The UK may introduce tariffs on vehicles built in China as sales of Chinese brands continue to rise, according to a new report. The potential move would bring Britain closer to the European Union’s approach to Chinese electric vehicles.

Pressure is reportedly coming from the EU, which has warned British ministers that the UK could be excluded from the “Made in Europe” scheme if it does not impose similar measures. Losing access to that arrangement could increase the cost of exporting vehicles made in Britain to EU markets.

Tariff proposal reportedly under development

The Sunday Times reports that UK business secretary Jonathan Reynolds has begun preparing a tariff package ahead of a UK-EU summit scheduled for next month. Britain has so far been reluctant to take such action, but the rapid growth of Chinese vehicle sales appears to have increased the pressure to respond.

The scope of any possible UK tariffs has not been established. The EU measures target electric vehicles from China, while it remains unclear whether British policymakers are considering tariffs only for EVs or for other types of vehicles as well.

Chinese brands gain ground in UK sales

September sales data illustrates the scale of Chinese automakers’ recent progress. Almost one in four new vehicles sold in the UK during the month came from China.

The Jaecoo 7 was the country’s top-selling vehicle, with 10,812 units sold. That result placed it ahead of the Tesla Model 3 and marked the second time this year that the model had topped UK sales.

In Britain, the Jaecoo 7 is available with either a 1.6-liter turbocharged gasoline engine or a 1.5-liter plug-in hybrid powertrain. The source does not specify whether possible UK tariffs would apply to combustion-powered and plug-in hybrid models alongside EVs.

EU tariffs have shifted Chinese automakers’ focus

Electric vehicles imported from China into the EU currently face tariffs as high as 45 percent. Following the introduction of those duties, Chinese manufacturers increased their focus on plug-in hybrid vehicles, according to the report.

EU lawmakers are reportedly considering whether to expand the measures to cover hybrids as well. That possibility adds further uncertainty for automakers selling Chinese-built vehicles across European markets.

The Society of Motor Manufacturers and Traders said last week that the “Made in Europe” rules pose a threat to British vehicle production. If the latest report is accurate, the UK could be preparing to align more closely with the EU on Chinese vehicle tariffs despite the continued growth of Chinese brands in its domestic market.