Exclusive- Spain calls for compromise with China ahead of EU vote on electric vehicle tariffs by Reuters

By Belén Carreño

MADRID (Reuters) – The European Union should seek a compromise and a negotiated outcome with China, Spain said on Thursday, ahead of a crucial EU vote on electric vehicle (EV) tariffs.

Instead of imposing tariffs, the EU should “keep negotiations open … beyond the binding vote” to reach an agreement on prices as well as relocating block battery production, Economy Minister Carlos Cuerpo said in a letter addressed to the European Commission. Vice President Valdis Dombrovskis seen by Reuters.

“There is a lot at stake for our domestic industry,” Cuerpo wrote, noting that Spain is the EU’s second-largest carmaker.

“We need to find the right balance, technically and politically, to ensure that we both defend our industrial interests and avoid a full-scale confrontation with strategic players like China,” Cuerpo added.

Prime Minister Pedro Sanchez said last month during a visit to China that the EU should reconsider its stance on tariffs and called on Brussels and Beijing to avoid a trade war.

The Commission’s proposal can be implemented unless a qualified majority of 15 EU members, representing 65% of the EU’s population, vote against it, a high hurdle.

Reuters reported on Wednesday that France, Greece, Italy and Poland would vote in favor, which would be enough to pass the EU’s most important trade measures. Germany plans to vote against it, sources said on Thursday.

Volkswagen (ETR:) and Renault (EPA:) is among the manufacturers already producing electric vehicles in Spain, while China’s Chery Auto has signed a joint venture agreement with Spain’s EV Motors to produce cars at its first plant in Europe.