It is clear where the incentive for the new European Commission to pay 100€ billion on “European Champions” by the European Future Fund comes from. Europeans are at the end of their rope with President Trump and U.S. threats to inflict tariffs on imports from the E.U. Manufacturing policy, furthermore, seems to be reacquiring its intelligent legitimacy on the political right and left. Why should doubts hold Europeans back in the global economic competition? E.U. and the U.S. have their disagreements, but in today’s world with what goes on, transatlantic cooperation remains crucial.
To be sure, there is a legitimate discussion to be had about how innovative and job-creating enterprises ought to be backed by public policy, including at the European level. Still, developing frustration with the United States is not likely to be a good pilot to such action. Reciprocating possible U.S. tax hikes with European ones, or making great amounts of funding accessible to firms that are perfectly competent of securing private financing only to give them an edge over their U.S. rivals, is equivalent to cutting one’s nose off to spite one’s face.
More severely, a full-fledged European translation of protectionism would do additional damage to transatlantic relations. It is no mystery that the current U.S. government and many E.U. administrations have not always had a great relationship. Disagreements swarm over the Iranian nuclear treaty, unfulfilled military-spending pledges, discussing climate change, and other topics. President Trump has declared the E.U. a “foe,” complaining about European trade systems as well as its supposed “currency manipulation.”
As reported most recently, European administrators have begun responding in kind. Talk about Europe’s strategic independence is commonplace, and Angela Merkel, the German chancellor, has, at least rhetorically, placed the United States and China together as global rivals to Europe. The Trump presidency has performed a helpful role to the degree to which it has provided an overdue geopolitical wake-up alarm to Europe. But the particular ways in which Europeans are reacting to that wake-up call might well ruin the partnership.
Yet whatever one deems of the current U.S. government, the concerns of Europe and the United States are closely joined on what is arguably the most significant geopolitical issue of our day and age: China. As a matter of fact, they also coincide with the interests of other governments affected by China’s performance, such as Australia, South Korea, and Japan. All face the same set of trials from an assertive China: industrial surveillance and intellectual-property theft, mercantilist financial practices that are only seldom challenged at the World Trade Organization, and China’s more aggressive military position in Asia.
It is a mistake that at a time when the case for more coordination among democracies on issues of trade, energy diversification, promoting human rights, regulating emerging technologies, and other issues seem overwhelming, China has been flourishing in exploiting Western disunity. In Europe, the Chinese administration ruthlessly targets the “weakest links” which include Italy, the Czech Republic, and Hungary, to co-opt the political class through commitments of cheap money in the form of base investment and business opportunities.
Under the radar, China has used nonstop disunity to push its own preferences in the staffing and agenda-setting of significant multilateral bodies, mainly to deflect potential critiques and to give its power-seeking ways a veneer of global legitimacy.
The director-general of the World Intellectual Property Organization election next year is one instance where Americans and Europeans will have to work unitedly to secure their interests. Within the International Telecommunications Union, there is a continuous fight over government power of the Internet. The U.N. Human Rights Council never presented much of an effective role in pushing on China’s domestic abuses toward religious minorities and dissidents, something that has only been intensified by U.S. retreat.
European administrators and the new European Commission have to discover ways to serve with the pre-2020 and post-2020 administrations in Washington to drive back upon China’s systematic breaches of international norms. Unfortunately, that is growing harder in the current context. The adversarial eloquence in European capitals and the United States has become more heated and has also been reiterated enough to the point where it has become widely accepted.
The more public capital and bureaucratic exercise that is expended in line with the prevailing political narrative, such as the desire to create “European Champions,” the more difficult it becomes to roll back or realign, whatever the result in the 2020 election in the United States.
Keeping the nonstop alliance cohesive in a dynamic world demands unadulterated attention and effort from administrators on both sides of the Atlantic although both sides should remember that it is an exercise worth pursuing, despite the politics of the moment.