Despite being one of China’s main economic allies in Europe, Spain’s prime minister has urged Beijing to take steps to reduce its ‘unsustainable’ trade deficit with the EU.
Benjamin Fox
Spanish prime minister Pedro Sanchez has urged China to “open up so that Europe doesn’t have to close itself off,” at the start of a trade-focused three-day trip.
Chinese firms invested €643m in Spain in 2025, up from €149m in 2024, contributing to a total of over €9.7bn between 2010 and 2025, focusing on the energy, electric vehicle and technology sectors.
That includes a joint project by Chinese battery giant CATL and Spanish automaker Stellantis to build a €4.1bn battery manufacturing plant in Zaragoza.
However, most of the selling is being done by Beijing.
Spain ran a trade deficit of €42.3bn with China last year, with Sanchez telling his audience at Beijing’s Tsinghua University on Monday (13 April) that China accounts for 74 percent of Spain’s total trade deficit.
That is in line with the EU’s own booming trade deficit with China which increased to €360bn in 2025.
The trade deficit was “unbalanced” and “unsustainable”, added Sanchez.
The Spanish premier’s words were noticeably gentler than French president Emmanuel Macron’s during a state visit last December. Macron threatened EU tariffs against China if it did not take action to reduce its trade surplus, which he described as a “global imbalance”.
That could be because Spain has been among the European economies most receptive to Chinese investment over the past decade.
Spain’s enthusiasm for Chinese investment from the likes of technology giant Huawei has raised eyebrows in some quarters. Last September, commission tech chief Henna Virkkunen warned that a Spanish contract with Huawei to store the country’s judicially authorised wiretaps “could potentially create a dependency on a high-risk supplier in a critical and sensitive sector.”
While the last year in trade policy has been dominated by the US Trump administration’s so-called ‘Liberation Day’ tariffs, as the US president seeks to rebalance trade relations, the EU continues to be embroiled in a multi-sector trade dispute with China.
In particular, EU officials complain that China’s subsidies for its electric vehicle industry, as well as its restrictions on access to rare earths and on European firms hoping to obtain procurement contracts.
At the World Trade Organisation’s biannual ministerial conference in Cameroon, last month, EU trade commissioner Maroš Šefčovič said that it was time to reopen the WTO’s Most Favoured Nation (MFN) principle which enshrines equal treatment in trade policy.
For their part, EU trade ministers said that their main priority was “to tackle the trade tensions that have emerged over the last few years, notably due to non-market practices and policies, focusing on industrial sectors and level playing field issues,” a thinly-veiled reference to China’s trade tactics.
Sanchez is due to have meetings with president Xi Jinping and prime minister Li Qiang, on Tuesday (14 April).
Spanish officials have briefed that they are hoping to obtain greater market access for agricultural and industrial goods, and to explore joint ventures in the technology sector.
The timing of the visit will also be noted in Washington.
Sanchez has been the most vocal European critic of Trump’s war against Iran, refusing to allow the US air force to use military bases in Spain to launch raids.
