Mr Sarwar told Politico that Britain and the EU must “work together and act in lockstep” to combat the flood of Chinese imports of electric vehicles (EVs).

His comments were at odds with those of Jonathan Reynolds, the Business Secretary, who just a day earlier, reiterated his concern that Beijing could retaliate against British car exports to China.

However, the Financial Times reported on Thursday that France and Germany would now insist that the UK increase tariffs on Chinese cars, meaning manufacturers, such as BYD, Geely and Chery, face levies of up to 45pc.

In return, France would drop its opposition to the UK’s car industry joining the EU’s proposed “Made in Europe” scheme. Under the scheme, an EV would qualify for subsidies and public tenders only if at least 70pc of its parts are made within the bloc.

Paris’s previous hard line had left British manufacturers of cars and components fearing they would be frozen out of the Continent, putting up to €80bn (£68bn) of trade at risk.

Andy Burnham, the Prime Minister, has turned the UK’s inclusion in “Made in Europe” into a key goal for his summit with the EU on Nov 20.

The Financial Times said that if Britain agreed to the tariffs, the “Made in Europe” scheme would be extended to countries that “were part of the EU internal market on Jan 1 2020”.

That would include Britain, but not other countries hoping to join the scheme, such as Japan, Korea and Turkey.

A No 10 official on Thursday welcomed the EU’s apparent willingness to include the UK in the scheme, but did not commit Britain to introducing the tariffs.

“We’ll of course wait to see the detail, and there’s a process still to run in Europe,” he said.

This suggests Britain still sees an opening to continue negotiating.

“The UK and Europe share deep economic and strategic ties,” the official said. “And where we find common cause and approach challenges in a spirit of cooperation, we can create opportunities for businesses and workers on both sides.”

Mr Reynolds had said on Wednesday: “When we make any trade decision in terms of trade defence tariffs in relation to the EU, that’s based on the UK interest – it’s not based on any other country asking for that.”

But on the sidelines of a German-British business summit in London on Thursday, Mr Sarwar said Brussels and London had to “grapple with the challenge that comes from rapid expansion in China”.

“The more that the UK and the EU work together and act in lockstep, the better it is for both the UK and the European Union,” he said.

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