LONDON — Germany wants the U.K. to raise tariffs on Chinese electric vehicles in exchange for protection from Made in Europe rules, according to a person familiar with Berlin’s position. Friedrich Merz’s government believes the move would show reciprocity on trade and counter accusations from other EU member states that Britain is trying to “cherry pick” the benefits of EU membership, said the person, who was granted anonymity to discuss closed-door talks. It comes as Prime Minister Andy Burnham met with the German chancellor on his first official visit to the country this week.
Burnham and Merz were due to talk about possibilities for Britain’s future relationship with the EU — after the British prime minister put rejoining the bloc back on the table of U.K. politics for the first time in a decade. Berlin’s position on EV tariffs is significant as Germany has broadly backed a tolerant policy towards the U.K. on trade matters since Brexit — in contrast to more hard-line positions taken by countries like France. The EU is in the process of drawing up new Made in Europe rules that would favor European producers over those outside the bloc — in response to trade practices by competitors like China and the United States.
The U.K. is worried that the measures will hit British business — especially automakers — and wants assurances from Brussels that it will get an opt out. If Berlin gets its way, those assurances could be dependent on emulating EU trade policy with regard to Chinese EVs. Germany’s vaunted car industry, arguably the jewel in the country’s economic crown, has faced stiff competition from Chinese imports in recent years.
EU countries have accused China of dumping low-cost, state-subsidized electric vehicles into the European market and in December 2024 imposed countervailing duties as high as 35.3. percent on some manufacturers. Industry Commissioner Stephane Séjourné accused China of pursuing a deliberate “predatory strategy” with state subsidies to the tune of €10,000 per vehicle. The U.K.’s Trade Secretary Jonathan Reynolds told POLITICO last month that the government was keeping tariffs “under review, to be frank, more closely than lots of other issues” and that “different parts of our own sector want different things from” the government’s policy.
Hamish Falconer, the U.K.’s minister for European relations, told POLITICO's Brussels Playbook Podcast this week that he was “surprised” at reports tariffs might be a condition of Made in Europe opt-outs, adding: “That’s not the kind of conversation that I’m having with my European counterparts.” Going ahead with higher tariffs risks alienating Beijing, which has expressed serious concerns about the policy. It would also raise the price of electric vehicles on the market, potentially making it harder for the government to meet its decarbonization targets.
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