“We do not need another war, in this case, a commercial one. We need to build bridges between the EU and China,” said Pedro Sánchez in Shanghai.
The Spanish president, Pedro Sánchez, has openly asked the European Commission and the other 26 member states of the European Union to “reconsider” the proposed tariffs on the import of electric vehiclesmade in chinarevealing the political cracks before a decisive vote which could make tariffs a fixture for at least five years.
The tariffs are intended to compensate for the subsidies that the Beijing authorities inject into this lucrative sector, which translates into artificially low costs. After a months-long investigationthe Commission discovered that public money is spread throughout the supply chain, making European competitors They risk suffering unsustainable economic losses.
For this reason, Brussels proposed some additional rightswhich range between 7.8% and 35.3%, depending on the brand and its level of cooperation with the research, and which would be added to the current rate of 10%. In this way it would be guaranteed fairer competition in the market.
Tackling unfair business practices
But, for Sánchez, this approach may not be the best, especially if it triggers retaliatory measures. against pork productsa very valuable and delicate sector for Spain. “We all have to reconsider, not only the Member States, but also the Commission, our position before this movement“said the President of the Spanish Government in Shanghai, the last stop of his four-day official visit a China.
“As I have said before, we do not need another war, in this case, a trade war. We need to build bridges between the European Union and China“, he continued. “And from Spain, what we are going to do is be constructive and try to find a solution, a commitmentbetween China and the European Commission. If you ask me, I will answer that we are reconsidering our position.”
The declaration represents a significant turn for Spain, which usually supports the Commission’s line of action. Apparently, the country voted in favor of the tariff during a non-binding consultation in July and was expected to maintain that positive position in the next votewhich will take place sometime before November.
The vote is shaping up to be a decisive test of the EU’s willingness to do against unfair business practices of China, a long-standing point of friction. France and Italy consider themselves supporters of additional tariffswhile Hungary leads the opposition. Germany is subject to a intense pressure by local industry to defeat the measure, but the ruling coalition has not decided. A qualified majority will be needed to stop the tariffs.
China has been accused of applying a divide and conquer strategy to divide the Member States, pit them against each other and thwart collective decisions that would harm Beijing’s interests. Achieving global leadership in the electric vehicle sector is considered one of the main priorities of the Communist Party, a political objective that, according to Brussels, fuels generous financial injections into national manufacturing.
The European Commission did not immediately respond to a request for comment. Sánchez’s words coincide with a meeting between Commission officials and China in Brussels to discuss the anti-subsidy investigation and proposed tariffs.
Pork, between two fires
During his press conference, Sánchez said that Spain and China had more topics of agreement than disagreement and emphasized the need to maintain dialogue at the “highest level.” Next, he acknowledged that bilateral relations must be “rebalanced” by trade deficit between the EU and Chinaa concern shared by other countries.
“We don’t want a trade war that would benefit no one,” Sánchez told reporters. The prime minister repeatedly insisted on his desire to play a “constructive role” between Brussels and Beijing and in his hope that a “compromise” is finally reachedalthough he did not specify what form that solution should take.
Asked about the prospect of retaliation against the pork sector, Sánchez said that both issues should not be interrelated. The Chinese Ministry of Commerce launched an “anti-dumping investigation” in June into imports of “pork and relevant pork by-products“from the EU, just days after the Commission released its first tariff proposal.
The Ministry’s measure could pave the way for trade restrictions. Spain, the Netherlands, Denmark, Germany and Belgium are considered the most vulnerable to these retaliations.
“We have expressed our surprise that these trade negotiations have become entangled with possible sanctions against a sector that has nothing to do with the automotive sector,” Sánchez said about his meeting with President Xi Jinping.
“I think the Chinese population and the Chinese government are very aware of the value of the pork sector“, he added. “The pork sector may have the guarantee that the Spanish Government“European brandy exports are also under scrutiny from Beijing, which has suspended provisional tariffs awaiting the final EU vote on electric vehicles.
