China warns it will 'resolutely retaliate' if the UK taxes Chinese EVs

China has warned that it will “resolutely retaliate” if the UK follows the European Union and puts tariffs on Chinese-made electric cars. A spokesperson for China’s Ministry of Commerce told Politico, as reported by Car Dealer Magazine on 23 October 2026: “If the UK insists on imposing restrictions on Chinese electric vehicles, China will resolutely retaliate and safeguard the legitimate rights and interests of Chinese industries.”

The warning comes as the government weighs whether to align with EU tariffs in return for a place in Brussels’s “Made in Europe” scheme. For UK drivers, the stakes are high. Chinese brands took 23.3% of new car sales in September, the Jaecoo 7 was the country’s best-selling car, and a large part of their appeal is price. A tariff could change that. Our earlier explainer on possible UK tariffs on Chinese electric cars sets out the options in detail.

What exactly did China say?

China told Britain to stay out of the EU’s approach and to follow World Trade Organization rules. “China urges the UK to abide by WTO rules, think carefully, and not follow the European Union,” the commerce ministry spokesperson said. The ministry said it was “closely monitoring” developments.

China’s embassy in London had already responded on 16 October, after the latest reports. It said it was “firmly opposed to any discriminatory practice involving tariff hikes or restrictive measures on Chinese products”, according to The Guardian. “We have expressed serious concern to the UK side regarding the reports in question. Trade protectionism runs counter to WTO rules and market principles.”

China did not say what form any retaliation would take. Its threats to the EU over the bloc’s new quota on Chinese hybrids were described by European Commission officials as “bloodcurdling”, according to The Guardian.

Why is the UK thinking about tariffs at all?

The main reason is the EU’s Made in Europe scheme. Formally called the Industrial Accelerator Act, it would give cars built in Europe, with enough European parts, preferential access to EU EV grants and public-sector contracts. If the UK is not counted as “European”, cars built in Sunderland, Oxford, Burnaston and elsewhere would be at a disadvantage in their biggest export market.

On 15 October, France and Germany set out terms for the UK to join. Their proposal would let in “European partners who were part of the EU single market as of 1 January 2020”, which includes the UK and Norway, provided they accept “dynamic alignment on the EU’s conditions related to third countries’ investments and on relevant EU trade defence measures”. In plain terms, the UK would have to match EU tariffs on Chinese EVs. We cover the deal in our report on the UK and Made in Europe.

The government is signalling that it is open to this. Trade minister Anas Sarwar told Politico on 15 October: “The more that the UK and the EU work together and act in lockstep, the better it is for both the UK and the European Union.” He added: “Do we have to grapple with the challenge that comes from rapid expansion in China? Of course we do.”

Downing Street said it was “premature to speculate” on the terms of any deal but that “the UK obviously has its own trade policy and it keeps all tariffs under review.”

There is a second, separate issue. From the start of 2027, stricter rules of origin under the UK-EU trade deal are due to apply, which could put a 10% tariff on EVs traded between the UK and EU if they contain too many non-European parts. The UK is working with the European Commission to avoid that. Our guide to the 2027 rules of origin explains what it could mean for UK-built EVs.

What tariffs does the UK charge now?

The UK charges its standard 10% import duty on cars built in China, the same rate as for most cars from outside the EU, whether they are electric or not. It has no extra tariffs aimed at Chinese EVs.

The EU charges its own 10% duty plus anti-subsidy duties on Chinese-built EVs, which it imposed in 2024 after an investigation into Chinese state support. Those extra duties vary by maker. The Times has reported that tariffs of up to 45% could be placed on Chinese EVs imported into the UK if it aligned with the EU, as covered by the Mirror.

Market	Duty on a China-built EV
UK today	10% standard import duty
EU today	10% import duty plus anti-subsidy duties that vary by maker
UK if aligned with the EU	Would match the EU’s combined rates; The Times reported up to 45%

The difference helps explain why Chinese EVs are often cheaper in the UK than in Europe, and why the EU worries that the UK could become what Nissan’s European chairman, Massimiliano Messina, called a “corridor” or “Trojan horse” for Chinese cars, according to The Herald.

Why is the government finding this so hard?

Because the UK car industry depends on exports to both sides. About 80% of UK-built cars are exported, more than half of them to the EU and 6% to China, according to The Guardian. A tariff on Chinese EVs could protect access to the EU but invite Chinese retaliation against UK exports.

Business secretary Jonathan Reynolds has been the most cautious voice. “We are an export-orientated sector,” he told Politico in September. “So clearly, you shouldn’t do anything that risks your export markets, and you always have to take heed of retaliatory action if you put tariffs in place.” He called the decision “finely balanced” and said this month he would not be coerced into following the EU.

Others in Westminster are more hawkish. Liam Byrne, the Labour chair of the parliamentary business committee, said tariffs on Chinese EVs would be “a small price to pay” to save the car industry in the UK and the EU, and that the UK “urgently needs a coherent China strategy, which it does not have today.”

How quickly could a tariff happen?

Not quickly. Under WTO rules, quotas can be introduced within months, but tariffs could take more than a year, according to The Guardian. The process starts with formal notice of an investigation, then evidence-gathering on the harm Chinese imports are said to cause the UK industry.

The EU’s own Made in Europe legislation is not finished either. MEPs have tabled 5,100 amendments, and EU lawmakers are expected to finalise it by the end of 2026 or early 2027. That means any UK tariff linked to the scheme is unlikely to affect showroom prices before 2027 at the earliest.

What would a tariff mean for prices?

Probably less than the headline rate. Professor David Bailey of the University of Birmingham told the Mirror that Chinese brands may choose to swallow much of the cost to protect their market share. “If manufacturers pass it on, Chinese EVs become more expensive and the price gap with European brands narrows,” he said. “But Chinese manufacturers may absorb much of the cost to protect market share, so consumers could see a squeeze rather than a dramatic price jump. It’s not the end of the boom, but potentially the end of the easy ride.”

Brands also have another option: build the cars somewhere else. BYD is preparing to start production at a new factory in Hungary, and Chery is preparing to build cars at the former Nissan plant in Barcelona through a partnership with Ebro, according to The Herald. A Chinese-brand car built in Europe would not face a tariff aimed at cars built in China.

It is also worth remembering that “Chinese-built” is not the same as “Chinese brand”. Some cars from Western brands are made in China, including versions of the Tesla Model 3 and some Mini and Volvo models. Any tariff would apply by where a car is built, not by the badge.

Which brands have the most at stake?

The brands with the largest UK sales of China-built EVs. Chinese brands are growing fast: The Guardian reported BYD’s UK sales up 78% year on year in September and Chery’s up 660%. BYD was the UK’s second-biggest brand that month, behind only Volkswagen, as we covered in our report on Chinese brands’ 23.3% share.

However, the brand totals include petrol, hybrid and plug-in hybrid cars as well as EVs. The EU’s anti-subsidy duties apply to battery electric cars, and the EU is handling hybrids with a separate import quota of 350,000 cars a year from December. A UK tariff copied from the EU would hit EVs first, which could push Chinese brands to lean even harder on hybrids here. The Jaecoo 7, for example, sells mainly as a plug-in hybrid.

What should you do if you are buying a Chinese EV?

There is no reason to panic-buy. No tariff has been announced, none could take effect quickly, and the cars on sale now are priced in today’s market. But there are a few sensible steps:

• Compare after discounts. Chinese-built cars do not qualify for the Electric Car Grant of up to £3,750, so many brands offer their own discounts. Compare the price you would actually pay against a grant-eligible rival. Our list of the latest Electric Car Grant models helps.
• Watch resale values. If tariffs push up the price of new Chinese EVs, used values could rise too. If brands cut prices further to grab share before any tariff, used values could fall. On a PCP or lease, the guaranteed future value or monthly payment protects you from that risk.
• Check where the car is built. Two cars from the same brand can be built in different countries, and only those built in China would be hit.

What happens next?

The decision now sits with ministers, and it is tied to the wider deal with the EU. The UK wants into Made in Europe, wants to avoid the 10% rules-of-origin tariff in 2027, and does not want a trade war with China. It may not be able to have all three.

For buyers, the next few months matter less than the next year. A tariff, if it comes, is likely in 2027, and the market may look different by then as more Chinese brands start building cars in Europe.