When China's top leader Xi Jinping returned from a group of 20 summits in Brazil last November, he made a stopover in Casablanca, where he was greeted with a date and milk, a welcome to honorable guests and a meeting with Morocco's Crown Prince Mouley Hassan.
The brief visit is a sign of growing economic ties between China and Morocco, Africa's largest automotive manufacturing hub, and is an increasingly important conduit for Chinese companies seeking to avoid tariffs on exports heading to Europe.
Over the past few years, investments in Morocco from Chinese energy and electric vehicle and battery producers have exploded, with $10 billion directed towards the industry, according to one estimate. Dozens of Chinese companies involved in car manufacturing have set up shops in Morocco, including battery manufacturer Gotion Hi-Tech.
The boom is a sign of growing importance in the country like Morocco, which has a free trade agreement with the European Union, and serves as a combined node for a global trading system that is reworking around high tariffs, trade restrictions and obstacle courses of geopolitical competition.
Use of status as a low or unpleasant zone requires connector countries to take narrow roads, exploiting trade opportunities while minimizing the risk of alienating the West or China. But now that the Trump administration has stomped its foot out of the world's trading system, the path has become far more unstable.
With a surge ahead of many rivals in battery technology, automated driving and entertainment software, Chinese automakers have ambitions to expand across the world, including Latin America, Asia, Europe and Africa.
Even before President Trump's election, the US and Europe were more concerned about how their electric vehicle industry would compete with Chinese companies selling cars at discounted prices. Last year, the Biden administration effectively blocked China's EVs by injecting 100% tariffs on them, and the European Union increased tariffs on China's electric vehicles to up to 45%.
Traps of these types of trade sand are a boon for countries such as Mexico, Vietnam, Thailand, Malaysia, India, Indonesia, Turkey and Morocco, allowing businesses to avoid import operations. For Chinese manufacturers, Morocco is the main connector country of the European Union.
Beijing “want to take advantage of Morocco's important benefits,” said Alexander Kateb, economist and founder of Multipolar Report, a strategic advisory platform.
At the gateway to Europe and Africa, Morocco has been building a “automotive industry ecosystem” for 20 years, Kateb said. The country has a sophisticated transport network that includes ports such as Tanjier reserves and large quantities of phosphates used to produce automobile batteries. The country is also moving quickly to move towards clean energy.
According to the Auto World Journal, Morocco became the leading European Union car exporter in 2023, surpassing China, Japan and India.
French automaker Renault is portrayed with lower labor and energy costs than Europe, and has been manufactured domestically for over 20 years. Stellantis, the automotive group that owns Chrysler and Jeep, has been expanding its footprint in Morocco since 2019.
Ahmed Abdo, assistant fellow at Chatham House's Middle East and North Africa programme, said that “Morocco can now play the same role in Europe,” as Mexico did for manufacturers who tried to avoid US tariffs.
However, sharpening tensions between China and the US and China and Europe have resulted in the difficult balancing acts of Morocco, where economic and geopolitical concerns do not always match. Washington has raised China's tariffs to 145%.
The Trump administration was able to decide to put pressure on Morocco (presumably by threatening higher tariffs) to take a stance.
Morocco “sees China as its main partner,” Abdo said, but it is “aware of the risks” that Trump can close out the country he trades with China.
China's loans and its investments through Belt and Road Initiative helped Morocco's economic development and helped build the Kingdom's infrastructure with projects such as high-speed rail lines, solar power plants and a $10 billion high-tech hub on Tangia. This year, Chinese companies have been chosen to provide steel for the planned $26 billion gas pipeline between Nigeria and Morocco.
At the same time, US strategic partnerships are also a priority for Morocco, Aboudouh said. Morocco is engaged in military exercises with North Atlantic Treaty agencies and works with the United States on counterterrorism. Morocco also wants to source American F-35 stealth fighter jets. Morocco does not welcome China “at the expense of the EU and the US,” he said.
For Morocco, the priority is the Western Sahara, which has fought the independence movement for control over the past 50 years. In exchange for Morocco's normal ties with Israel, Trump would recognize Moroccan sovereignty over the region in 2020, and the government would not want to do anything to put it at risk.
Morocco has been in a free trade agreement with the United States for 20 years. Nevertheless, Trump is subject to the 10% onboard tariffs he has imposed on virtually all imports. However, Morocco is not threatened by additional penalties directed at countries such as Mexico, Vietnam and Thailand.
Meanwhile, China's production continues to increase. This can attract the attention of the Trump administration. In January, a Chinese battery parts manufacturer began pumping components in a new joint venture in Joe Frasfer, near Morocco's Deepwater Commercial Port, which is part of a $2 billion deal signed in 2023.
In October, Chinese tire manufacturer Sentury began production at its new factory in Tangier Tech City. This is the zone that will ultimately house 200 Chinese companies.
And last summer, Chinese battery manufacturer Gotion announced plans to build Africa's first $1.3 billion “GigaFactory.” According to the Moroccan government, its investment could increase to $6.5 billion.
“Morocco has long followed a hedging strategy,” Abdu said between the US and China. “The Biden administration has “showed some tolerance to them” when it comes to China's investment. But if this pilot space is tightened under the Trump administration, “I think they'll pay more attention.”
