Spain's PM heads east to build bridges in China, Vietnam amid US tariff fallout

MADRID (Reuters) - Spain's Prime Minister Pedro Sanchez will be the first of a series of European leaders to head east following the announcement by U.S. President Donald Trump of sweeping global trade tariffs, with a trip to Vietnam and China starting on Wednesday.

Sanchez, the leader of one of Europe's dwindling band of left-wing governments, will spend two days in Vietnam, forging a political connection with the country's Communist leadership, before travelling on to Beijing on Friday for a day's visit.

The trip to China is Sanchez's third in as many years as he seeks to position Spain as an interlocutor between China and the 27-member European Union.

During a visit last September, Sanchez announced a reversal of Spain's position in support of the EU applying tariffs to Chinese electric vehicles.

Since then, Chinese investments in Spain have been confirmed including in a factory by battery maker CATL and a factory to make electrolysers for green hydrogen production by Envision. EV producer Leapmotor, lithium battery maker Sematec and Chinese electrolyser manufacturer Hygreen are reported to be weighing further projects.

Europeans have previously been susceptible to U.S. warnings to be wary of allowing Chinese investments in strategic industries, and relations have been frayed by trade tensions and China's ties with Russia.

'GOOD TIMING'

Spain's economy minister Carlos Cuerpo said on Monday that China would be a key strategic partner for Spain and Europe.

"I believe that this message of Spain's that the prime minister has been advancing for some time is being increasingly accepted and shared by the rest of the member states," he said.

Ramon Gascon Alonso, Asia-Pacific coordinator of Spain's Exporters' and Investors' Club, which counts some of the country's biggest companies among its members, said Sanchez's repeat trip was arranged before Trump's tariffs were announced but was "good timing".

"It's a way in which Spain can have a role in the geopolitical scenario," he said. "There were good feelings after the last meeting. China will be trying to attract to its sphere of influence as many countries as it can. You can expect some more investments in Spain."

Sanchez will meet current investors in Spain along with lithium miner Tianqi, state-owned conglomerate China Three Gorges, automaker SAIC and other energy firms.

Julio Ceballos, a Spanish business consultant based in China, said that, having told China he would speak in its favour on EU EV tariffs and then abstaining in the eventual vote that brought them in, Sanchez had a fine line to walk on this trip.

Spain's pork industry, which exports significantly to China, is now under investigation in a Chinese anti-dumping probe. A government source said they expected no resolution to the dispute in the near term.

"He will try to keep on better terms with China than other European countries this time so that China doesn't retaliate against Spain's pork, wine and olive oil industries," Ceballos said.

(Reporting by Aislinn Laing and David Latona, additional reporting by Joan Faus, writing by Aislinn Laing; Editing by Alex Richardson)