Sánchez in China: “A trade war would benefit no one” | Spain

Pedro Sánchez was very clear from the beginning of his official agenda this Monday in Beijing, in the framework of a trip whose main objective is Avoiding retaliation on Spanish pork that the Chinese government is planning in response to the European Union's decision to impose tariffs on Chinese electric cars. “A trade war would benefit no one,” the president assured a forum of Chinese and Spanish businessmen, the Business Advisory Council, which included 22 Spanish and 21 Chinese companies. “Measures such as imposing additional tariffs on Chinese electric vehicles represent a challenge for everyone, the current trade tensions are a big challenge,” Sánchez admitted.

“Spain will work towards a negotiated and agreed solution within the WTO framework. A solution that helps to create greater equality of conditions and promotes the development of European industry in collaboration with Chinese companies in the sector. In this context, it is vital that Spain and China maintain a constructive dialogue based on mutual respect,” the president insisted before this business forum. Later, already during his meeting with the Chinese Premier, Li Qiang, Sánchez expressed his “surprise” at the threat of Chinese reprisals against Spanish pork, according to sources from the Spanish delegation, and hoped that a solution could be found. At this meeting, according to these sources, the Chinese Premier expressed his “concern” about the EU's customs tariffs on Chinese electric cars. The tone, they emphasize, was positive and the Spanish delegation felt that there was a prospect of an agreement.

In the subsequent meeting with President Xi, the most important, which offered the Spaniard a working meeting and dinner, Sánchez offered himself as an interlocutor to resolve China's crisis with the EU over the electric car. “China plays a central role in the world. Europe too. Spain wants to work constructively so that relations are richer, closer and more balanced for the benefit of our societies. In this increasingly complex geopolitical context, we must work together to resolve differences through negotiation, in a spirit of dialogue and collaboration within multilateral frameworks,” said the Spaniard. Xi, who did not specifically mention this trade war, although he highlighted it, highlighted the good relations between China and Spain and invited the kings to visit the Asian giant in 2025. “In a changing and turbulent world, we, China and Spain, advocate mutual respect, multilateralism and free trade. “Spain plays an active role in the world,” Xi told Sánchez.

The Chinese president asked the two sides to fully develop the role of various economic and technological cooperation platforms to promote development in high-tech fields such as artificial intelligence, digital economy and new energy, “so as to achieve mutual benefits and win-win situations,” according to Beijing's official reading. “We hope that Spain will continue to provide a fair, just, safe and non-discriminatory business environment for Chinese companies that want to invest and do business in Spain,” Xi said.

Spain, Sánchez told Xi, “supports the principles of free trade and open markets, does not agree with a trade war and is ready to continue playing an active role in promoting the healthy development of EU-China relations,” according to the Chinese government's reading. Sources from the Spanish delegation stress that the atmosphere of both meetings was very constructive and, even if no agreement was reached, it seems clear that both sides are seeking to avoid a trade war that no one seems to want. The Spanish delegation stresses that Xi treated Sánchez at all times, both during the official meeting and at dinner, as an important interlocutor within the EU and as a respected partner.

The conversation did not only revolve around the trade conflict, there was also a lot of talk about geopolitics and here, China appreciates Spain's position on the war in Gaza, very close to that of the Asian giant. The Chinese government recognizes the serious trade imbalance with Europe – and with Spain – but insists that it is not a desired phenomenon, but rather structural given the production of the two giants. In any case, the feeling that the Spanish delegation has is that there is a possibility of an agreement with Xi's government. The representatives of the pork sector who accompany Sánchez on the trip are eager to see a possibility of a solution to a problem in which they risk a fifth of their production, which is destined for China.

In July, the EU decided to impose tariffs of up to 47.6% to prevent Chinese cars from flooding the market and complicating the future of the European car industry. The EU considers that the Chinese government is subsidizing its industry and thus helping to make cars cheaper. There would therefore be unfair competition with European producers, with higher prices. For now, the measure is provisional. The final vote will take place in November and China hopes to change the vote of countries like Spain so that they at least abstain. Their way of putting pressure was to open an investigation in June anti-dumping against pork imports from the EU, which represents a clear threat of retaliation against a Spanish pork industry in which China plays a key role. The Chinese authorities have not yet announced a final decision.

Spain has become a major pork exporting power, bringing in billions of euros and thousands of jobs in several communities, especially in Catalonia, and The Asian country is its first customer, to which it exported 560,488 tons worth 1,233 million euros in 2023. Japan, with 80,000 tons, and the Philippines, with 70,000, are the next markets for Spanish pork in Asia, according to data from Interporc. the industry's interprofessional association. Spain produces twice as much meat as it consumes: the rest is exported.

Sánchez is in China, accompanied by representatives of the automobile and pork industries, to try to find a negotiated solution to this conflict and avoid a trade war. “We want to build bridges to defend together a fair trade order in the most scrupulous respect for the multilateral framework and maintaining open markets that allow our economies to grow and benefit our industries and societies,” Sánchez said in the part open to the press. the Chinese premier at the People's Palace, the seat of political power of this Asian giant in Tiananmen Square, where the Forbidden City emperors and where brutality repression of student protests in 1989, which resulted in the massacre of more than 10,000 people.

Moncloa does not want to specify whether Sánchez is willing to negotiate in Beijing with Spain's vote in the EU, as the Chinese want. Spain supported the idea of ​​tariffs on Chinese electric cars in June, but the decision on the final vote has not been made or at least has not been officially announced. Moncloa insists that there is plenty of time left and that it will be done according to the circumstances, so this trip will be decisive in deciding one way or another.

The president's messages since his arrival in the Chinese capital have focused on negotiations to avoid a trade war. One solution is to get China to invest in the European Union, to set up electric car or battery factories there, something that Spain also aspires to. Car and battery factories are already underway, including one from the car brand Chery in Barcelona and one from the lithium battery giant Envision in Cáceres. Sánchez will visit precisely this last company in Shanghai. “We are committed to developing a positive agenda and seeking consensual solutions,” he said in his first speech of the day, at the 9th edition of the Spain-China Forum, referring to the points on which the two countries do not agree. disagree.

The president is particularly concerned about the trade imbalance between Spain and China, and the trip also seeks to seek more Chinese investment in Spain and a greater entry of Spanish products into China. Spain, like other European countries, is very concerned about the possibility that, especially if Donald Trump wins the elections in the United States, a new trade war could break out between the two giants that would end up seriously damaging European industry. Sánchez always defends multilateralism during his trips and, in China, he also demands that tensions with the EU be resolved within the framework of the World Trade Organization (WTO), but the EU no longer wants to allow the great imbalance with China. China wants above all to avoid unfair competition from electric cars in its country. The solution seems complex, but the president's team hopes that the trip will serve to minimize the damage to the Spanish industry, especially the meat industry.