Spanish PM's China Visit Amid Escalating EU-China Trade Tensions

Pedro Sanchez, Spain's Prime Minister, has arrived in Beijing for a crucial visit amid escalating trade tensions between the European Union and China. The visit, scheduled for September 9-11, 2024, comes at a critical juncture as both sides grapple with potential tariffs and anti-dumping investigations.

Spain, a significant player in EU-China trade relations, finds itself at the center of these disputes. As the world's fourth-largest pork producer and second-largest exporter, Spain exported pork products worth $1.5 billion to China in 2023. This makes Spain the top exporter among EU countries affected by China's recent anti-dumping probe into European pork imports.

The visit aims to address several key issues:

• EU's proposed tariffs on Chinese electric vehicles (EVs)
• China's anti-dumping investigations on European products
• Spain's economic interests in China

Sanchez is expected to meet with Chinese President Xi Jinping on September 11, 2024. The Spanish leader's official statement emphasized the importance of maintaining bilateral relations and strengthening economic ties.

China has been actively engaging EU member states to oppose the European Commission's proposal for additional duties of up to 36.3% on Chinese-made EVs. This vote, scheduled for October 2024, requires a qualified majority of 15 EU members representing 65% of the EU population to reject the tariffs.

Spain's position on this matter is crucial, as it supported the tariffs in an advisory vote in July 2024, along with France and Italy. Germany, Finland, and Sweden abstained. The outcome of this vote could significantly impact the European automotive industry, including SEAT, a major Spanish employer owned by Volkswagen.

"It is important that China and Spain can have constructive communication on trade issues. We hope that Sanchez's visit will 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."

The visit also occurs against the backdrop of China's investigations into European brandy and POM copolymers, which primarily affect France and Germany. These probes, announced in January and May 2024, further complicate the EU-China trade relationship.

As the world's largest EV market since 2015, China's potential retaliation against European large-engined gasoline-powered vehicles could have significant consequences for Spanish automakers. This underscores the delicate balance Sanchez must strike during his visit, advocating for Spanish interests while navigating broader EU-China trade tensions.

The outcome of this high-stakes diplomatic mission could play a crucial role in shaping the future of EU-China trade relations, with potential ramifications for global trade dynamics.