Business Secretary warns that putting up trade barriers with Beijing would harm exports
Britain cannot risk tariffs on Chinese electric vehicles (EVs) because of the damage that Beijing would wreak on the UK economy in retaliation, the Business Secretary has warned.
Jonathan Reynolds said any attempt to defend UK carmakers from an influx of cheap Chinese cars would be met with tit-for-tat measures that would ultimately harm exports.
That could pose a bigger threat than the flood of imports because of China’s importance to Jaguar Land Rover (JLR), Bentley, Rolls-Royce, Aston Martin and McLaren.
Mr Reynolds said: “The fundamental thing is, where are our interests in the UK? Fundamentally we want to sell vehicles to China, so I’ve got to protect that export market.
“The UK automotive sector is in a different position to Europe as a whole because we are an export-led sector. JLR is a good example for US and Chinese sales.”
The Business Secretary added: “If you put trade protections up, you’ve got to understand that they’ll probably be reciprocated and you’ll lose out.”
Labour’s views contrast sharply with other countries facing an influx of cheap Chinese EVs. Germany is preparing measures to shield strategic industries from China, including new tariffs on hybrid EVs. At the same time, the EU has taken a tough stance on Chinese imports.
Mr Reynolds suggested that rather than erect barriers to Chinese carmakers, Labour would seek to embrace the automotive know-how of engineers from Beijing.
He said the Government could encourage Chinese EV makers to view Britain as a potential European bridgehead, just as Nissan, Honda and Toyota were persuaded to establish plants in the UK in the 1980s.
Mr Reynolds said Chinese firms such as BYD and Geely could offer access to market-leading technology, more advanced than what is available in Britain.
“It’s not just about the Chinese model of production in terms of costs. They have got some companies that you have to say are some of the most innovative in the world,” he said.
“Certainly, where parts of the sector are looking at what they might be able to do in future with it, I’m open to that conversation.
“I do think we should be doing everything we can to retain the incredible benefits of this sector. That’s got to mean being outwards-facing to the world, looking at where the innovation is and bringing it to the UK.”
China’s heavily subsidised EVs are making sharp inroads into Britain’s car market because of their low prices and modern designs.
Chinese brands more than tripled their share of Britain’s new car market in the first eight months of 2026, accounting for 12pc of sales, with brands such as Jaecoo and BYD becoming increasingly popular.
However, fears have been raised about the influx, with concerns that the vehicles may be able to collect sensitive data for Beijing.
While the US has pursued legislation to ban Chinese EV imports because of this, Mr Reynolds said the UK would monitor the risk, but it had to be weighed against the technological advancements they could bring to Britain.
He said: “I deal with a whole range of matters where we have to look in detail at some of the security issues alongside the investment trade-off.
“We do it on a case-by-case basis, so it’s not about one particular country. The US will do what they think is in the US interest. I’ve got to take a view for the UK as a whole.
“Security concerns are important, but we’ve got to look at where our interests lie and what we can do to bring in what is the most cutting-edge technology.”
Mr Reynolds, speaking at the McLaren plant in Woking, Surrey, also said he had no request from JLR for a bailout as the carmaker, which is Britain’s biggest, cuts 4,000 jobs in the next two years.
He said: “JLR has said they need to make that business the right size to be competitive. It’s not a specific problem or any request to Government in that regard.
“It’s important that the British public understand that a business that size will at times have to consider its overall footprint, but that they are still fundamentally a key part of the UK.”
Reference Link:- https://www.telegraph.co.uk/business/2026/09/16/britain-cant-risk-tariffs-on-chinese-electric-cars-reynolds/