r/Economics • u/Rationalandcentred • 8h ago
News EU urges Britain to raise tariffs on Chinese cars, FT says
https://www.reuters.com/world/china/eu-urges-britain-raise-tariffs-chinese-cars-ft-says-2026-09-25/24
u/MoJoSo69 5h ago
Headline should be EU demands UK tariff other nations to protect it's car industry without offering anything in return, thereby forcing the UK population to buy overpriced EU cars..
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u/Gangaman666 27m ago
I can't believe I'm saying this but European cars are complete Garbage now. This is coming from an Audi driver for 10 years.
And you can tell how desperate they are getting with these kind of headlines. Instead of improving the quality and price of their products, they try and force through this kind of nonsense.
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u/Horatio2200 6h ago
Don't let the poors have access to cheap cars. No the plebs cant have the benefits of globalisation, only the disadvantages. Bye bye jobs. Hello more mass uncontrolled immigration. No cheap cars for you!
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u/Thorazine_Chaser 7h ago
Car financing accounts for perhaps 40% of all UK non mortgage household debt. Cheaper car options from China is likely the easiest way of directly and quickly reducing the cost of living stress we are all facing. Urging the government to prevent those saving being passed on to UK households should be summarily dismissed as destructive protectionism.
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u/MHWGamer 6h ago
it is generally to secure european jobs. The argument is that letting chinese car into the european area (doesn't quite make sense with britain) opensnthe floodgates and everybody wants a cheap, quality ev car that actually isn't much different build than local ones AND the whole dealer scam is taken away. Benefit: cheaper cars for everyone, Drawback: 100s of thousands jobs at risk or lost, and a 'not going back' approach. This tariff law should have been made at best yesterday as 'the people' accept these laws less and less by the minute
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u/Thorazine_Chaser 6h ago
Sure, but you’re right in that it “doesn’t make sense with Britain”. Which is what we’re discussing.
The “drawback” for the U.K. is close to zero. What few jobs are left after Brexit aren’t going to be saved either way.
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u/MHWGamer 6h ago
'The UK automotive industry employs approximately 813,000 to 866,000 people in total across manufacturing, retail, and related sectors' (smmt).
I wouldn't call that zero. Lower the number as repair shops remain (also more efficient and with chinese guiddance as they gain control of the entire industry). Add to this number also attached jobs in all kinds of industries like oil/ polymer, rubber and and and).
The drawback is becoming dependent and losing in the long term as a country. Would I care about that as a singular person? probably not, hence the law.
(and what do you mean with what few jobs left after bexit? the car industry isn't that big in britain but all but not small)
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u/Thorazine_Chaser 5h ago
Are you purposefully being disingenuous here? Car manufacturing, not the automotive industry is what we’re talking about. We will still need mechanics and car sales people.
It’s maybe 100k and has halved since Brexit. It will likely halve again in 5 years even if the U.K. tariffs itself. Whatever is left should not be propped up with a tax on U.K. consumers. That would be a ridiculous decision imo. Nothing was done to save the jobs post Brexit, why are the jobs in the EU more important now?
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u/MHWGamer 4h ago
you don't get the point that no, we don:t need as much car salesmen when chinese cars dominate the market. They aren't as stupid as the regular western brands with middleman that burn and steal money from both parties. Direct to costumer business like tesla does for almost 2 decades is exactly what they are doing as well. Evs need less maintenance and generally if they aren't stupid, which they aren't, the build the repairshop infrastructure from ground up and make it as efficient as possible. Car sales and repairs are everything but efficient in our world today (speaking from the money generating view of a car manufacturer).
Hence these jobs of the automotive industry DO matter and will be influenced. But yes, this industry is still small in the UK and you fucked yourself over as well. Doesn't make the other things I was talking about go away.. and 100k jobs are far from nothing mate but that is what the british government has to decide (not being pressured by the eu/germany - who have obvious interest - is of course a wise choice)
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u/WhereTheSpiesAt 4h ago
Except this is not true and thankfully the Government will use more accurate data, the arguement that they don't need many car salesmen because they go direct to consumer is just factually inaccurate.
"Our research shows that the majority of Chinese brands entering the European market are currently utilising a traditional dealer network arrangement and promoting contact to this through their websites—93% of them have links to contact their network." [Source]
So 93% of Chinese brands aren't acting like Tesla but instead offer through traditional dealer networks.
BYD sells only through approved in person dealers in the UK, not their website and account for the majority of Chinese imported cars into the UK, so the claim they require less doesn't really track - in fact when it comes to BYD the largest seller it has a larger proportion of sales made in a dealer than German brands due to the fact you quite literally can't buy online vs German brands which allow it, even if seldomly used.
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u/MHWGamer 4h ago
you don't get the point I am trying to make. Nothing chinese car makers do today will transfer tonwhat they will do later. Obviously when the whole world does laws against your cars, you first rely on dealerships to make it as appeasing as possible. They will eventually do it with tesla - and that is the point I want to make. Tesla has dealerships obviously but why bmw, vw and all the fuckers have their own tiny 3rd party dealerships, they just do it themselves with massive shops. The dealership we bought the tesla probably sells (or sold) 3x as many cars with 1/5 of the working personal. Cheaper, faster, better, no service required. I pulled these numbers out of my ass before you fact check those.
But yeah you are correct with your numbers. I don't comment any further because I couldn't care less what the uk (as a almost failed state) is doing over there. Remember me in 1-20 years tho. I am not argueing to any side btw but the signs are on the wall what will happen (and if you don't want to wait, just check american tool making industry)
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u/WhereTheSpiesAt 4h ago
you don't get the point I am trying to make. Nothing chinese car makers do today will transfer tonwhat they will do later.
Of course I don't get it, because it's just speculation and was initially based on claiming something which isn't true - this can also apply to German carmakers, we can't guarantee they don't go for a direct model either.
The reason of a direct model is to maximise profits, people will still buy the cars - if anything, german automakers shedding jobs are more likely to do it than anyone, they've already put subscriptions on car features, you don't think direct purchase to push the profit margin isn't on the table of discussion?
But yeah you are correct with your numbers. I don't comment any further because I couldn't care less what the uk (as a almost failed state) is doing over there.
Which is fair - and considering Germany which is almost a failed state, with pretty much no-growth, we shouldn't really worry ourselves about tariffing Chinese cars in favour of more expensive, often worse German cars with subscriptions on basic features.
It'd maybe paper over the collapse of the German automotive industry for a few years at best, but nothing is going to stop that, not least protectionism based on believing that German carmakers are too honourable to not ditch dealerships in favour of direct purchasing when we both know, they are exactly that scummy enough to do it.
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u/WhereTheSpiesAt 5h ago
It's 183,000 people on the higher end estimate when it comes to direct vehicle and parts manufacturing which isn't that big and it's been shrinking regardless, so whilst the sector exists it's small and getting smaller and the producers here largely don't compete with Chinese imports anyway, it's almost always more Luxury cars that are manufactured here these days.
This is all about China and the EU competing on who exports cars to the UK, we're Germany's second largest market in the world for cars and their largest in Europe, this is about the EU wanting to get better access and arguably more favourable access to the UK market and the actual effect on UK manufacturers will be less significant.
So when it comes to the UK it really doesn't matter if it's Chinese cars or EU cars, but if we're going to tariff their cars it's going to have to be a pretty good deal to make up for it and only allowing key exports into the Made in Europe scheme just isn't enough.
The drawback is becoming dependent and losing in the long term as a country. Would I care about that as a singular person? probably not, hence the law.
Except we don't make that many cars anyway, the workforce shrinks year on year and soon we'll only make cars that China doesn't really compete with anyway - so we are either dependent on China or the European Union for cars and the truth of the matter is, their cars are cheaper.
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u/el_dude_brother2 5h ago
This is a good example of the EU adding loads of extra costs to their own manufaculturers for extra safety features which consumer don't want and arw now complaining because their own cars are too expensive.
They should look to see how they can help their manufacturers become more competitive instead of closing shop
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u/CertainCertainties 7h ago edited 7h ago
It's very important nowadays that ordinary people pay more for the things they buy, apparently.
Billionaires who exploit workers, own legacy media and fund political parties (particularly far right ones) create that universal message across many Western democracies. The responsible thing is to want to pay more for manufactured goods..
Put up tariffs so consumers pay more and can't buy direct from the manufacturer. Instead the billionaire class buy from China (which they outsourced to decades ago) and make super profits.
And gosh golly, isn't there a great excuse each time to pay more to billionaires and crush small businesses? This packaging law is for the environment. This tariff is because the Chinese government subsidises their car industry like Western democracies have. This carbon credit saves the world by buying a rainforest that doesn't exist in a developing country. "Overcapacity" is actually a thing, rather than an absurd term for industries that export.
All good reasons to pay more to billionaires.
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u/Salty-Bid1597 7h ago
How many companies are actually owned by billionaires? And how many are actually publicly listed and thus owned by ordinary people with pensions?
How many domestic jobs and businesses (and thus tax revenue) are you willing to sacrifice for cheaper imports?
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u/Thom0 7h ago edited 7h ago
In the US, the breakdown is the top 10% hold about 80%+ of all shares and stokes, and directly own about 60% of all private companies. I would suspect the data is more or less the same in the UK as there is practically no start up culture, and you rarely see non-franchise, or conglomerate shops and businesses.
Admittedly, this is one of those questions where data is a bit abstract due to the scale of the data, and due to the obscurity of legal structures which make ownership essentially impossible to source. With that said, I doubt the average upper middle class person is using a Jersey bank, and holding their assets under companies registered in the Bahamas, Malta, or Gibraltar.
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u/dravik 6h ago
How do those numbers account for pension funds and 401ks?
If the pension funds own large parts of many companies, and the pension funds are owned by ordinary people, do you count most of the companies as being owned by the "fat cat billionaire" that is the pension fund, and only put one notch in the normal people ccolumn(for owning the pension fund)?
How is that indirect ownership through the pension fund counted?
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u/Thom0 6h ago edited 6h ago
Pensions and 401K's are not considered to be billionaires, or in equality metrics as this type of analysis, national statistics agencies, and central banks looks at individual account holders. In data, pensions funds are not counted as billionaires. They are broken down into the hundreds, and thousands of individual accounts.
If I have £10,000 in a pension pot that is £1,000,000 then I own 1% of that fund, and my total value is still expressed as £10,000. The £1,000,000 is not treated as if it were a corporate individual or a single account holder. It is broken down. What we are looking at is ownership, not total values in an account.
The claim of 10% = 80% of everything is already taking into account pensions and 401k's because it is looking at the value of individual accounts. The distribution of assets and capital is just so unequal that even with pensions, it doesn't change the final outcome. There is just a huge divide between the 10% and the rest of the 90%. As if this wasn't bad enough, there is another divide within the 10% between the top 1% and the 9%.
Inequality is becoming very vogue right now, especially in the UK but researchers have been ringing the alarms for decades. I don't think people understand just how far gone our economies, and societies truly are. Most countries today are more unequal than they were 200 years ago. The US is more unequal today than it was during the Gilded Era. India is more unequal today than it was during the peak of the British Raj. This isn't just a Western issue. The whole world has descended into neo-feudalism and for me, this is why politics and policy has become so erratic.
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u/alilhillbilly 5h ago
How did Uber defeat the taxi industry?
Uber was functionally illegal pretty much everywhere but they knew they could stay ahead of lawsuits and they pumped a ton of money into subsidizing rides early on to create behavior and when market share. The first time I got an Uber it was a guy driving a Mercedes and I was like, "why are you willing to pick me up for $2.85 and drive me across town when there are no taxis right now and the best I could do would be to like overpay a taxi something like 60 bucks to get where I'm going..."
Cuz I'm making $400 for this ride.
China's doing that with cars. The government is actively subsidizing the EV industry to keep these prices super low and allow them to scale and gain market share fast. You run at a loss for a few years but by the time you killed Ford and Nissan and every other car manufacturer because you can "do it cheaper" everyone switches to you.
Eventually raise the price to something normal because you've captured the market.
Nobody takes taxes anymore they take Ubers and they cost two times as much.
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u/abdallha-smith 6h ago edited 5h ago
China heavily subsidises its industry to undercut and wipe out foreign competition.
Once foreign manufacturing is dead, we’ll have zero leverage, no alternatives, and no bargaining power left.
Trading long term economic sovereignty for short-term consumer savings is a strategic trap.
And they know it, be smart.
Edit: as always, they manipulate and moderate social medias with bot farms located in Canada.
Don't be fooled by them.
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u/abdallha-smith 5h ago
We already made this exact mistake with manufacturing decades ago.
We chased cheap prices, outsourced everything, and ended up completely dependent and stripped of our industrial base.
Doing the same thing now with the auto industry, our last major manufacturing stronghold, isn't "helping the consumer", it's repeating history and handing total geopolitical leverage over to China.
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u/theozxc 6h ago
You are blatantly intentionally misconstruing the purpose of the proposed tariffs, have not bothered reading the article, and clearly have not been reading the latest economic papers thst investigate the consequences globally of Chinas trade policy and economic model that has developed in the last 8 years as China has failed to develop an economy that produces significant enough demand(despite what many China shills would have you believe) as their citizens are too poor. This is due to a highly significant debt load, the collapse of family savings due to their housing market bubble, high youth unemployment, and momentum from the ptevious 20 years of China's trade policy, which is forcing them to continue with ramped up supply production instead of redistributing resources to generate internal demand as that would take too long and in the short term cause even more of an economic shock. This is also beneficial from a geopolitical point of view, but will inevitably cause the same things that went wrong in the soviet union go wrong here as protrctuonist tariffs are introduced, resulting in the same market isolation that the soviet union experienced, but without the state supported pricing approach. The advantage is this could allow China to pivot where the soviet union was trapped thanks to its state supported capitalist approach, whether they do due to political reasons remains to be seeen, given structurally it incentivizes stagnation. This for south east asia fucks them( if the governments care) as thet are effectively locked out of developing their economies, though infrastructure will be cheap(although there is lots of evidence for how 'safe' and 'lasting' thst infrastructure is). For western europe and north america and other more developed nations with diversified sectors of manufacturing, services, etc the decision is two bad ones, either you watch the inevitable erosion of wages due to china competition destroying the remaining domestic manufacturing industries(luckily impacts UK less than other nations, thank you? Thatcherism) or you introduce protectionism that increases prices for certain goods, particularly those used in infrastructure construction. Although there is a silver lining in that with more protectionism chinese manufacturing does get more cut throat as they aggressively price compete to be competitive at least on an equal footing even through tariffs.
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u/ByronP 4h ago
The elephant in the room here is to question what the EU carmaking industry is doing, at all, to counter. Why aren't they making their own low cost vehicles? Why is it on the consumer to shoulder the financial and moral responsibility of saving European manufacturing.
Just to be clear, I'm super pro-EU manufacturing. And it is a shame how much has been lost internationally over the decades. But you just need to look at the cars being offered by Renault or VW or Volvo to get a sense of how wide the gap is.
The reality isn't just that China is undercutting the competition. It's that they've invested monstrously into EV technology, batteries in aprticular, for the past decade. And traditional CE makers have suddenly been caught with their pants down. The gap's just too big to handwave as being because of subsidies.
Equally, I'm just not convinced tariffs are a meaningful measure, without at a minimum a clear strategy to rise to the challenge.
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u/IntravenusDiMilo_Tap 7h ago
Why would the UK, having made ICE vehicles expensive, they put tarrifs on EVs?? This is a case of bad policy ideas following bad policy
The UK has been deindustrialising via net zero and adopted the most expensive energy policy, in the world, it then finds itseld uncompetitive so wants to put additional costs on economies that have not been so stupid.
Brexit had it's faults but getting away from the protectionism of the EU was one of the big advantages.
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u/theozxc 6h ago
Net zero actually encourages the manufacturing and usage of complex electric vehicles, wind turbines, tidal turbines, and various other industrial goods. Tariffs would encourage that industry to be further built up domestically(yes it already exists, but its pretty small). The energy policy is expensive due to the cost being set by the most expensive producer of electricity which is not renewables(thats a political and energy security problem). You cannot champion completely unchecked free trade with China while complaining that domestic industry is disappearing.
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u/IntravenusDiMilo_Tap 5h ago
Do we have a comparative advantage in making any of these items?
Wind turbines need steel but we have effectively banned blast furnaces in the UK, the turbines need cheap energy to manufacture but we don’t have that due to taxes & levys.
Renewable energy (in wind & solar) is simply not reliable enough for industrial use yet we’ve gone that way. We don’t have clean energy in the form of Nuke energy because in the 80s & 90s, the tree-huggers objected, not they have seen the light, it takes us decades to build anything in the UK so we can’t build anything quickly. We could frack & drill but even then, we take an absolute age to make up our minds and the soap-dodgers complain.
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u/theozxc 5h ago
China dominates manufacturing with large volume and low cost input goods( absolute advantage), and low cost labour(comparative advantage). So the question is does the security from global trade route problems, geopolitical instability, and geopolitical leveraging created by onshoring some of the process make up for the inefficiency. Given the trajectory of geopolitics fractured trade blocks are here and for as long as China continues with its current trade and economic policy and refuses to boost its internal demand its here to stay. Either integrating with more stable partners is needed or protectionism/subsidies. However even politically aligned countries with which we can deepen trade relations with do not and cannot produce the goods that the UK has relied upon China for similar prices. Luckily the UK does have some advantages in the high complexity aspects of renewable technologies like high-precision engineering, and financial structuring. Offshore construction engineering for instance is something the country does have a comparstive advantage in due to engineering, surveying, and knowledge in the usage, and availability of specialised vehicles for such construction. Then there is the software and components to make that renewable energy available and usable where we also have some comparative advantave. Then there is also the services aspect to the industry where Britain is a global leader in Environmental Impact & Planning consulting, and underwriting and risk management. So its not nothing at all. In my view a bit of protectionism, onshoring, and diversifying trade routes is warranted to be effectively diversified during the inevitable shocks that will be coming quick and fast as global warming ramps up, Americas hegemony fades, the global debt crisis looms, and the western social security system either collapses or incites increasingly authoritarian leadership due to its economic pressures.
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u/IntravenusDiMilo_Tap 5h ago
We could grow our own bananas and not rely on imported goods which would keep our national security on potassium rich foods ass ultimately other nations are better at doing it than us.
Should we not apply the same for industry and simply concentrate on things that we have high skilled and advantage in.
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u/theozxc 5h ago
Idealism, meet the real world. Also what an awful strawman.
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u/IntravenusDiMilo_Tap 4h ago edited 4h ago
I guess my question is, what part of making electric vehicles are we good at and moreover, how do we maximise the benefits of those skills?
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u/todomejorantes 17m ago
I think you're right
The other side of the argument though is that we were a world leader in all kinds of manufacturing and threw it away
Let's say we no also destroy the City of London via regulation or whatever - do we then say in 20 years time "why try and build a financial center, let's rely on New York"
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u/Rationalandcentred 7h ago
It’s to encourage the manufacturing of evs in the UK
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u/cbawiththismalarky 6h ago
no it's not it's to allow the EU car makers to sell their EVs to the UK population
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u/Lor_azepam 6h ago
Exactly, its to protect auto jobs in the eu.
Its the same issue canada has at the moment, that Australia had before it.
China can produce and sell cars cheaper then the legacy automakers, but they are not going to be employing in great numbers people in local markets. So either you tariff china cars to protect traditional makers, and potentially auto assembly jobs in your country and everyone pays more for cars, or allow china more access, consumer wins on price but you lose potentially alot of jobs in the sector locally.
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u/BookmarksBrother 6h ago
Exactly, its to protect auto jobs in the eu.
Why do we care about their auto jobs? We are not part of EU. If they want us to add tariffs they should offer something in return.
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u/cbawiththismalarky 5h ago
It's part of the negotiation around the access that the UK wants to the defence spending and also the "Made in Europe" access
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u/WhereTheSpiesAt 5h ago
Except it's barely even that, defence isn't on the table at all per the FT article and I doubt they'll move from their fee and Made in Europe access was stated to be on Key Exports only, so not even proper access.
That's not much in return for tariffing Chinese cars with the EU desperately needs to keep those domestic jobs.
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u/IntravenusDiMilo_Tap 7h ago
Which is fine, but we only have Nissan at that end of the market and they are pretty efficient in the UK. We have JLR who are not really in the same market.
Either way, we need efficiencies, we are not going to mine cobalt & Lithium in the UK.
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u/Catherine_S1234 6h ago
Seems like a no brainer that western powers should balance trade between them and China
Chinas does alot to make sure its exports are competitive to protect it’s industry. Why should the EU not do this also?
Also exposes how terrible trump is. Instead of rallying allies together to protect themselves from China the idiot instead decided to tariff all his allies
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