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Spanish Prime Minister Pedro Sanchez speaks at a press conference in Kunshan, Jiangsu province, China, 11 September 2024.
Sihao Jiang |. Reuters
A trade war is not in the interests of the European Union or the United States, Spain’s prime minister told CNBC on Wednesday.
“We share a strong transatlantic link … our economies are very interconnected, and I think a trade war is not in the interest of (either side), neither the US nor the European Union,” Pedro Sanchez told CNBC’s Steve Sedgwick. on the sidelines of the World Economic Forum in Davos, Switzerland.
“A trade war is kind of a zero win,” he added. “We need to focus on how to strengthen our transatlantic relationship, which is now more important than ever.”
Since his inauguration on Monday, President Donald Trump has repeated his threat to impose tariffs on EU goods imported into the United States, telling reporters that the EU is “treating us very, very badly. the only way … you will get justice.”
On Tuesday, Trump said his administration was discussing imposing an additional one 10% tariff on goods imported from China starting in February. He also warned that Mexico and Canada could also be targeted by import duties.
The European Union’s economic commissioner told CNBC that the bloc would respond to any tariffs imposed by the U.S.
“If there is a need to protect our economic interests, we will respond proportionately,” Valdis Dombrovskis told CNBC’s Steve Sedgwick.
“We are ready to defend our values, as well as our interests and rights, if necessary,” he added.
European officials have been talking to their American counterparts to find a “pragmatic” solution to the tariff discussions, Dombrovskis stressed, noting that global growth could suffer if economic relations between the two countries are damaged.
NATO is spending
Apart from the trade imbalance with the EU (in 2023 the EU had a surplus in goods trade with the US, but a deficit in services over the same period), another area of antagonism between the EU and the US is defense spending.
During his first term as president, Trump frequently criticized European countries within the Western military alliance for not spending the agreed 2% of gross domestic product (GDP) on defense spending.
In 2018, at the height of Trump’s irritation with NATO, only six member countries met this goal. In 2024, NATO estimates that 23 members will have reached the 2% target. Spain was not one of them.
In fact, according to the latest NATO data, Spain was the country with the lowest defense spending in 2024, with just 1.28% of GDP spent on defense.
Sanchez defended Madrid’s record for defense spending, saying he had worked hard to increase that figure.
“Rest assured, Spain is very committed to that 2% of GDP defense spending target, but let me also say that in the last 10 years we have also increased our total defense spending by 70%. If we take these numbers in absolute terms, we can say that Spain ranks 10ththousand the main contributor to NATO,” he said.
