The head of Mercedes-Benz and president of the European Automobile Manufacturers’ Association has cautioned against removing the UK from the EU’s Industrial Accelerator Act, commonly referred to as the Made in Europe law. The legislation is designed to shield European manufacturers from external competition, primarily targeting China’s significant trade advantage with the bloc. Ola Källenius argued that such exclusion would represent a deliberate decision to undermine competitiveness across the entire automotive sector in both the EU and UK.
The Made in Europe law aims to establish preferential conditions for companies operating within the EU’s framework, potentially restricting access for closely aligned trading partners including the UK, Norway, Turkey, and Switzerland. Political leaders are targeting a final agreement on the measure by December, with discussions ongoing regarding the UK’s participation status. UK Prime Minister Andy Burnham has been actively campaigning for inclusion in the framework, though efforts have encountered opposition, particularly from France.
The Prime Minister plans to address the matter at a scheduled UK-EU summit, hoping to secure favorable terms despite the compressed timeline for negotiations. Earlier this month, the EU suggested that aligning with EU tariff policies on Chinese vehicles could strengthen the UK’s position for inclusion. UK Business Secretary Jonathan Reynolds, however, indicated that adopting such tariffs is not currently being pursued.
Separately, the automotive industry association is urgently requesting a postponement of planned 10% tariffs on electric vehicle trade between the EU and UK. These tariffs are scheduled to take effect in less than three months under the post-Brexit Trade and Cooperation Agreement and were designed to encourage battery production capacity on both sides. The original implementation date in 2024 was suspended for three years, and manufacturers are now seeking an additional two or three-year extension.
Meanwhile, rising concerns about China’s trade surplus with the EU have prompted new agreements to limit hybrid electric vehicle sales, signaling broader tensions in European trade dynamics.
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