Andy Burnham is facing mounting pressure from leading UK car manufacturers to introduce tariffs on cheap Chinese vehicle imports, following a warning from the European Union. The Labour government has been told that Britain's car industry is grappling with a "difficult trade-off" between the Chinese and European Union markets.
As it stands, the UK does not impose import taxes on Chinese vehicles. However, the EU has threatened the Makerfield MP with 'made in Europe' barriers on British exports to the bloc. The warning comes as car makers reportedly struggle to balance the benefits of both markets, according to reports on Sunday, October 4.
Industry leaders warn of 'atrophying' car sector
Tim Tozer, a former chair of Vauxhall, warned that tariffs were "vital" to stop Britain's car sector "atrophying". He said: "We are at last knockings now, trying to save the industry."
Jonathan Reynolds, the business secretary, has warned that any levies placed on China by the government would "probably be reciprocated". This highlights the delicate balancing act facing policymakers as they navigate the competing interests of the Chinese and European markets.
Consultants urge clarity on government direction
Emily Sawicz, of the consultancy RSM UK, said: "There is a difficult trade-off." She added that the UK "cannot afford to drift between the two indefinitely".
Sawicz noted that Chinese investment could be a "lifeline" for carmakers, while access to Europe would also be "crucial" for smaller manufacturers. "Being excluded risks UK suppliers becoming increasingly shut out of those European opportunities," she added. "Manufacturers need clarity on which direction the government intends to take so they can make long-term investment decisions."
Chinese competition boosts car affordability
Ian Plummer, commercial director at Autotrader, said competition from Chinese brands had made cars more affordable and "is encouraging more people to go and buy a new car". Some of the UK's top-selling models are now from the Far East.
Mike Hawes, the SMMT's chief executive, said: "The UK and EU automotive industries are deeply integrated, so effectively excluding British-produced vehicles from their largest market would assure mutual damage."
The debate over tariffs comes amid broader discussions about the UK's future trading relationships, with car manufacturers seeking clarity on the government's long-term strategy to make informed investment decisions.
