In Geopolitics Today: Wednesday, September 11th
Spain Shifts Stance on EU Tariffs for Chinese Electric Vehicles, Hungary Secures Russian Oil Supply, and other stories.
Spain Shifts Stance on EU Tariffs for Chinese Electric Vehicles
Spanish Prime Minister Pedro Sanchez has called for the European Union to reconsider proposed import tariffs on Chinese electric vehicles. During a visit to China, Sanchez urged Brussels and Beijing to find a compromise to avoid a trade war. This marks a reversal in Spain's previous support for the tariffs.
The rise of China has led to significant economic and security competition, which is evident in the EU's protective measures against Chinese imports. However, the potential for economic retaliation by China, especially affecting key sectors like Spanish agriculture, underscores the delicate balance nations must strike between safeguarding their industries and maintaining beneficial trade relations. China has already launched anti-dumping investigations into European pork and dairy imports in response. The EU is set to vote in October on duties of up to 36.3% on Chinese EVs.
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Saudi Aramco Expands Downstream Presence in China
Saudi Aramco has signed new agreements with Chinese petrochemical giants Rongsheng Petrochemical and Hengli Group, reinforcing its strategic push into China's downstream sector. The deals include a Development Framework Agreement with Rongsheng for potential joint expansion of the Saudi Aramco Jubail Refinery Company (SASREF) and advancement of talks with Hengli Group regarding Aramco's possible acquisition of a 10% stake in Hengli Petrochemical Co., Ltd.
These agreements are a part of Aramco's global downstream growth strategy, particularly in China, a key demand centre. The partnerships aim to secure long-term crude oil export outlets for Saudi Arabia while simultaneously expanding Aramco's presence in the lucrative Chinese refining and petrochemical markets. This aligns with Aramco's broader strategy of diversifying its portfolio and securing demand in major consumption hubs. Such moves are indicative of Saudi Arabia's efforts to adapt to a changing geopolitical landscape, where energy security and economic integration are paramount.
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Japan Establishes Fleet Information Warfare Command
The Japanese Maritime Self-Defense Forces (JMSDF) has announced a major structural reorganization, with the creation of a Fleet Information Warfare Command (FIWC) by 2025. This new unit will replace the existing Fleet Intelligence Command and incorporate other units including the Oceanography ASW Support Command, Guard Post, and Communications Command. The FIWC, modeled after the US Navy, will comprise 2,000 personnel and focus on electronic warfare, acoustic intelligence, cyber warfare, and C4ISR operations.
This shift reflects Japan's growing emphasis on multi-domain defence capabilities. The FIWC's establishment aims to enhance rapid decision-making and surveillance capabilities across space, cyber, and electromagnetic domains. Through joint exercises with allies like the US, UK, and Australia, Japan is actively preparing for the FIWC's operationalization. This signifies Japan's commitment to modernizing its defence posture and strengthening interoperability with key allies, particularly the United States. The enhancement of military capabilities, especially in information and cyber warfare, is essential for states such as Japan to maintain a competitive edge in the balance of power.
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Hungary Secures Russian Oil Supply
Mol Nyrt., Hungary's leading energy company, has brokered a deal to ensure continued Russian crude oil supply via the Druzhba pipeline, circumventing Ukraine's sanctions on Lukoil. The agreement, effective from 9 September, transfers responsibility for crude delivery from Russian entities to Mol at the Belarus-Ukraine border. This sidesteps Ukraine's recent transit restrictions on Lukoil, which had threatened energy security in the landlocked nations of Hungary and Slovakia.
Hungary and Slovakia, having secured temporary exemptions from EU sanctions on Russian oil, demonstrate their continued reliance on Russian energy despite broader European efforts to reduce dependence. Hungary's position reflects its strategic calculus to maintain energy security while navigating the complex dynamics of EU-Russian relations, illustrating the broader challenge of balancing national interests with geopolitical realities in a volatile Europe. The deal exposes the challenges faced by Ukraine in leveraging its transit position against Russian interests.
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China Deepens Strategic Engagement with Cabo Verde
China has intensified its involvement in Cabo Verde since the early 2010s. Initially focused on military financing and infrastructure projects, Beijing's approach has evolved to emphasise ecological investment, energy, and digital infrastructure. This aligns with China's broader Africa strategy and Cabo Verde's ambitious goal of achieving 100% sustainable energy by 2030. China's engagement includes wind farm installations, solar projects, and initiatives in hydraulics and geothermal energy exploration.
The deepening relationship poses a strategic challenge to the European Union's influence in the archipelago. China's involvement in key sectors such as maritime economic zones, digital infrastructure, and safe city systems directly competes with EU initiatives. Beijing's funding of Praia's Technology Park and collaboration in electric vehicle adoption further cements its role in shaping Cabo Verde's development trajectory. China's rise is characterized by strategic moves that aim to shift the global balance of power in its favour, and its engagement in Cabo Verde reflects this ongoing competition.
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Evolution of Turkey's Defence Industry Partnerships in Europe
Turkey's defence-industrial strategy has undergone significant transformation over the past four decades as Ankara focuses on locally developed equipment. This evolution has reshaped Turkey's relationships with European defence partners. While French, Italian, Dutch, Spanish, and British companies have historically played crucial roles in supporting Turkish defence objectives, recent political tensions have strained some of these partnerships.
Turkey's defence collaborations in Europe are now characterized by divergent approaches. France and the Netherlands have significantly reduced their engagement, while Italy, Spain, and the UK continue to seek opportunities. Concurrently, Turkey is developing new supplier relationships with Eastern European nations like Poland and Romania, driven by shared concerns over Russian threats. This shifting dynamic reflects broader realignments and the growing competitiveness of Turkey's defence industry in global markets, particularly in aerospace and electronics. As Turkey's defence sector matures, future collaborations are likely to evolve towards bilateral partnerships and joint export ventures, rather than large-scale multinational projects.