US Ally Urges EU To 'Reconsider' Tariffs On Chinese EVs: 'We Don't Need Another War'

U.S. ally Spain’s Prime Minister Pedro Sánchez has called for a reevaluation of the European Union’s stance on tariffs for Chinese electric vehicles (EVs). This move comes amidst growing concerns that the escalating trade tensions could negatively impact Spain’s domestic exporters.

What Happened: Sánchez, during a press conference in Kunshan, China, expressed the need for a “compromise” between the EU and China before the anticipated vote in October to ratify the new tariffs on Chinese EVs. He emphasized the potential damage of further trade disputes, the Financial Times reported on Tuesday.

"I have to be blunt and frank . . . I think we need to reconsider, all of us, not only member states, but also the [European] Commission, our position towards this movement," he said, in response to a question on the tariff vote. "We don't need another war, in this case a trade war."

Spain’s position on the tariffs has been under scrutiny, especially after the EU’s proposal to significantly increase tariffs on Chinese EVs, potentially up to 37.6%. This move was in response to suspected unfair subsidies in China’s automobile industry, which could threaten the EU’s carmakers.

Spain was one of the 11 countries that voted in favor of the tariff increase in an advisory poll in July. However, Sánchez’s recent comments suggest a potential shift in Spain’s stance, which could have significant implications for the final vote.

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Why It Matters: The EU’s proposed tariffs have sparked a strong reaction from China, which has lobbied against the measures and implemented countermeasures, including an investigation into pork imports from Europe, potentially affecting Spanish producers.

This development follows China’s strong opposition to the EU’s tariffs on EV imports, labeling them as “unfair.” China has vowed to protect its EV industry against such actions.

Despite the trade barriers in Europe and North America, aimed at limiting the influx of China-made EVs, Chinese automakers continue to invest heavily in overseas expansion, as seen at the recent Frankfurt trade fair.

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Image by World Economic Forum via Flickr

This story was generated using Benzinga Neuro and edited by Pooja Rajkumari