7:22 am, October 17, 2026
France and Germany have put forward proposals to allow Britain to join the EU’s Made in Europe scheme – but it’s likely to mean tariffs on Chinese cars.
National newspapers said inclusion in the scheme, which would allow car manufacturers that build in Britain access to lucrative European contracts, would hinge on imposing tariffs on Chinese electric cars.
Chinese cars have flooded the UK market and accounted for some 25% of car sales in September – but the EU sees this as a ‘back door’ entrance to its market.
Yesterday, No10 said inclusion in the Made in Europe scheme would be positive for the UK automotive industry.
Asked about the reports on Friday, a No 10 spokesperson said the Government would ‘welcome the objective to have the UK included in the Industrial Accelerator Act’.
She added: ‘This would be good news for the British automotive industry and the jobs and investment it supports across the UK.’
Earlier this week, the Prime Minister said the Made in Europe scheme presented ‘risks to British manufacturing’ and promised to raise concerns about its impact on UK automotive firms with the bloc.
The scheme is intended to protect clean technology firms and electric vehicle manufacturers from cheap Chinese competition.
The EU has already moved to limit imports of Chinese electric vehicles, including by imposing tariffs, and replicating those levies could be the price of the UK’s inclusion in Made in Europe.
So far, Britain has resisted pressure from Europe to impose such tariffs, with Jonathan Reynolds, the Trade Secretary, saying decisions on tariffs would be ‘based on the UK interest’.
Imposing tariffs could also put the UK’s electric vehicle targets at risk by making them more expensive for consumers.
Asked whether the UK would be willing to align with the EU on tariffs, the No 10 spokeswoman said it would be ‘premature to speculate’ on the terms of any deal with the bloc.
She added: ‘But more broadly, on the principle, the UK obviously has its own trade policy and it keeps all tariffs under review. And we work closely with the British automotive sector to make sure that that approach reflects their best interests.’
Earlier this week, in an interview, Jonathan Reynolds told The Times that Britain should not hit its climate change targets by importing cheap Chinese vehicles at the cost of its domestic car makers.
He said said the impact of soaring Chinese car sales were under ‘close review’, but that there were no ‘immediate’ plans to implement tariffs.
The government is carefully considering raising tariffs on Chinese cars in lock step with Europe where Chinese EVs currently face levies of 45%.
Without access to the crucial scheme, car manufacturers who build cars in Britain could be frozen out of the European policy which aims to counter Chinese makers by limiting green subsidies, public contracts and corporate fleet incentives strictly to cars made within the EU.
British-made cars face being written out of the financial perks and with some 60% of cars made in the UK currently heading to Europe, this could be devastating to British-based car makers.
Nissan, Jaguar Land Rover, Mini and Stellantis all build cars and vans in the UK and would face varying degrees or pain if they were excluded from the European scheme.
JLR also relies heavily on access to China for sales of its luxury off roaders. In the first half of 2026, 58% of the cars made in the UK headed to Europe with 4% making their way to China.