Britain will not impose tariffs on Chinese electric vehicles, with Business Secretary Jonathan Reynolds warning that any such move could trigger damaging retaliatory measures from Beijing.
Reynolds argued that tit-for-tat trade responses from China would ultimately harm British automotive exports far more than an influx of cheap Chinese cars ever could.
The stakes are particularly high because of China’s importance as a sales market for Jaguar Land Rover, Bentley, Rolls-Royce (RR.L), Aston Martin (AML.L), and McLaren.
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.”
He added: “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.”
Reynolds further cautioned: “If you put trade protections up, you’ve got to understand that they’ll probably be reciprocated and you’ll lose out.”
Labour’s approach stands in sharp contrast to Germany, which is preparing measures to shield strategic industries from China, including new tariffs on hybrid EVs, while the EU has also taken a tough stance on Chinese imports.
Rather than blocking Chinese carmakers, Reynolds suggested Britain should seek to attract them, positioning the UK as a potential European bridgehead similar to how Nissan, Honda, and Toyota were persuaded to establish plants in the 1980s.
Reynolds pointed to Chinese firms such as BYD and Geely as carriers of market-leading technology that could be more advanced than what is currently 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.
He continued: “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.”
Chinese brands more than tripled their share of Britain’s new car market in the first eight months of 2026, accounting for 12 percent of sales, with brands such as Jaecoo and BYD becoming increasingly popular.
Security concerns have also been raised about whether Chinese EVs could collect sensitive data on behalf of Beijing, a risk serious enough to prompt the United States to pursue legislation banning Chinese EV imports outright.
Reynolds acknowledged those concerns but said the UK would weigh security risks against the technological benefits, handling each situation on a case-by-case basis rather than applying blanket restrictions.
He said: “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.”
Speaking at the McLaren plant in Woking, Surrey, Reynolds also confirmed he had received no request from JLR for a government bailout as the carmaker prepares to cut 4,000 jobs over the next two years.
Reynolds 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.”
He added that the British public should understand a business of JLR’s scale will periodically need to reassess its overall footprint, while remaining a fundamentally important part of the UK economy.
