China warns Britain of countermeasures if it curbs Chinese electric vehicles
Key Facts
China's commerce ministry warned in a statement issued on 19 October 2026 that it would take firm countermeasures if Britain proceeded with restrictions on Chinese electric vehicles, pledging to protect its industry's interests. The ministry said: "If Britain insists on taking restrictive measures against Chinese electric vehicles, we will take firm countermeasures to safeguard the legitimate rights and interests of Chinese industry." The statement responded to reports quoting British minister Sarwar as calling for coordinated action with the European Union to counter China's dominance in the automotive industry. According to the ministry's account of those remarks, the minister said Britain and the European Union must act together on the issue. He added that discussions on imposing additional tariffs on Chinese electric vehicles were continuing with European partners. Beijing thus tied its countermeasures to London imposing the restrictions under discussion.
China's commerce ministry urged Britain to abide by World Trade Organization rules and think carefully before taking any action, calling on it not to follow the European approach. It said in its statement: "We urge the British side to abide by World Trade Organization rules, think carefully before acting, and not follow the European Union." Alongside its warning over restrictions, the ministry described cooperation between the Chinese and British automotive industries as based on complementary strengths and mutual benefits on an equal footing. Jonathan Reynolds had said in an earlier British position reported by Reuters that domestic industry had not submitted complaints to Britain's Trade Remedies Authority. The absence of such complaints provided context for London's earlier reluctance to follow the European approach of imposing tariffs. British concerns over the consequences of taking action include the possibility of Chinese retaliation against Jaguar Land Rover, according to Investing, citing a Times report on concerns among British officials.
The European tariffs stem from the definitive regime adopted in October 2024 for electric vehicles made in China, with a duration of 5 years, according to Reuters. The countervailing duties under this regime are added to the European Union's basic import tariff on cars. That basic tariff is 10%, making the countervailing measures an additional tariff burden on the imports covered. When the duties were adopted, Reuters cited the European Commission's estimate that Chinese brands' share of the European market had risen to 8%. That share was less than 1% in 2019, according to the comparison the Commission provided at the time. The European regime was thus adopted against a backdrop of Chinese brands' growing market presence, combining the basic tariff with countervailing duties set for 5 years.
In an earlier episode of the European-Chinese trade dispute, Beijing announced provisional anti-dumping measures on brandy imports from the European Union on 8 October 2024. Those measures extended to the European drinks sector as the trade dispute between the two sides escalated. During that day's session, Remy Cointreau shares fell 8.7%, according to Reuters coverage published at the time. The shares' decline coincided with China's announcement of provisional measures on European brandy. The episode dates to the round of escalation in October 2024, which included Chinese trade measures outside the automotive industry.
On the path towards a trade settlement, European guidance on minimum price offers sets conditions for assessing a negotiated alternative to tariffs on Chinese electric vehicles. According to Reuters, any minimum price offer must eliminate the injurious effects of subsidies. The European Union also requires the offer to have an effect equivalent to that of the tariffs. The European acceptance criteria thus combine addressing the effects of subsidies with maintaining the effect sought by the countervailing measures. These conditions define the framework within which price offers are assessed as a negotiated alternative to tariffs.