Europe Tries to Triangulate Between US and China

Divisions within Europe muddle the effort

A video screen displays French President Emmanuel Macron (bottom left), German Chancellor Olaf Scholz (bottom right), and Chinese leader Xi Jinping (top) attending a video conference to discuss the Ukraine crisis at the Elysee Palace in Paris, on March 8, 2022. Benoit Tessier/AFP via Getty Images

Commentary

When it comes to China trade, part of Europe clearly sees an opportunity, but it is having trouble grasping it. Washington’s efforts to decouple American trade links from China have tempted some European commercial interests to fill the resulting gap.

The Germans seem particularly eager to grasp the opportunity. But difficulties have arisen because Washington is leaning heavily on Europe to follow its lead and because many interests in Europe want to follow Washington for their own reasons. What has emerged is considerable ambiguity about where things will go and a likelihood that the ambiguity will last for quite a while to come.

In European eyes, the United States under the Biden administration has set a radical China policy. Rhetoric in Washington has all but labeled the Chinese regime an “enemy” and accused Beijing of human rights violations, unfair trade practices, as well as outright thefts of intellectual property. The U.S. trade representative has kept in place all the tariffs imposed by the Trump administration on Chinese goods. The White House has challenged Chinese dominance in producing electric vehicles (EVs), putting subsidies in place to encourage EV manufacturing domestically. The recently passed CHIPS for America Act extends subsidies for the manufacture of computer chips in the United States and has further taken steps to block the sale of advanced chipmaking equipment to China. Washington wants Europe (and Japan) to join in such measures. Indeed, the U.S. government is actively negotiating with the Netherlands and Japan to deny China cutting-edge extreme ultraviolet lithography chipmaking equipment.

Europe has ample reason to hesitate before embracing Washington’s lead. China is, after all, the most important source of imports to the European Union (EU). It is the third-largest market for EU products. Europe cannot easily cut itself off from China trade without doing itself considerable harm. National and EU leaderships also chafe at the subsidies for chip and EV manufacturing that the Biden administration has advanced, claiming that they violate World Trade Organization (WTO) rules.

A crane transfers a container to a train of the China Railway Express to Europe in the Chinese border city of Erenhot, Inner Mongolia Region, on April 18, 2019. STR/AFP via Getty Images

But if such practical commercial considerations would otherwise make Europe turn away from American entreaties, other powerful interests in Europe are pushing in Washington’s direction. Security interests within Europe object to what they call Beijing’s “wolf warrior” diplomacy, especially in Asia. Human rights groups object to Beijing’s penchant for internal repression, most extremely against the Uyghurs. These groups preach a much more ‘hawkish” posture toward China and argue that some economic setbacks are worth taking to implement it.

Generally, the European public leans toward an anti-China stance. A recent poll reveals that some 72 percent of European adults see China as a threat to national security, and some 70 percent see it as a threat to Europe’s economy. Some 88 percent called for greater U.S.-European cooperation to counter these threats. Significant as these findings are, there is no guarantee that they will hold sway. European elites have a reputation for ignoring public opinion if not showing outright contempt for it.

Against this background, it is hardly surprising that the EU and other European countries have failed to form a concerted policy on China trade, at least for the time being. The visit to Beijing by European Council President Charles Michel aimed more at quieting the volume of rhetoric than at presenting a coherent policy. Some European leaders have had quite the opposite effect, increasing Beijing’s consternation by visiting Taiwan, perhaps at the behest of “hawkish” elements at home or in a protest of Beijing’s retaliation against Lithuania for accepting a Taiwanese representative office in Vilnius. French President Emmanuel Macron has tried to carve out for himself and France a position between Biden and what can only be described as an ill-defined middle point in elite European thinking. Meanwhile, German Chancellor Olaf Scholz has unilaterally carried a pro-China trade agenda on his visit to Beijing.

The Germans might carry Europe to stand against Washington and promote China trade, perhaps even capture the flows that might otherwise have gone to American interests. To get his, however, Scholz will have a tough row to hoe. EU Commissioner for Industry Thierry Breton has already criticized Scholz, describing him as naïve about China’s agenda. No doubt Washington will describe him that way as well. It seems then that the coming months will see Europe unable to reinforce the American position on China but also too vacillating to undermine Washington’s agenda or its impact on China.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.