China issued a warning to the United Kingdom following its recent trade agreement with the United States. Beijing accused the UK of aligning with Washington in a move that could force British firms to exclude Chinese products from supply chains.
The UK-US deal, signed last week, provides limited relief from US tariffs on British automotive and steel exports. However, it includes strict US national security conditions. These provisions require British companies to ensure transparency in supply chains and ownership structures. Beijing interprets these clauses as direct attempts to curb Chinese economic influence.
China Sees Agreement as Targeted
China’s Foreign Ministry criticised the deal, warning that it undermines multilateral trade norms. In a statement to the Financial Times, it said: “Cooperation between states should not be conducted against or to the detriment of the interests of third parties.” Beijing said the trade pact violates the principle that international deals must not target third countries. Chinese officials consider the deal part of a broader US strategy to isolate China from global markets.
Foreign Ministry spokesperson Lin Jian added, “The basic principle of international cooperation is to avoid harm to other countries’ interests. Beijing’s concerns highlight its growing unease over US pressure on allies to exclude China from critical supply chains.
Security Requirements Raise Economic Barriers
The UK-US trade agreement mandates supply chain scrutiny and limits on foreign ownership. These measures apply particularly to the steel, automotive, and pharmaceutical sectors. Under the deal:
- Tariffs on British car exports to the US will fall from 27.5% to 10%
- The tariff reduction applies to a quota of 100,000 vehicles annually.
- Tariffs on UK steel and aluminium exports are lifted.
- The relief depends on meeting US security conditions.
These terms suggest a direct restriction on Chinese firms supplying parts or owning stakes in British manufacturers. Zhang Yansheng, senior researcher at the China Academy of Macroeconomic Research, said the clauses were “not fair to China.” He called them “poison pills”, worse than tariffs.
UK Balances Economic Interests
The UK government defended the agreement, saying it protects British jobs and national security. A government spokesperson said, “Trade and investment with China remain important to the UK.” Downing Street stressed that the trade deal was not intended to provoke China but to ensure economic resilience.
The timing of the deal is sensitive. Prime Minister Keir Starmer’s government has sought to rebuild ties with China. Chancellor Rachel Reeves visited Beijing earlier this year to revive economic and financial dialogues. The visit marked the first formal engagement of its kind in six years.
Despite efforts to reset the relationship, Chinese officials criticised the UK for accepting the US terms. They view it as a setback in bilateral cooperation. The agreement’s clauses may now complicate Britain’s diplomatic balancing act between Washington and Beijing.
China Doubles Down on Economic Strategy
In response to rising external pressure, China accelerated its “dual circulation” strategy. This model focuses on increasing domestic production and reducing reliance on foreign suppliers. Chinese ministries are channelling resources into green technologies and advanced manufacturing.
Beijing is urging state-backed firms to replace foreign components with local alternatives. The policy aims to insulate China’s economy from trade restrictions and supply chain disruptions. Analysts see this approach as a long-term response to growing geopolitical tension.
Deal Opens Access for US Goods
While the UK gained partial tariff relief, the US secured new access for its exports. Under the deal:
- The UK agreed to liberalised quotas for US beef and ethanol
- Cooperation will deepen in pharmaceuticals and manufacturing.
- These areas require compliance with US security standards.
The agreement advances American economic interests while placing obligations on UK industries. Observers note that the balance of concessions heavily favours Washington.
Strategic Trade Choices Ahead
The developments expose the difficult trade-offs confronting Britain. The government must secure access to US markets without alienating major trading partners like China. UK companies now face compliance demands that could reshape their sourcing strategies.
The trade pact highlights the growing role of national security in global economic policy. As geopolitical competition intensifies, countries are rethinking long-standing trade practices. Britain’s position reflects these shifting priorities and the challenge of navigating between major powers.
