Spanish prime minister Pedro Sánchez called on the European Commission and the rest of EU to reconsider the introduction of tariffs on electric cars (EVs) and prevent a trade war that could have damaging implications for the EU pork sector.
Mr Sanchez’s comments, made last week during a high-profile visit to China, were quickly echoed by German prime minister Olaf Scholz, providing renewed hope of a resolution before too much damage is done.
The dispute started when the EU announced tariffs of up to 37.6% on Chinese EVs, prompting retaliation from China, which in June announced an anti-dumping investigation into EU pork in June. In July, it named three leading European pork producers – Dutch company Vion, Danish Crown and Spanish business Litera Meat – as the focus of it.
This investigation, expected to last up to a year, could ultimately result in hefty new tariffs on EU pork shipments to China.
No country has more to lose than Spain. The recent rapid growth of its pig herd has been driven, in part, by a desire to become the dominant player in China, which now accounts for just over 20% of Spain’s pork exports, worth €1.2bn in 2023. Spain, in turn, accounted for 25% of China’s (non-offal) pork imports last year, fractionally behind Brazil.
The Chinese import market is diminishing, however – non-offal pork imports halved in Q1, compared with Q1 2023, and European pork exports to China were 13% down in the first half of 2024, due to increased competition from Brazil, the US and Canada, and a struggling Chinese economy, according to AHDB.
An additional hike in the cost of EU pork would further undermine this trade, with a potentially very significant impact on the Spanish sector and other leading EU pork exporters, with a damaging knock-on effect on prices, likely to also be felt in the UK.
Reconsider
Speaking at the end of his four-day visit, Mr Sanchez made it clear he wants to avoid a dispute that would harm Spain’s pork sector.
“We need to reconsider all of us, not only the member states but also the Commission, our position towards this movement,” he said in Shanghai, Euronews reported.
“We don’t need another war, in this case, a trade war. We need to build bridges between the European Union and China,” he went on. And from Spain, what we will do is to be constructive and to try to find a solution, a compromise, between China and the European Commission. If you ask me, I will answer that we’re reconsidering our position.”
“I think the Chinese population and the Chinese government are very aware of the value of the pork sector. The pork sector can have the guarantee that the Spanish government will, of course, defend its interests.”
His comments represented a big change of tack, as Spain had previously been one of the strongest advocates in support of the EV tariffs and was expected to maintain that positive position in the upcoming EU vote, set to take place before November, Euronews reported.
In a further significant development soon afterwards, Mr Scholz gave his backing for the Spanish premier’s position, saying via his spokesman that this ‘direction of travel is one that we share’, Bloomberg reported.
Chinese president Xi Jinping had, earlier, urged Mr Sanchez to play a ‘constructive role’ in improving strained ties between Beijing and Brussels – and it appears China might be playing a smart game, targeting the EU pork sector as leverage to get what it wants.