Spanish autos, pork in Beijing’s sights with PM Sanchez in China

BEIJING – Spanish Prime Minister Pedro Sanchez is expected to meet Chinese President Xi Jinping on Sept 9, with the European Union 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 electric vehicles (EVs).

Beijing in June warned that escalating frictions with the EU 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 incidents brought Brussels’ dispute with Beijing to Mr Sanchez’s backyard.

Spain in 2023 exported US$1.5 billion (S$1.9 billion) worth of the pork products that China will investigate, Chinese Customs data showed, more than second- and third-ranking the Netherlands’ and Denmark’s combined exports of US$620 million and US$608 million respectively.

The Iberian state also sold just under US$50 million worth of targeted dairy products to China in 2023.

“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,” Mr Sanchez’s official X account said above a video of his arrival in Beijing on Sept 8.

The Prime Minister is due to meet Mr Xi and participate in various business forums in Beijing and Shanghai, according to Chinese state media.

Mr Sanchez will want assurance that China will not strike back at Brussels by raising its own tariffs on imported large-engined petrol-powered vehicles, as state Chinese media has suggested it might, as that could hurt Seat, an automaker owned by Volkswagen that is one of Spain's biggest employers.

While Beijing’s announcements in January and May that 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 Mr Sanchez can dial the tensions down a notch.

State-owned newspaper Global Times said on Sept 9 it was “important that China and Spain can have constructive communication on trade issues”, citing Dr Zhao Junjie, an academic affiliated with the Chinese Academy of Social Sciences.

Dr Zhao also hoped that Mr 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 EU member states to reject the European Commission’s proposal to adopt additional duties of up to 36.3 per cent on Chinese-made EVs when they vote on it in October.

The curbs will be implemented in addition to the EU’s standard 10 per cent import tariff unless a qualified majority of 15 EU members representing 65 per cent 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. REUTERS