LDN - Business

Spain’s prime minister visits China to strengthen ties with Trump's top tariff target

[April 11, 2025] By SUMAN NAISHADHAM

MADRID (AP) — Spain’s Prime Minister Pedro Sánchez is visiting China on Friday, his third trip to the country in two years as his government seeks to boost investment from the Asian giant amid global economic uncertainty caused by a chaotic U.S. tariff policy.

Sánchez met with Chinese President Xi Jinping and was expected to meet as well as business leaders from several Chinese companies, many of which produce electric batteries or renewable energy technologies.

The visit comes at a complex moment for Europe and China. The tariffs announced last week — and then paused — by U.S. President Donald Trump could mean that the European Union pursues more trade with China — the world’s third-largest consumer market after the United States and the EU. There is also growing concern in the EU about China flooding the bloc with discounted goods as a result of U.S. tariffs, which would hurt European producers.

Sánchez's government has said that EU-member Spain wants to expand its economic ties with China.

“A trade war favors no one. We all will lose,” Sánchez said after meeting with Vietnamese leaders in Hanoi on Thursday, where he signed commercial agreements ahead of his visit to Beijing.

Spain's government spokeswoman Pilar Alegría said earlier this week that Sánchez's trip “has special importance" and is an opportunity to "diversify markets” — Spain could see as much as 80% of its exports to the U.S. impacted by Trump’s tariffs.

Warnings from Washington

U.S. Treasury Secretary Scott Bessent called out Spain for its move toward China, saying on Tuesday that Spain — or any country that tries to get closer to China — would be “cutting their own throat” because Chinese manufacturers will be looking to dump goods that they can’t sell in the U.S.

“Expanding the trade relations that we have with other countries, including a partner as important as China, does not go against anyone,” Spain’s Agriculture Minister Luis Planas, who is accompany Sánchez, said in Vietnam on Wednesday.

“Everyone has to defend their own interests," Planas said.

Spain leans pro-China as EU is divided

Spain — the eurozone's fourth-largest economy and a leader in growth — has in recent years been less adversarial toward China than other EU countries. After initially supporting EU tariffs placed last year on Chinese-made electric vehicles, which European leaders have said enjoy unfair advantages compared to European car makers, Spain abstained from voting on the customs duty.

Planas insisted that Spain’s approach to China “contributes to the collective effort made by certain countries in the European Union to get out of this situation.”

"Spain’s position has changed to be more pro-China ... than the the average European country," said Alicia García-Herrero, an economist for Asia Pacific at the French investment bank Natixis and an expert on Europe's relations with China.

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Chinese President Xi Jinping, right and Spanish Prime Minister Pedro Sanchez speak as they walk along the gardens of Diaoyutai Guest House after a meeting in Beijing, China, Friday, April 11, 2025. (Andres Martinez Casares/Pool Photo via AP)

Clean energy and pork products

Spain is a major supplier of pork to China, providing about 20% of China's imports, according to Interporc, a Spanish association of pork producers.

“For us, China is the main market,” said Daniel de Miguel, deputy director of Interporc.

The Southern European country, which generated 56% of its electricity last year from renewable sources, needs Chinese critical raw materials, solar panels and green technologies — similar to other European countries transitioning away from fossil fuels.

In December, Chinese electric battery company CATL announced a 4.1 billion euro ($4.5 billion) joint venture with automaker Stellantis to build a battery factory in northern Spain. That followed deals signed last year between Spain and Chinese companies Envision and Hygreen Energy to build green hydrogen infrastructure in the country.

The Spanish leader’s visit was announced before the Trump administration unveiled its tariff plan.

Spain, as a EU nation, had initially received a 20% blanket tariff that Trump has now lowered to 10% for most countries other than China for 90 days. The bloc also faces a U.S. duty of 25% for cars, steel and aluminum.

China, meanwhile, is facing a crippling, total 145% duty. When Trump announced Wednesday that China faced 125% tariffs, he did not include a 20% tariff on China tied to its role in fentanyl production.

Sánchez, who has made more trips to China than the leaders of Germany or Italy, last visited in September, when he met with Xi amid EU-China trade tensions. While China's investments in Spain have grown, the Iberian nation trades less with China than Germany or Italy.

García-Herrero, the economist at French bank Natixis, stressed the political value of the trip for Sánchez at a time when his leftist minority coalition lacks the support needed to get much passed at home and while Europe may be looking to thaw its strained relations with China.

For Spain, the key thing is "to get a leadership position in Europe at a time when the transatlantic alliance is not only at risk but in shambles,” she said.

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Associated Press writer Joseph Wilson in Barcelona, Spain, contributed to this report.

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