Britain suddenly gets tough on China as it craves a Trump deal

LONDON — Britain insisted it would never be forced to choose between the U.S. and China. But as ministers hustle for a carve-out from Donald Trump's tariffs, a string of policy moves suggest the country is starting to pick a side.

The U.K. is taking a “calm and steady approach to secure growth and international trade," a government spokesperson said Tuesday. "The U.K.’s pragmatic relationship with China will always be rooted in the interests of working people in the U.K.”

But the signs of a shift are getting harder to ignore.

After years of frosty relations with Beijing, Labour took office last July promising a reset.

In January, Chancellor Rachel Reeves revived a long-dormant Economic and Financial Dialogue, pitching it as a platform for “respectful and consistent future relations with China.” A visit to China for U.K. Prime Minister Keir Starmer is on the cards.

Fast-forward four months, however, and in rapid succession the government has forced Chinese company Jingye to give up control of British Steel; launched a review into the tax rules fueling e-commerce giants like Temu and Shein; and moved to ban solar panels linked to forced labor in Xinjiang from state-backed energy projects. 

When British MP and China critic Wera Hobouse was refused entry into Hong Kong, the U.K. called the news “deeply concerning” and took it up directly with Hong Kong's governor.

The change of tack hasn't escaped the attention of China-watchers.

“After several months of frenzied engagement [with China], there has been a clear shift to rebalance against the supremacy of the short-term growth mission, and to bring considerations of geopolitics and sovereignty back to the forefront,” said the Australian Strategic Policy Institute’s U.K. foreign policy lead Sophia Gaston. 

As No. 10 Downing Street tries to prove to the U.S. that it’s a like-minded nation, here are all the moves that could send a signal to Washington.

British Steel

Tensions with Beijing flared when the Chinese owner of British Steel, Jingye, threatened to close down the U.K.’s  last functioning blast furnace steel site, putting around 3,000 jobs at risk. 

Despite multiple attempts by the government to pay for the resources needed to keep the site running, Jingye snubbed a rescue plan, prompting intervention in a politically-sensitive industry. The discussions ended in a dramatic recall of parliament, where headline-grabbing emergency legislation was created to seize control of British Steel.

Business Secretary Jonathan Reynolds said there would now need to be a high bar for trusting Beijing’s businesses in the U.K.’s steel sector — while Beijing accused the U.K. government of "politicizing trade co-operation."

Worries over Chinese stakes in steelmakers aren't limited to the U.K.

U.S. tariffs on steel and aluminum were imposed in Trump’s first term, citing national security concerns. Although the two nations came to an agreement in 2022 under the Biden administration, Trump is again on the warpath.

Given the U.K. makes several steel components for the U.S. defense industry, Gaston said earlier this month, “taking British Steel back into British hands from Chinese ownership will be received favorably by the Trump administration.” 

Solar import rules

Britain’s green transition has long depended on cheap Chinese solar panels — with a Guardian investigation finding up to 40 percent of the U.K.’s solar farms were built with panels linked to Uyghur forced labor.

Energy Secretary Ed Miliband last week bowed to pressure from lawmakers and human rights groups, tweaking legislation to ban state-run GB Energy from using solar panels linked to Chinese forced labor. 

The move sparked fury from the Chinese embassy, which issued a statement accusing “certain individual U.K. politicians [of being] obsessed with making up stories of various sorts.”

“They are trying every means to slander and smear China and to impose the label of 'forced labor' on China,” the embassy said. “Any attempts to politicize economic and trade issues and to disrupt normal China-U.K. trade will harm oneself as well as others.”

The move follows the U.S.’s own Uyghur Forced Labor Prevention Act, introduced in 2021, which bans imports made in Xinjiang from entering the U.S. The U.S. rules assume that all imports are produced using forced labor unless proven otherwise.

While Britain’s proposals aren’t as stringent, some U.K. lawmakers are in favor of replicating the tougher American approach.

Shein and Temu review

As Chinese e-commerce powerhouse Shein gears up for a major listing on the London Stock Exchange, Chancellor Rachel Reeves has announced a review of a tax loophole that many argue allows its business model, and that of fellow online giant Temu, to thrive.

The move could lead to a clampdown on de minimis rules, which currently allow the firms to import cheap packages into the U.K. without incurring duties. 

The U.S. already cracked down on the $800 threshold that lets goods under that value enter the country tariff-free, though the Trump administration put the order on hold after more than a billion packages piled up at the border. 

“As soon as the U.S. announced its clampdown, it almost prompted and nudged other countries to look at the rules,” said Susannah Streeter, head of markets at Hargreaves Lansdown. “It was only a matter of time until the U.K. government would look at tightening up this loophole.” 

Before Trump entered office, Marco Rubio, a longtime critic of Shein and now U.S. secretary of state, warned the British government against the “trade tricks [which] are the dirty secrets behind Shein’s success.” 

The company’s previous attempt to list in New York was reportedly blocked by U.S. regulators, and experts say a London IPO would draw scrutiny if the U.K. appears to be offering softer treatment.

“By allowing Shein to list without addressing this issue, the U.K. could attract criticism for enabling practices that the U.S. is actively working to dismantle,” said Lizzi C. Lee, a fellow at the Asia Society Policy Institute’s Center for China Analysis. 

Shein has “welcomed the opportunity to work with policymakers and industry peers to review the current de minimis framework,” it said in a statement. It insists its success comes from efficient production and not from tax breaks. 

Looking ahead

The government's long-awaited "China audit" — due to come out in the spring — will be indicative of the broader stance ministers wish to take in dealing with Beijing. The government insists the high-profile row over British Steel hasn't shifted its thinking.

But there are other knotty issues in the in-tray. The U.K.’s National Security & Investment Act (NSIA) — which scrutinizes deals that could cause a threat to national security — risks straining ties with China.

Banking lobby group TheCityUK has argued that the NSIA’s broad scope should be more targeted if the government doesn't want to clobber economic growth.

At the same time, ministers are mulling whether to include certain Chinese state-linked entities on the “enhanced tier” of its long-awaited new foreign influence registration scheme, which would likely inflame tensions with Beijing.

It's unlikely to hurt Britain's standing in the eyes of Team Trump, though.

Esther Webber contributed to this report.