China’s Ministry of Commerce said on Monday that it would take “firm countermeasures” if Britain restricts Chinese electric vehicles, four days after UK Trade Minister Anas Sarwar said London and Brussels should “work together and act in lockstep” on China’s dominance of carmaking.
The warning, issued as a spokesperson’s answer to a reporter’s question and posted on the ministry’s website, is Beijing’s first formal response to a month of signals that the UK may abandon its position as the largest European market without extra duties on Chinese EVs.
“China and the UK are important trade and economic partners for each other, and China urges the UK to abide by World Trade Organization rules, think twice before acting, and not dance to the EU’s tune,” the statement said.
“China will closely monitor the UK’s moves, and if the UK insists on taking restrictive measures against Chinese electric vehicles, China will take firm countermeasures to safeguard the legitimate rights and interests of China’s industry,” it added.
The ministry also described automotive cooperation between the two countries as “complementary in strengths, equal and mutually beneficial,” and the question it answered referred to Sarwar by the title of Minister of State at the Department for Business and Trade.
What Sarwar Said
Sarwar made the remarks to Politico on the sidelines of the German-British Business Summit at Mansion House in London on October 15, in what the outlet called the clearest signal yet that the government is prepared to align with EU tariffs to secure access to the bloc’s “Made in Europe” program.
Asked whether Britain would consider tariffs on Chinese EVs, he said discussions with European partners “continue,” and that the sector had to “grapple with the challenge that comes from rapid expansion in China,” without giving a rate or a timetable.
The remarks followed a report in The Times on October 4 that Business Secretary Jonathan Reynolds was drawing up a package of potential tariffs and that ministers were prepared to match the EU’s levy of up to 45%, which the government neither confirmed nor denied, saying only that it continued “to engage closely with industry” and that no tariffs had been imposed.
Reynolds himself had argued the other way in September, telling Politico that Britain’s sector was “export-orientated,” that “you always have to take heed of retaliatory action if you put tariffs in place,” and that the position was “finely balanced.”
The EU Lever
The pressure comes from Brussels rather than from British carmakers.
The Financial Times reported on September 25 that the EU had asked Britain to raise its tariffs on Chinese EVs as a condition of closer trade coordination, linking the request to the Industrial Accelerator Act, whose “Made in Europe” rules would reserve certain public procurement and subsidies for products with 70% of their content from inside the bloc.
Prime Minister Andy Burnham said in September he would argue for Britain to be treated as a “trusted partner” under those rules, and an EU official told the FT that a customs union would resolve both the Made in Europe question and “fears the Chinese could avoid our tariffs by routing through the UK.”
A second deadline sharpens the choice, because stricter battery rules of origin under the EU-UK trade agreement take effect on January 1, 2027 and would put a 10% tariff on most electric cars traded between the two sides unless they are delayed, and Politico reported that London is working with the European Commission to avoid it.
The EU’s own measure, in force since October 30, 2024 for five years under Implementing Regulation 2024/2754, adds countervailing duties of 17.0% on BYD, 18.8% on Geely, 35.3% on SAIC, 7.8% on Tesla and 20.7% on other cooperating producers to the standard 10% import duty, taking the top combined rate to 45.3%.
Britain did not follow in 2024, and the gap has since turned the UK into the fastest-growing market for Chinese brands in Europe.
The Numbers Behind the Dispute
Chinese brands accounted for 81,776 of the 350,536 cars registered in the UK in September, or 23.3%, up from 12.4% a year earlier, according to a tally of SMMT marque data.
SMMT’s own breakdown shows BYD second among all brands in September with 20,129 registrations, up 80% on the year, and the Chery group third with 32,823 across the Chery, Jaecoo and Omoda and Lepas badges, up 171%, with the Jaecoo 7 the country’s best-selling car ahead of the Tesla Model 3.
MG, owned by SAIC, added 18,026, so the three largest Chinese groups alone registered nearly 71,000 cars in a month in which the whole market grew 12.1%.
Fully electric cars took a record 28.3% of September registrations at 99,199 units and 26.2% for the year to date, against a zero-emission mandate target of 33% for 2026, SMMT said, with electric vans at 9.6% against their own 24% target, and SMMT Chief Executive Mike Hawes called the result “a major achievement” while noting uptake remained behind the mandated targets.
The EU’s duties apply only to battery-electric cars, which matters for the UK debate because the Jaecoo 7 is sold with petrol and plug-in hybrid powertrains, and the Chery group’s growth would be largely untouched by a copy of the EU measure.
On the Chinese side, the China Association of Automobile Manufacturers reported vehicle exports of 1.053 million in September, up 61.4%, the fourth month above a million, with shipments to the UK up more than 50%, Yicai reported.
The Retaliation Risk
The ministry’s statement did not say what countermeasures it had in mind, but the precedent is recent, since China opened investigations into European brandy, pork and dairy after the EU duties were imposed.
Britain exported 555,826 cars in 2025, or 77.5% of the 717,371 it built, and China took 6.3% of those exports, about 35,000 cars, down 12.5% on the year, SMMT data show, so the direct volume at risk is small but concentrated in premium models.
The exposure that worries London is JLR, which sold 62,400 cars in China in its last financial year, down from 146,000 in 2017, and which The Times said had been the main objection inside government until ministers concluded “the balance has shifted” because of the cost of exclusion from the EU scheme.
China’s embassy in London had already said it “has expressed serious concern to the UK side” about the reports and “consistently and firmly opposes” discriminatory tariffs or restrictions on Chinese products, according to a statement quoted by Yicai on October 13.
A European-market head at a Chinese carmaker told the same outlet that UK tariffs were “impossible to implement in the short term, but the posture matters.”
The warning lands a week after Beijing and Brussels announced a consensus on hybrid vehicle trade on October 9, backed since by BYD, Geely and Chery, built on three principles the ministry listed on October 12 as respecting facts, non-discrimination and compliance, an understanding that Bloomberg reported would cap Chinese hybrid imports at 350,000 a year from December, rising 6% a year, against 302,000 imported in 2025.
Hyundai Chief Executive Jose Munoz said in September that the UK “has become like China” because “all the top sellers are Chinese because there are no barriers.”
The contrast with the tariff-protected bloc is stark in ACEA data, which put Chinese-branded cars at more than 9% of EU registrations in the first half of 2026, with wholly Chinese-owned brands at about 6.6%, up from 3.4% a year earlier, while Germany’s September share was 6.1% on KBA figures against the UK’s 23.3%.
ACEA, which welcomed the hybrid understanding this month as a way to manage Chinese arrivals “in an orderly way,” said in its May 4 fact sheet that Chinese-made cars at 7% of EU car sales in 2025, 20% of battery-electric sales and 12% of plug-in sales, on imports of 1,002,742 cars worth 13.7 billion euros ($15.4 billion), against EU vehicle exports to China of 161,514 units worth 8.5 billion euros ($9.5 billion), making China the bloc’s fifth-largest export market by volume.
