Spanish Prime Minister Pedro Sánchez embarks on a trip to China. Picture: Deutsche Presse-Agentur.

On September 8, Spanish Prime Minister Pedro Sánchez began his trip to China.

    Pedro Sánchez's trip to China is extraordinary before the member states hold the final round of voting on the EU's tariffs on Chinese electric vehicles.

It is foreseeable that by October 31 at the latest, EU member states will vote on this issue and write it into law - imposing higher tariffs on electric vehicles made in China within the next five years, as Brussels insists that "there are unfair subsidies for electric vehicles in China." This move aims to deal with the large-scale subsidies of the Chinese government to electric vehicle manufacturers and ensure a fair competitive environment.

On August 20 previously, the European Commission disclosed the draft of imposing final countervailing duties on pure electric vehicles imported from China. Although the draft makes a small adjustment to the proposed tax rate, after the adjustment, SAIC still faces a tariff of 36.3%, which is of course the highest. BYD, also a Chinese automaker, is facing a tariff of 17.0%. Even so, it is still a headache for BYD.

On that day, the European Commission also decided to implement a separate tariff rate on cars produced by Tesla at its super production base in Shanghai and exported to the EU. At this stage, it is set at 9%.

Previously, in the vote on the tariff consultation draft in August, Spain, France, and Italy supported the measure of imposing tariffs, while Germany, Finland, and Sweden abstained.

In response, China launched an investigation into imports of European food and beverages, including pork products. Spain is a major source country for China's pork imports, accounting for more than 20% of the total. According to data from the Chinese Ministry of Commerce, China is Spain's largest trading partner outside the EU. The total trade volume between the two countries last year was 48.6 billion U.S. dollars.

Dimitri, a researcher at ECCRD, believes that after the implementation of new tariffs, the EU's imports of electric vehicles from China will decrease by about 40%. Because these tariffs will be added on top of the existing 10% import tax.

Chim Lee, a senior China analyst at the Economist Intelligence Unit (EIU), pointed out that it is estimated that China's total exports of electric vehicles

to the EU in 2023 were approximately 13.5 billion U.S. dollars.

The Ministry of Commerce of China stated that China and the EU have conducted multiple technical consultations on the issue of electric vehicle tariffs. The Chinese side hopes that the EU will resolve differences with China on this issue and avoid harming the mutually beneficial cooperation and common development of the automobile industries in Europe and China. The spokesperson of the Ministry of Commerce of China also emphasized that it is hoped that the European side will listen carefully to the voices within the alliance and conduct consultations with China rationally and pragmatically.

During this visit to China by Pedro Sánchez, he will meet with senior Chinese officials and President Xi Jinping, the top leader of China.

“China is willing to take Prime Minister Sánchez's visit as an opportunity to promote bilateral relations, deepen mutual trust through high-level exchanges, and address global challenges through high-quality cooperation,” Foreign Ministry spokesperson Mao Ning said at a press conference last week.

In early September, Charlie McConalogue, Minister of Agriculture, Food and the Marine of Ireland, and Martin Heydon, Minister of State, led a business delegation to visit China. Ireland is a major exporter of dairy products to China. The European Union is the second largest source of dairy imports for China. Last year, the export value of dairy products from the European Union to China was approximately 1.7 billion euros. Patrick Pagani, deputy secretary-general of Copa-Cogeca, the largest agricultural industry organization in the European Union, said that farmers are "worried about further escalation of trade tensions between the European Union and China and the continuous impact this will have on our industry." "We see again that our well-performing export products have become targets due to other disputes," Pagani said.

Wolfgang Buechner, spokesperson for the German government, said that the German government believes that in international trade relations, a friendly solution is desirable and the right way forward, as this can avoid an escalation of the situation and further damage everyone's interests. Germany is the largest producer of milk, butter and cheese in the European Union and also the largest exporter of dairy products to China in the European Union.

The Irish Examiner pointed out on August 22 that the country's 420 million euros worth of dairy products exported to China every year are being threatened by the “tit-for-tat” trade conflict between China and the European Union.

On July 29, 2024, Xi Jinping and Giorgia Meloni were at Diaoyutai. Picture source: GETTY.

Not long ago, Italian Prime Minister Giorgia Meloni visited China. Meloni said that this trip is to "reboot" the relationship between Italy and China. When meeting with Xi Jinping, she said, "As ancient civilizations, Italy and China have always admired each other and learned from each other." "There are an increasing number of unsafe factors in the international community. I think China inevitably becomes a very important interlocutor to deal with all these situations." She said that the two countries must "think together" to maintain stability and ensure peace.

After the talks, under the witness of Giorgia Meloni and Chinese Premier Li Qiang, China and Italy signed a three-year action plan. Meloni called it "an attempt at a new form of cooperation". It involves mutually beneficial cooperation in fields such as shipbuilding, aerospace, new energy, artificial intelligence, and electric vehicles.

Xi Jinping said that China and Italy are located at the two ends of the ancient Silk Road. Both sides uphold inclusiveness and mutual trust, and respect each other's chosen development paths. They pursue win-win cooperation. They advocate mutual learning among civilizations and promote equal dialogue between different civilizations. There are important opportunities for both sides to draw on the past for inspiration and seek common development.

In the news published by the BBC, it is stated that although there are differences, it still hopes to establish a stronger trade relationship with this Asian giant. The BBC also said that Meloni's public remarks seem to indicate that Italy also intends to move closer to China and become one of China's friends in the European Union. Meloni said, "I think Italy can also play an important role in the relationship between (China) and the European Union and try to establish a trade relationship that is as balanced as possible here."

Meloni is not a Sinophile. She has criticized China many times in the early years. Not long ago, she just blocked a Chinese state-owned enterprise from controlling the tire manufacturing giant Pirelli.

Last year, the bilateral trade volume between Italy and China reached 71.758 billion U.S. dollars. "No matter how big the differences are, economic cooperation is still the highlight," believes Zhao Wenchao, researcher and executive chairman of the ECCRD.

Zhao said, "Whether as an EU think tank with the mission of promoting sustainable development between Europe and China, or on a personal level, I hope that China and Europe can resolve more differences."

Zhao also said that in view of geopolitics, the Russia-Ukraine war, and the intensified competition in trade on a global scale, we cannot pin the prospects of EU-China relations on one or two visits. However, there is no doubt that whether it is Prime Minister Meloni or Prime Minister Sánchez's visit to China, it will play a promoting role in EU-China relations. Communication is always a lubricant.

China, Europe and the United States are three rreplaceable forces in the world. Sincere communication among politicians helps these three forces play a stronger role in global governance and coordinated global development.

(Author: Nikolaos Rigopoulos, Researcher and Secretary General of the Euro-Chinese Centre for Research and Development)