Spanish Prime Minister Pedro Sánchez called on Monday in Beijing for greater dialogue and cooperation with China, urging the avoidance of a trade war between the Asian giant and the European Union.
The declaration comes as Brussels is considering inflicting tariffs on electric vehicles made in China, which could deepen economic tensions between the two blocs.
A call for dialogue in the face of the threat of tariffs
Pedro Sánchez met with Chinese President Xi Jinping as part of his official visit to Beijing. Before the meeting, he emphasised that the measures envisaged by the European Union, such as imposing supplementary customs duties on Chinese electric cars, were “complex”. He stated that Spain was seeking to avoid an escalation of the conflict by favouring a negotiated solution within the World Trade Organisation (WTO).
“A trade war will profit no one,” Sánchez said while underscoring the necessity to create a level playing field for Chinese and European companies. The purpose is to find compromises that permit all parties to benefit from enhanced cooperation, without harming existing trade relations.
Strong economic relations despite differences
At the opening of the China-Spain Economic Forum in Beijing, Sánchez stressed the firm economic ties between Spain and China. “Even in areas where we have disagreements, we preserve a constructive willingness to engage in dialogue and cooperation,” he expressed, reaffirming his administration’s commitment to promoting a positive agenda in collaboration with Chinese authorities.
Sánchez furthermore met with Li Qiang, the Chinese premier, before holding talks with Xi Jinping. During these discussions, he voiced a desire to strengthen trade ties while advocating for a fair global trading system. Spain hopes to calm increasing tensions between China and the European Union over electric vehicles.
Concerns for the Spanish car industry
One of Sánchez’s primary concerns is the impact that a Chinese response could have on the Spanish car industry. Reports imply that Beijing could respond to the EU measures by increasing tariffs on imported motor vehicles, especially those powered by petrol. This could directly affect Spanish companies such as SEAT, a major carmaker owned by the Volkswagen Group.
Chinese state media have also raised the possibility of scrutiny of European imports, including brandy and plastic products such as poly-omega 3, which could be subject to dumping probes.
This economic threat is a concern for Madrid, especially since China is an important market for several Spanish sectors.
The impact of tensions on European food products
Trade tensions between China and the European Union likewise extend to food products.
China has launched inquiries into European imports of pork and dairy products, a critical sector for countries such as Spain, the Netherlands and Denmark. In 2023, Spain exported $1.5 billion worth of pork to China, a strategic market for Spanish producers.
Beijing has stepped up its investigations into European subsidies, especially in the dairy sector, creating new uncertainties for exporters. If tariffs are increased, this could have a significant impact on the Spanish economy and other exporting countries in the European Union.
Response expected in October
The European Union is due to decide in October on whether to impose tariffs of up to 36.3% on Chinese electric cars, in addition to the 10% duties already applied.
This vote will be critical, as it will require the approval of a qualified majority of 15 Member States, representing 65% of the EU population, to enter into force.
While Spain, France and Italy supported these measures last July, other countries such as Germany, Finland and Sweden abstained. Sánchez’s role could accordingly be decisive in easing tensions and finding a common solution.
The Spanish Prime Minister will continue his visit to China on 10 and 11 September in Shanghai, where he will meet with leaders and businessmen. He will likewise inaugurate a new Spanish cultural centre, the Cervantes Institute, aimed at strengthening cultural ties between the two nations.
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