France and Germany propose UK access to Made in Europe if London matches EU China tariffs

The draft

The proposal, contained in a draft agreement seen by the FT, would extend eligibility beyond the 27 EU member states to "other European partners that were part of the EU internal market on 1 January 2020". That would bring UK carmakers within rules intended to restrict access to subsidies and public contracts to European companies, part of the proposed Industrial Accelerator Act. Japan, South Korea and Turkey, which have also sought access for their carmakers, would remain outside.

The condition is explicit: Britain would have to adopt "EU trade protection measures", including tariffs on Chinese electric vehicles. The text has not been finalised. It follows months of talks between Paris and Berlin on the future of the European car industry, including combustion engine rules and preferential treatment for European-made vehicles and batteries. Germany pushed for the UK and other trading partners to be included; France backed a stricter EU-only approach.

Why the tariff condition matters

Britain charges its standard 10% import duty on Chinese-made cars, electric or not, with no China-specific addition. The EU's combined duty reaches as much as 45.3% depending on the manufacturer. Under that system, BYD faces an additional 17% duty, Geely 18.8% and SAIC 35.3% on top of the standard 10%, Fleet News reported. The EU duties apply only to EVs built in China, so cars from BYD's planned Hungarian plant would escape them.

Chinese brands have expanded quickly in the UK, where they do not face the additional EU tariffs. They took 23% of British new-car sales in September, according to Bloomberg. The Jaecoo 7 was the country's best-selling new model that month, with 10,814 registrations ahead of the Tesla Model 3 and Ford Puma, Fleet News reported.

Duties have not stopped the advance elsewhere. Chinese models made up 14.2% of EVs sold in western Europe between January and May 2026, about one in seven, despite EU tariffs in place since 2024, according to Schmidt Automotive Research data cited by The Diplomat.

London's response

A UK government official said: "This is a Franco-German proposal and there is still a European process to run, but if confirmed, we welcome the objective to have UK included" in Made in Europe, calling it good news for the British car industry.

Trade Minister Anas Sarwar said Britain and the EU must "work together and act in lockstep" to counter China's dominance in carmaking, remarks Politico described as the clearest signal yet that London is prepared to align. Business Secretary Jonathan Reynolds has said higher duties on Chinese EVs are "under review". The government says no new tariffs have been introduced and no final decision made.

The Times reported on 4 October that the UK was preparing to impose levies to meet the EU's demand. Officials weighed Chinese retaliation against Jaguar Land Rover but judged being dropped from Made in Europe to be more damaging, the newspaper said.

Industry reaction

SMMT chief executive Mike Hawes called reports of trade restrictions unconfirmed and said any such consideration would need to be based on evidence and follow due process. Professor David Bailey of the University of Birmingham told the Mirror that tariffs would slow rather than stop the Chinese advance, and that manufacturers may absorb much of the cost to protect market share.

Some Chinese brands say their investment plans are unchanged. "Tariffs come and go, but it won't change our investment in the United Kingdom," Victor Zhang, UK managing director of Jaecoo and Omoda, told reporters. "We are here to stay."

The UK and EU automotive industries have argued that excluding British manufacturers would disrupt highly integrated supply chains. UK carmakers already face stronger Chinese competition and higher US tariffs, which have contributed to significant production cuts.