Spain must proceed very carefully as it deepens its relationship with China to keep it out of critical sectors such as data, defence and telecommunications where Beijing seeks to dominate, Benjamin Leon, the US Ambassador to Spain, said on Wednesday.

In one of his first public speeches since taking the job in February, Leon raised concerns that public contracts had been awarded to companies working with Huawei, the Chinese tech giant that Washington says poses “an unacceptable risk” to US national security.

“I don’t think that attains the level of security at which Spain and the United States are exchanging (information),” he said.

“If Spain ensures that China is kept out of critical areas, why not negotiate (with Beijing). But I see that they are starting to penetrate into critical areas and Spain must be really careful about this.”

“China seeks to dominate critical technologies. It uses unfair trade practices and economic coercion to expand its strategic influence. And that poses real risks to our supply chains, our research, and our security,” he claimed, calling on Europe to protect its research, intellectual property and democratic values.

China has on numerous occasions denied Washington’s accusations of unfair practices and espionage.

Relations between US President Donald Trump’s administration and Spain’s leftist government have been strained by Madrid’s refusal to adhere to a commitment made by Nato members to raise defence spending to 5 per cent of GDP and to let the US use its military bases and airspace in the war against Iran.

In October, Trump suggested he might apply economic sanctions against Spain for failing to raise defence spending.

Leon said that Spain had “frustrated” Trump, and said the decision on how to proceed was solely the president’s, but played down chances of US economic or military sanctions.

“As I see it, there will always be a compromise between Spain and the United States… One way or the other we will find ways to keep working and improving our relationship,” he said.

He described the US-Spanish naval bases in southern Spain of Rota and Moron as “fundamental bases for our collective defence” amid fears the US drawdown of troops in Europe might impact Spanish installations.

“We live in very dangerous times. Europe must be prepared to defend itself. The US will be at its side,” he said.