In Spain, the idea of “digital sovereignty” seems to ironically involve relying on Chinese technology while simultaneously imposing restrictions on American tech companies.
Across the EU, there’s a narrative about developing independent systems to counter foreign influence. However, this often translates into regulatory measures that hinder US companies, while simultaneously boosting their dependence on Chinese Communist Party-affiliated suppliers to meet domestic needs that local firms struggle to satisfy.
Spain is really pushing this strategy to the limits.
Chinese telecom giant Huawei is now in collaboration with all major telecom providers in Spain, like Telefonica, Vodafone, and Masmobile. Some of these are partially state-owned. Many Spanish businesses have been using Huawei devices for years, and the company still plays a key role in the rollout of 4G and 5G infrastructure in Spain.
Despite public assurances to the contrary, Chinese companies continue to set up smart transformation stations, fiber optic systems, and enterprise storage networks in Spain, even as the country claims to be shifting focus to Western vendors. In 2023, Huawei initiated a cloud acceleration project in Spain and collaborated with the local government of Rivas-Vaciamadrid to help turn the area into a “smart city.”
Xi Jinping has noted that China recently opened a new “innovation center” in Madrid, marking Spain as an important partner in strengthening its workforce.
However, the most concerning aspect may be a recent contract with Huawei involving the Spanish Ministry of Home Affairs. The province approved a deal worth 12.3 million euros in July to maintain the country’s surveillance and eavesdropping systems. This includes sensitive interception of communications acquired through legal avenues, meaning Huawei is managing technology crucial to law enforcement agencies in Spain.
Despite ongoing warnings from the US and its allies about China’s surveillance capabilities and data collection practices, there’s little indication that NATO allies will trust a company controlled by the CCP to handle domestic surveillance. This puts sensitive personal and governmental data at risk of direct access by Beijing.
Interestingly, even Spain’s own police and security services have voiced concerns regarding this arrangement. Reports indicate that internal police forces described the situation as a “strategic incongruity,” where vital national data is handed over to a company with ties to the Chinese government, despite heightened scrutiny of foreign programs.
Nevertheless, Madrid seems undeterred, moving forward with the deal. Huawei has previously faced accusations related to espionage involving US military bases, as well as violations of US sanctions against Iran and North Korea, providing tools for surveillance to oppressive regimes.
Meanwhile, Spain is still taking revenue from US tech firms through discriminatory taxes and regulations. Back in 2021, Spain implemented a 3% digital services tax on revenues from online advertising and user data, which impacts nearly all major players like Google, Meta, Amazon, and Apple.
A US trade representative found that only two Spanish firms meet the criteria for this tax, calling it an example of “nationality proxy.” In 2023, American companies incurred nearly $300 million under this tax scheme.
The Trump administration has made it clear that these practices wouldn’t go unanswered. A new investigation was ordered over the digital services taxes imposed by Spain and other EU nations, highlighting a violation of US sovereignty and competitiveness that benefits adversaries.
Spain can’t continue to penalize US businesses while claiming to prioritize “sovereignty.” They tax American companies to support their own digital sector and simultaneously rely on Chinese tech. This essentially means taxing a key ally to fund Chinese services, which presents a challenge to NATO security.
If Spain truly seeks a digital future that prioritizes quality, freedom, and security, it must detach from Huawei and the CCP, while embracing fair competition with American firms. If the EU persists in punishing American innovation while courting China, the US is likely to respond.
The notion of sovereignty is being compromised on both sides. The US has made it clear that the era of subsidizing those who act against our shared interests is over.
