Brussels is seeking closer alignment between Britain and EU trade policy, warning that differences in tariffs could allow Chinese vehicles to enter the bloc through the UK.
Brussels has urged Britain to raise tariffs on Chinese cars and align more closely with European Union trade policy to prevent Chinese manufacturers from bypassing EU trade barriers through the UK, the Financial Times reported on Friday.
According to the report, EU officials told British Prime Minister Andy Burnham that closer alignment with the bloc’s trade rules would help Britain avoid restrictions under the EU’s proposed “Made in Europe” policy.
The FT report, citing two people familiar with the matter, said the EU’s preferred solution would be for Britain to join the bloc’s customs union. An EU official told the newspaper that a customs union would address many of the concerns surrounding “Made in Europe” rules as well as differences in tariffs.
The EU is particularly concerned that lower British tariffs on Chinese vehicles could allow Chinese manufacturers to route cars through the UK and subsequently gain access to the European market while avoiding higher EU tariffs.
Burnham said earlier this week that he would argue for Britain to be treated as a “trusted partner” under the EU’s proposed “Made in Europe” framework. He has warned that excluding the UK could hurt Britain’s automotive industry, which is closely integrated with European supply chains.
More from BusinessThe proposed EU policy seeks to reduce reliance on Chinese components by giving preference to goods produced within Europe. The approach could have significant implications for British manufacturers because the UK’s automotive sector supplies parts to EU-based companies and exports vehicles to the bloc.
The issue comes as the EU seeks to address what European Commission President Ursula von der Leyen has described as an “unsustainable” trade deficit with China. She has said the bloc would use all available tools to reduce the imbalance.
Reuters said it could not immediately independently verify the Financial Times report. The European Union and Britain’s Foreign Office did not immediately respond to requests for comment outside business hours.
