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Spanish Prime Minister Pedro Sánchez has said the country is “reconsidering” its position on EU tariffs on Chinese electric vehicles in a sign of growing divisions within Europe over trade tensions with Beijing.
Amid concern that a tit-for-tat trade war could hurt Spanish exporters, Sánchez said at a press conference near Shanghai on Wednesday that it was important to find a “compromise” between the EU and China.
“I have to be blunt and frank . . . I think we need to reconsider, all of us, not only member states, but also the [European] Commission, our position towards this movement,” he said in Kunshan. “We don’t need another war, in this case a trade war.”
The comments, delivered during Sánchez’s second trip to China in 18 months, represented a significant intervention in a trade dispute between China and the EU in recent months and signal a change in Spain’s own position.
Sánchez wants to use his three-day visit to China to boost Spain’s exports to the country, but Spanish officials are concerned that one of its biggest export sectors — pork — could be hurt by a Chinese anti-dumping probe launched after the EV tariff plan was announced.
The Spanish premier was responding to a question on an EU vote to approve the Chinese EV tariffs, which is expected in October. Spain was one of 11 countries that voted in favour of increasing the tariffs in an advisory poll in July. Only four countries voted against the measure, and nine abstained.
The EU last year undertook a months-long investigation into suspected unfair subsidies in China’s automobile industry, amid concern that lower-cost Chinese EVs would undercut member states’ politically important carmakers at a time when China is booking huge trade surpluses.
At the conclusion of the probe, the 27-member bloc in June proposed sharply increasing tariffs by up to 37.6 per cent on Chinese EVs, which would bring tariff levels to nearly 50 per cent and mirror similar measures from the US. The new levies will be approved unless 15 member states — amounting to 65 per cent of the EU population — vote against.
Germany and its powerful car industry, which fears China will impose reciprocal tariffs on its vehicles, has been lobbying member states to oppose the measures, which would last five years.
China has also campaigned strongly against the tariffs and launched a series of countermeasures, including the investigation into European pork imports. China imported $1.5bn in pork products from Spain last year, more than any other EU country.
Beijing has also opened an anti-dumping probe into European dairy products and filed a complaint with the World Trade Organization over the EU’s planned EV tariffs.
Chinese President Xi Jinping on Monday encouraged Sánchez to play a “constructive role” in building ties between China and the EU, while the Spanish prime minister called for “closer, richer and more balanced” relations.
“I think that we need to build bridges between the European Union and China,” Sánchez said.
Chinese officials are in Brussels this week for talks on a solution, which could include voluntary undertakings to reduce exports to the EU, according to officials.
The trade tensions are part of a wider deterioration in relations between Beijing and western governments, which have pushed companies to “de-risk” their exposure to supply chains in the world’s second-largest economy.
China’s trade surplus with the EU was $162.13bn in the first eight months of this year, up nearly 6 per cent year on year. China’s trade surplus with Spain was $17.99bn in the seven months to July, which was virtually unchanged from a year earlier.
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