China, EU must oppose tariff 'bullying', Xi tells Spanish PM

By Joe Cash and David Latona

BEIJING/MADRID (Reuters) - President Xi Jinping told Spain's prime minister on Friday that China and the European Union must join together in defending globalisation and opposing "unilateral acts of bullying", in a clear swipe at U.S. President Donald Trump's tariff policies.

Xi, in his first public comments on the issue since Trump launched his tariff offensive last week, said there could be "no winners" in any trade war, and he said the EU had a key role to play in ensuring global economic stability.

Spanish Prime Minister Pedro Sanchez said China and the United States needed to hold talks to defuse the situation, and he also called for a more balanced relationship between Beijing and the 27-nation EU, which has its own trade issues with China.

"China has always regarded the EU as an important pole in a multipolar world, and is one of the major countries firmly supporting the EU's unity and growth," Xi told Sanchez during their talks in Beijing, according to the Xinhua news agency.

"China and the EU should fulfill their international responsibilities, jointly safeguard the trend of economic globalisation and the international trade environment, and jointly oppose unilateral acts of bullying," Xi added.

In a stunning reversal, Trump said on Wednesday he would temporarily lower hefty duties he had just imposed on dozens of countries including the EU-27, for 90 days.

However, he further jacked up tariffs on Chinese imports to over 145%, escalating a high-stakes confrontation between Washington and Beijing, which retaliated by imposing 125% tariffs on U.S. imports.

Sanchez said he hoped the European Commission would use the 90-day window on the EU's behalf to negotiate the "best possible" deal with Washington. The EU has paused its own retaliatory tariffs that it was set to impose on U.S. imports.

'NO WINNERS'

Without directly mentioning Trump or the United States, Xi said: "There are no winners in a tariff war," prompting the Spanish leader to say: "Trade wars aren't good - the world needs China and the U.S. to talk."

Sanchez's trip to Beijing, his third in as many years, aims to forge closer economic and political ties with China amid the global fallout from Trump's tariff policy, seeking to position Spain as an interlocutor between China and the EU and to attract more Chinese investment.

Spanish officials have rejected a U.S. warning that moving closer to the Asian country would be "cutting your own throat".

"We believe there are opportunities to deepen relations, but it's important that China shows sensitivity to European demands for more balanced relations," Sanchez said, referring to the EU's trade deficit with Beijing, which last year exceeded $300 billion.

The EU describes China as a "partner for cooperation, an economic competitor and a systemic rival".

During a press conference at the Spanish embassy in Beijing, Sanchez said the two countries had signed agreements on science, technology, education and the film industry, as well as protocols regarding pork and cherry exports.

According to Xinhua, Xi said Spain and China should tap the potential for cooperation in new energy, high-tech manufacturing and smart cities.

Spain receives crucial Chinese investment flows that are of considerable interest to the EU as they mainly involve advanced technology - such as batteries, electric vehicles and hydrogen - in which the bloc lags behind China.

(Reporting by Joe Cash in Beijing and David Latona in Madrid; Editing by Gareth Jones)