Tariffs set by Donald Trump and Xi Jinping in Washington now loom over Spain’s car industry. The world’s two biggest economies are facing off for the third time since Trump returned to office. The outcome will be decided far from Zaragoza and Vigo; Martorell is farther still. But its impact will reach every Spanish assembly line.
Spain is Europe’s second-biggest car maker. The sector makes up about 10% of Spain’s GDP and supports nearly two million jobs, information from ANFAC. Spanish factories don’t send cars to China; they supply Europe’s single market. That means any change in global tariffs, especially those set in Washington or Beijing, can quickly affect how Spanish-made cars compete. Reuters reports that the current Trump-Xi summit, on September 24, 2026, comes as a fragile trade truce is due to expire in November. Both sides want to avoid another round of tariffs.
At the White House, the agenda covered tariffs and Iran, with artificial intelligence and the auto sector also in focus. Trump called it a chance to tackle “urgent issues,” focusing on security and technology, as well as what he calls “superintelligence.” Xi called for “frank, deep, and continuous” talks. He also announced a plan to invite 100,000 young Americans to China for study and exchange over five years. The day would end with a state dinner, but the real fight was over trade policy. Reuters says the US auto industry has urged the administration to keep Chinese automakers out of the American market, citing national security and the lead to restore US dominance. In 2025, the Biden administration effectively banned Chinese automakers from selling or assembling passenger cars in the US over data security concerns, while maintaining tariffs of over 100% on Chinese electric vehicles, Reuters reported.
For Spain, the threat is direct. The European Union imposed countervailing duties of up to 35.3% on Chinese electric vehicles in October 2024, on top of the standard 10% tariff. These measures aim to offset Chinese state subsidies. But every new tariff or trade deal in Washington or Beijing sends shockwaves through Spanish factories. The stakes are already real: Chinese brands such as Chery have started building cars at Barcelona’s old Nissan plant, working with the Spanish brand Ebro. BYD and MG have also ramped up their registrations in Spain. The big question is whether this investment will continue or the next major factory will be built in the US instead.
At the same time, Brussels and Beijing are discussing a possible minimum-price system to replace some tariffs. The European Commission is considering it to ease tensions while maintaining protection. If talks break down, Chinese cars will continue entering Europe with heavy surcharges. If they succeed, prices could fall quickly and change the market overnight. European automotive and trade reporting has noted that plug-in and regular hybrids from China have so far avoided the higher EU tariffs on battery electric vehicles and remain subject only to the basic 10% rate. This has led to a surge in hybrid imports and prompted new calls from Brussels to close the loophole.
This is not the first time leaders have tried to call a truce. In October 2025, Trump and Xi agreed to pause Chinese controls on rare earth exports during the APEC summit in South Korea. That deal did not resolve the core dispute, which has dragged on at the World Trade Organization since 2018. China still handles about 90% of global rare earth refining. These minerals are impressive for electric motor magnets. Europe, particularly Spain, still relies on these imports. Spain has its own deposits, including Matamulas in Ciudad Real, but they remain untapped.
What comes next hinges on whether the EU and China agree on minimum prices or stick with tariffs, and whether Chinese carmakers keep expanding in Spain. Beijing’s readiness to use rare earths as use again is another factor. The White House summit’s results will be felt on Spain’s factory floors as well as in diplomatic circles.
For those following the car industry’s shift, this standoff shows how Chinese brands aim to shake up the market, as reported earlier. The clash between global trade policy and industrial strategy has moved beyond talk. It directly threatens Spanish manufacturing jobs and investment, with the sector’s future also at stake.
The outcome of the talks will affect whether Spain’s car sector stays strong in Europe or starts to lose ground. The government and industry leaders must handle a world where tariffs, trade deals and moves by Chinese investors could redraw the map for years. For Spain, the stakes are immediate: its factories’ survival depends on decisions made far away, in a contest where economic power is wielded as sharply as any diplomatic tool.
