars or Face 'Made in Europe' Barriers

The European Union has told the United Kingdom that it must raise tariffs on Chinese cars and align more closely with the bloc's trade policy if British products are to escape the coming "made in Europe" content rules, the Financial Times reported. London has pushed strongly for equal treatment and continues to rule out joining a customs union, which Brussels has presented as the straightforward solution.

The gap in question is large. Chinese cars entering Britain pay a flat 10 percent import charge, while entering the European Union each brand carries an additional duty scaled to the state support it received, taking BYD to about 27 percent and SAIC, the owner of MG, to 45.3 percent. Brussels views the difference as an entry point into the single market. The British business department has said its policy is right as it stands.

The content rules themselves carry a cost. A recent analysis found that European battery sourcing requirements could add about 2,100 euros to the price of an electric car, a bill that falls on European buyers regardless of where the vehicle is assembled.

Britain is being asked to choose between cheap Chinese vehicles for its consumers and duty-free access for its own exporters into its largest market. There is no arrangement that delivers both.