By Joe Cash
BEIJING (Reuters) – Spanish Prime Minister Pedro Sanchez is expected to meet Chinese President Xi Jinping on Monday, with the EU and China on the verge of a trade war and Beijing preparing to hit back at Spanish automobiles and pork if Brussels imposes tariffs on its EVs.
Beijing in June warned that escalating frictions with the European Union over its electric cars could trigger a trade war, just days after China ratcheted up tensions by announcing an anti-dumping investigation into European pork imports.
China in August then raised the stakes even higher by kicking off a probe of the 27-strong bloc’s dairy subsidies.
Both of which brought Brussels’ dispute with Beijing to Sanchez’s backyard.
Spain in 2023 exported $1.5 billion worth of the pork products China will investigate, Chinese customs data showed, more than second- and third-ranking the Netherlands and Denmark’s combined exports of $620 million and $608 million, respectively.
The Iberian state also sold just under $50 million worth of targeted dairy products to China last year.
“Our objective is to maintain the political momentum of the bilateral relationship, strengthen economic and trade relations and support Spanish culture, education and science in China,” Sanchez’s official X account said above a video of his arrival in Beijing on Sunday.
The Spanish Prime Minister is due to meet Xi and participate in various business forums in Beijing and Shanghai, according to Chinese state media.
Sanchez will want assurance that China will not strike back at Brussels by raising its own tariffs on imported large-engined gasoline-powered vehicles, as state Chinese media have suggested it might, as that could hurt SEAT, an automaker owned by Volkswagen that is one of Spain’s biggest employers.
And while Beijing’s January and May announcements it would also examine whether European brandy and POM copolymers, a type of manufacturing plastic, had been sold into China below market rates will impact Paris and Berlin more than Madrid, the broader bloc will be hoping Sanchez can dial the tensions down a notch.
State-owned newspaper Global Times said on Monday it was “important that China and Spain can have constructive communication on trade issues”, citing Zhao Junjie, an academic affiliated with the Chinese Academy of Social Sciences.
Zhao also hoped that Sanchez’s visit would “make clear the notion to the EU that trade frictions in a few areas cannot represent the big picture and should not be a hurdle to bilateral relations.”
China has been canvassing the EU’s member states to reject the European Commission’s proposal to adopt additional duties of up to 36.3% on Chinese-made EVs when they vote on it in October.
The curbs will be implemented in addition to the EU’s standard 10% import tariff unless a qualified majority of 15 EU members representing 65% of the EU population vote against them.
In an advisory vote in July, Spain along with France and Italy supported the tariffs, while Germany, Finland and Sweden abstained.
(Reporting by Joe Cash; Editing by Muralikumar Anantharaman)
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