Former Spanish Foreign Minister: Let's be tough on Donald Trump's tariffs

If you look at the number of countries that are knocking on our door, there is a great desire to join the EU. So I don't think we are losers. The fact that the US is particularly targeting the EU also shows that they see Europe as a dangerous - so to speak - rival.

Option number one: let's rely on our domestic market [EU – ed.]. That is entirely in our hands. Let's not depend on the US, on China or on anyone else. We can compensate for every 1% loss of market share in the US by 0.1% deepening of the EU market.

We have the potential to develop because in many sectors, such as services, there are still too many barriers between member states. And if we reduce these barriers, the intensity of trade and services in the EU will be higher. This can create more business opportunities for our companies, when they may have difficulties accessing the American market.

The second option we have is to add more trade agreements to those we have already signed. The Mercosur agreement is very important. Let's add India, Thailand, Malaysia, Australia, Indonesia, the Emirates.

Well, some negotiations take time, but we have some that are already finished. The EU-Mercosur agreement is ready.

Let's not forget that EU trade agreements are approved by qualified majority. Unanimity is not needed here.

Each country will have to analyze them. Given the geopolitical circumstances, each country should look at them very carefully and avoid populism. The most sensitive sector is agriculture, sensitive for Poland, for France, and also for Spanish farmers. But if you look at the concessions made [in the agreement – ​​ed.], they are quite limited. And if you look at the safeguards adopted in the agreement to prevent flooding of the EU market, I think there is [sufficient – ​​ed.] protection there. Each EU member has to make a decision on it, but since we have problems with the American market, we will have to create opportunities elsewhere. So Europe's resilience is entering other markets. The third piece of this puzzle: Trump's tariffs must be fought intelligently.

Together. He doesn't like the EU because he knows that the EU can act together...

I don't care what he says. I care what we do. United, ready to negotiate, but very firm in what we negotiate. It can't be a unilateral "disarmament". You can't give up defending your own interests. For example, the US doesn't like our technology regulations. But these are regulations that have been agreed democratically in the EU by governments and the European Parliament. We will not accept changes to our technology regulations to please the US. There are other sectors where there is a possibility of an agreement with the US. For example, we need to buy more gas. Can we buy it from the US? Perfect.

Spain too. But we have to be firm in defending our interests. Because if we don't, it's not just the US that will learn that we're weak. The rest of the world will learn, too. So if we show weakness, we won't be in a good negotiating position with other countries.

EU-US trade is a two-way street. We have to keep saying it, we have to explain to President Trump that doing business with the EU is good business for the US. But if he doesn't understand that, we should be ready to use our advantages. Not as a first option. The first option should always be to look for an agreement. We trade $4 billion [of goods and services] every day, it's the most important trade relationship in the world, we should protect it. It's important for our companies. But if the US wants to play hardball with us, we should play hardball with them. And services are our ace up our sleeve.

Europeans are not hostile to American technology companies. We benefit greatly from their investments throughout Europe. But this is not about being nice to American big tech. This is about being ready to respond to President Trump if he threatens the European Union. The EU has an anti-coercion instrument that allows the EU to respond to countries that use economic coercion against Europe, which is what the current US administration is doing. This instrument allows the EU to respond using all available means, such as deciding on EU taxation. It also allows the EU to impose fines on companies and restrict some of them from operating in the EU. The EU has the tools it needs to defend its interests, and services may be one sector where they can be used. Obviously, we do not want to punish American companies for providing services, but rather we want to make sure that they put pressure on the US government to stop putting pressure on the European Union.

The US President has no intention of breaking off relations with China.

Pretends to be decoupling.

Until President Biden, the United States was de-risking China. He was imposing restrictions on US-China trade, especially in sectors that could affect defense. The idea was to restrict China from acquiring valuable military technology developed in the US. President Trump decided to do something different. He clearly decided to de-risk, not reduce risk. But that backfired on the US.

Because the US and Chinese economies are very integrated. Most of the consumer electronics in the US come from Asia. But also furniture, toys, textiles, a lot of consumer goods.

Products will be unavailable to consumers. Add to this that a quarter of the world's ingredients that we need for production are imported from China. So the US cannot break with that country. We should not fall into the trap of accepting US pressure to break with China, because we are not able to do that either.

We should have our own policy here. Such a functional policy consists of areas where we deeply disagree, such as human rights, civil liberties. A very sensitive issue that is very important for Europeans: we do not want China to support Russia against Ukraine. This is very important for us and we should put this on the table in our debates with Beijing.

I think so. Maybe we need to do it in a more transparent way because our position on China is not very clear.

Then there's the area of ​​climate change, where I think we can work together. Financial stability around the world is important for them and for us as well. Finally, international trade, but with respect for fair trade.

Let's put it on the table. We need a serious discussion with China: a statement of what we want, a willingness to respond to what they want, and a meeting in the middle. But we need to have our own game plan for China, one that matters to us, not one that matters to someone else.

We say that China is our partner in some issues, but it is our competitor in others and our systemic rival in still other areas.

We need to translate them into specific areas of cooperation, specific areas of difficult negotiations, and specific areas where we will have to agree to disagree.

Banking, finance, telecommunications, insurance, healthcare, education.

There are two big studies by two former Italian prime ministers: the Letta and Draghi reports. They analysed the problems of integrating markets in the EU and made very specific proposals. We could get an additional 2-3% of growth in the EU, depending on how much we are prepared to do in terms of integration. Many of the integration efforts are mainly technical, not political. Basically, each country does things in its own way. They would have to agree to do it in a more European way. Take the example of capital markets...

Or American investors invest in European companies and then decide to close them because they don't want competition.

I agree, it's stupid. But the answer lies neither in Washington nor in Beijing. The answer lies in Brussels.

Their leaders meet in Brussels.

The accession of these neighbours to the EU is also a geopolitical issue. It is not just an economic or legal issue. The lack of progress in their accession creates risks for them and of course for the EU as well. Our enemies know very well that they can cause turmoil among our neighbours and therefore create turmoil in the EU. And since these countries are not members of the EU, we cannot defend them as we would if they were members of the EU. So how can we move forward with EU enlargement? In the past, we have done it on an all-or-nothing basis: either they were in or out. We need to change the accession mechanism and do it gradually. Integrate parts of the economies of these countries as they carry out the necessary reforms. Accustom them to cooperation with the EU and accustom the EU to cooperation with them. And in the meantime, in the EU, carry out the reforms necessary to accept these countries. Accept them when they have done some of this work, and then [include more elements] step by step.

Let's say that if there is an agreement on fishing, [new] countries could integrate into the EU's fisheries policy and participate in discussions on it. Similarly with capital markets: they do their homework, they can participate in discussions on finance. So let's do it step by step, instead of just waiting for new EU members to join until they do everything. In a sense, we are already doing that with Ukraine and defense. If you look at the new proposals for EU armament that the European Commission has put forward, they are already saying: in the case of defense industry, let's treat Ukraine as if it were an EU member.

Exactly.

This is a question for Hungary and any other country that has doubts: does Hungary really want to be part of the European Union? The EU is not a menu of options. It is a menu of fixed dishes. It is three things: economy, solidarity and democracy. You cannot have a good economy and solidarity without democracy. You cannot have democracy without economy. These three things are a package. It is not McDonald's, where you decide whether to add bacon, cheese or lettuce. So I ask myself: does Victor Orban really see Hungary in the EU or not?

But that's not possible. It's very important to clearly define what the EU treaties are. If you don't want the EU treaties, that's fine, you can be outside the EU and have privileged relations with the EU, like Switzerland or Norway. Nobody forces any country to be part of the EU. But if you are, then it's clear what the EU is about. Nobody's hiding that.

Now the treaties allow many things without the need for reforms of the EU. It doesn't actually have to have 35 commissioners [in the future, one for each country, when new ones join – editor's note]. It was the EU Council that decided that in the current Commission there are 27 commissioners [one for each country – editor's note]. So there are things that the treaty obliges, but there are also things that are conventions accepted by the member states. So there is room for maneuver before we start talking about changing the treaties.