Spanish PM in China to boost ties amid Trump tariffs

Spanish Prime Minister Pedro Sánchez is in China on Friday for his third visit in two years, as his government aims to attract greater investment from the Asian economic powerhouse amid widespread uncertainty caused by the erratic US tariff policy.

Sánchez held talks with Chinese President Xi Jinping and was also scheduled to meet executives from several Chinese firms, many of which specialise in electric battery production and renewable energy technologies.

The visit takes place at a sensitive juncture for China and the European Union. Tariffs announced — and subsequently suspended — by US President Donald Trump last week may encourage the EU to increase trade with China, the world's third-largest consumer market after the US and the EU. At the same time, there is mounting concern within the EU that US tariffs could prompt China to flood the European market with low-cost products, to the detriment of European manufacturers.

The Spanish government has reiterated its intention to strengthen economic relations with China.

"Trade wars benefit no one. We all stand to lose," Sánchez stated during his visit to Hanoi on Thursday, where he signed several commercial deals before departing for Beijing.

Government spokesperson Pilar Alegría earlier emphasised the significance of the trip, describing it as a key opportunity to "diversify markets," noting that as much as 80% of Spanish exports to the US could be affected by Trump's tariff measures.

Warnings from Washington

US Treasury Secretary Scott Bessent criticised Spain's efforts to draw closer to China, warning on Tuesday that countries aligning themselves with China were effectively "cutting their own throat" due to the likelihood that Chinese manufacturers would attempt to offload unsellable goods into other markets.

However, Spain's Agriculture Minister Luis Planas, who is accompanying Sánchez, defended the move on Wednesday in Vietnam, stating: "Broadening our trade relations with partners like China does not run counter to anyone's interests."

"Every nation must protect its own interests," Planas added.

Spain Forges Its Own Path in the EU

Spain — the eurozone's fourth-largest economy and among the fastest growing — has adopted a more conciliatory stance towards China in recent years than many of its EU counterparts. Although Spain initially supported EU tariffs on Chinese electric vehicles last year, citing unfair competitive advantages, it later abstained from voting on those levies.

Planas asserted that Spain's stance on China is part of a broader European effort to navigate current economic challenges.

"Spain's position has shifted to be more favourable towards China compared to the average EU country," said Alicia García-Herrero, a senior economist for Asia Pacific at the French investment bank Natixis and a specialist in EU-China relations.

Clean Energy and Agricultural Trade

Spain is one of China's primary pork suppliers, accounting for around 20% of Chinese pork imports, according to Interporc, a Spanish pork producers' association.

"China is our top market," said Daniel de Miguel, Interporc's deputy director.

Spain, which generated 56% of its electricity from renewable sources in 2024, also depends on Chinese supplies of critical raw materials, solar panels, and clean energy technologies, in line with other European nations transitioning from fossil fuels.

In December, Chinese battery maker CATL announced a €4.1 billion ($4.5 billion) joint venture with Stellantis to build a battery plant in northern Spain. That deal followed other agreements between Spain and Chinese companies Envision and Hygreen Energy to develop green hydrogen infrastructure.

Sánchez's trip had already been planned prior to the Trump administration's tariff announcements.

Spain, as part of the EU, had initially been hit with a 20% general tariff — now reduced to 10% for most non-Chinese nations for a 90-day period. However, EU countries still face 25% US tariffs on cars, steel, and aluminium.

China, on the other hand, is facing an overall 145% tariff. While Trump stated China would face 125% tariffs on Wednesday, he did not mention an earlier 20% levy linked to the country's role in fentanyl production.

Sánchez, who has visited China more frequently than the leaders of Germany or Italy, last travelled there in September for discussions with Xi during a period of heightened EU-China trade tensions. Despite increasing Chinese investment, Spain's trade volume with China remains lower than that of Germany or Italy.

According to García-Herrero of Natixis, Sánchez's visit also carries political weight, particularly as his left-leaning minority coalition struggles to pass legislation domestically, and as the EU considers mending ties with Beijing.

For Spain, she noted, the goal is "to secure a leadership role within Europe at a time when the transatlantic alliance is not just fragile but disintegrating."