EU urges Britain to raise tariffs on Chinese cars, FT says

Sept 25 (Reuters) - Brussels has told British Prime Minister Andy Burnham that Britain needs to raise tariffs on Chinese cars and align more closely with EU trade policy to avoid “made in Europe” barriers on key exports, the Financial Times said on Friday.

In response to lobbying for equal treatment for British products, the bloc told London its best solution would be to join the EU’s customs union, the newspaper said, citing two people familiar with the matter.

“A customs union would solve most of the problems of ‘made in Europe’,” an EU official told the paper. “And also the question of tariff differences, which leads to fears the Chinese could avoid our tariffs by routing through the UK.” 

In response to a request for comment, a government spokesperson said, “We always put trade measures in place independently and based only on the UK’s economic interests and those of industry."

"However, Europe and the UK face many of the same challenges, which is why it is vital we protect trade flows between us," the spokesperson said.

Burnham said this week he would make the case for Britain to be considered a "trusted partner" under the bloc's proposed "Made in EU" rules, warning that the UK's exclusion could damage its car industry.

The "Made in Europe" policy aims to curb reliance on Chinese components by prioritising European-made goods – a worry for the British auto industry which feeds parts into EU supply chains and sells cars across the bloc.

The bloc would use every available tool to reduce its "unsustainable" trade deficit with China, European Commission President Ursula von der Leyen told the European Parliament in her 'State of the Union' address this month.

Reuters could not immediately verify the report. The European Union and the British Foreign Office did not immediately respond to Reuters requests for comment outside business hours.

(Reporting by Rhea Rose Abraham in Bengaluru; Additional Reporting by Ruchika Khanna; Editing by Christopher Cushing, Clarence Fernandez and Louise Heavens)