TurningCircle
2 November 2026updated 09:08

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Policy

MPs want a tariff plan for Chinese cars and a firewall for connected vehicles

A Commons committee says ministers should have tariffs ready if China will not trade fairly, and treat connected cars as a security risk. Both would reach UK buyers.

By The TurningCircle Team 6 min read

The Business, Innovation, Science and Trade Committee published its report on China today, and two of its recommendations land on the car market. The first asks the government to have a tariff regime ready to use if China keeps subsidising its industry and refuses reciprocal access. The second asks it to treat connected vehicles as a security problem in the public fleets that cannot afford to lose control of them.

"China and the UK economy: the case for risk-managed growth" runs to more than 100 pages and is the tenth report of this session. The government has two months to respond. Its central finding is that ministers promised a strategic, long-term and consistent China policy in 2024 and have not produced one.

"Britain's businesses cannot plan for the future when the Government keeps making up its China policy as it goes along," said Liam Byrne, the Labour MP who chairs the committee. "Britain must shape its own relationship with China, or risk having that relationship shaped for us in Washington or Beijing."

The tariff recommendation, in plain terms

The committee proposes a traffic light system: red for a narrow list of sovereign capabilities closed to Chinese trade and investment, amber for deals with risk mitigations attached, green for open engagement. The trade recommendation goes beyond the zones. The government, it says, should prepare "a tariff regime for deployment if China refuses to take action to re-balance its economy, continues to unfairly subsidise Chinese industry and fails to offer fully reciprocal access to its markets". That is an instruction to build the instrument rather than to use it, and no duty rate appears in the conclusion.

Cars are the sector where the instrument would matter most, because it has already been used next door and because Britain's exposure has grown quickly.

The market the tariffs would land on

The report notes, citing the Financial Times, that Chinese car brands' UK market share doubled between March 2025 and March 2026. The registration data shows the same movement over a longer run. Add the fifteen Chinese-owned marques in SMMT's by-brand table and the total is 304,759 cars in the year to the end of September, or 17.5% of the 1,739,271 registered. At the same point in 2025 the same marques accounted for 137,237 cars and 8.7% of a smaller market.

That count leaves out Geely-owned brands with European names, Polestar, Smart and Lotus among them, so it understates rather than inflates the total. MG, at 78,930 cars, is the largest marque in the group, ahead of BYD on 68,405 and Jaecoo on 58,737.

The model table makes the point more sharply than the brand totals. The Jaecoo 7 has 39,474 registrations this year, second only to the Ford Puma on 42,926, a gap of 3,452 cars. In September it was the best-selling car in the country outright, with 10,814 registrations, ahead of the Tesla Model 3 on 9,929. A Chinese-made petrol and plug-in hybrid SUV topped the table in the month Britain registered a record number of electric cars, a detail we covered when the September data landed.

The report adds a figure that puts the electric side in context: Dr Sam Geall and Professor David Tyfield told the inquiry that "in 2025, Chinese-built models accounted for about 30% of the more than 470,000 EVs sold in the UK". The UK's electric transition is already partly a Chinese supply story, which is the dependency the committee says it is worried about.

Brussels has run the experiment the committee is describing. The EU imposed duties on Chinese-made electric cars in October 2024 ranging from 7.8% to 35.3%, and the report records that Chinese-made EVs still raised their share of the EU market to 14.2% in the first five months of 2026. Tariffs changed the price of the cars without stopping the trend.

The price of joining the European scheme

The report's most consequential car passage is about the EU's Industrial Accelerator Act, known as Made in Europe. The EU has proposed including the UK on a reciprocal basis, and the SMMT told the inquiry that the criteria for the automotive sector are "far more restrictive" than those for other sectors and could threaten "the viability of the UK automotive sector".

The condition behind that is alignment. France and Germany have reportedly said Britain would have to match EU tariffs on Chinese cars to be included, the trade-off we set out when Stellantis and Renault made their case. Number 10 has left the option open while calling the terms premature, and the Chinese embassy has said it is firmly opposed to any discriminatory practice involving tariff rises. The committee's recommendation gives ministers the machinery to take that option without starting from scratch.

The connected car problem

The second recommendation is aimed at vehicles already on the road. The report sets out the risk in its evidence: manufacturers can send software to connected vehicles over the air, which creates the possibility of a maker controlling or disabling a car remotely. The committee calls the remote control of connected vehicles "a particular vulnerability, given the potential risk to life". It cites Tor Indstøy, the Telenor risk specialist who founded the Lion Cage Project, who found that a 2025 Chinese-made Yutong bus had critical functions connected to the internet, including a component that could reach the battery or engine. Buses of that type, the report says, "can be stopped or manipulated directly from China".

Its answer is not a ban on Chinese cars at the showroom. It recommends a plan with UK telecoms firms to monitor data traffic between connected vehicles here and foreign entities, starting with government, defence and emergency service fleets. It wants connected components from high-risk jurisdictions banned in critical national infrastructure, connected vehicles included, with existing kit mapped and replaced. And it wants a rule limiting vendors to data needed for maintenance, not data that lets them disable the vehicle. Progress would be reported to Parliament in a year.

That is a fleet story before it is a consumer one. Police forces, ambulance services and councils buy in bulk on multi-year cycles, so a procurement rule on connected components would shape their choices long before it reached a private buyer's shortlist.

What it means from the pavement

For a private buyer, nothing changes this morning. Select committee reports are recommendations, not law, and the government has two months to answer this one. The current position is still the one we described in September: the standard 10% import duty and nothing on top, which is a large part of why a Chinese-brand car can undercut a European one by several thousand pounds.

Two things could move that: the EU's Made in Europe package, which turns a trade principle into a price of market access, and the committee's tariff regime, which would give ministers a tool to use if they decided openness had become too expensive. Neither is a decision yet, and the gap between a prepared instrument and a deployed one is where most trade policy lives.

The honest read is that the report changes the terms of an argument rather than its outcome. Britain has spent two years arguing that tariffs would invite retaliation against Jaguar Land Rover and other exporters, and that argument still holds. What is new is that a Commons committee has now put the opposite case in print, with a mechanism attached, and tied it to the European deal that the car industry wants. For anyone weighing a Chinese-brand car against a European one, that is the policy risk behind the price.

Sources