Mr. Sanchez's journeys to China and Vietnam: Practical business maneuvers amidst tariff conflicts
Fresh Take:
President Pedro Sánchez's visits to China and Vietnam are a move to adapt to the new economic landscape as Western leaders reconsider their alliances. With the US ramping up tariffs against its trading partners, Europe needs to adapt.
In these visits, Spain is approaching China not as a replacement for its Western allies, but as a partner in navigating the complexities of economic warfare. The relationship between Spain and China has evolved over five decades, transforming from initial skepticism to interdependence.
Before Sánchez's visit, Spain had met with China three times in two years, each time bringing different priorities to the table. The first meeting in March 2023 focused on geopolitics and mediation in the Ukraine conflict. The second, in September 2024, addressed the European tariff pressure on Chinese electric vehicles. Spain offered itself as a bridge between Brussels and Beijing, even abstaining from supporting the European tariffs on the Chinese automotive sector.
In the third visit, Europe and Spain must respond jointly to Washington's commercial pressures and the growing sense of being abandoned by the US. Spain's direct exports to the US don't exceed 7%, making China a more significant market for Spanish goods.
China, too, has expressed frustration with EU tariffs on electric vehicles. A united EU response is crucial to address these challenges, with Ursula von der Leyen indicating a lean towards improving commercial relations with Asia.
Spain can offer valuable insights about China for the EU, without becoming the 'tip of the spear' of the continent's trade policy. The visits to China and Vietnam are an opportunity for Spain to strengthen ties, diversify markets, and gain critical information about the Chinese market.
Meanwhile, Southeast Asia offers a chance to reconfigure the global supply chain, with Vietnam, in particular, emerging as a key beneficiary. With the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the Regional Comprehensive Economic Partnership, Vietnam has an opportunity to further strengthen ties with the EU and other Asian countries.
Despite the potential, China's 'checkbook diplomacy' has been criticized for generating economic dependence in recipient countries. However, Spain sees this relationship as a positive-sum game, with the potential to create more opportunities for European companies in third countries.
In conclusion, Spain's economic relationships with China, the US, and the EU are all about finding a balance. The country is pursuing collaboration and understanding, knowing that these relationships are key to economic growth and stability. Spain's strategic approach highlights the complexities of global trade in the face of shifting alliances and tariff disputes.
The average Spanish business, in light of Europe's need to adapt, sees China as a potential finance partner beyond traditional Western alliances, given the increasing economic warfare and US tariffs. In politics and general-news discussions, Spain's growing relationship with China is often cited as an opportunity to strengthen ties, diversify markets, and gather crucial information about the Chinese market, without making Spain the main champion of the EU's trade policy.
