While Europe remains closer to the US than it is to China, and while European countries and the US share concerns over China’s economic and geopolitical rise, the transatlantic relationship is far from settled when it comes to developing a coherent response to the challenges posed by China. Obstacles to closer cooperation are present across all four policy areas explored in this project. Although this paper is far from exhaustive, it presents some of the most significant barriers to more effective transatlantic cooperation on China in several policy domains.
Competition between Europe and the US holds back deeper transatlantic cooperation across all policy domains considered. For instance, discussions in Europe on attaining strategic autonomy are often held not so much with China in mind, but the US. Meanwhile, US policy remains broadly one of ‘America First’. This rivalry continues to drive competition in trade and technology, with impacts on normative behaviour in the global commons.
Furthermore, the fractured nature of internal policymaking in the governance structures in both Brussels and Washington remains a hurdle across all of the policy domains studied. While the narrative of the past years has been a growing political consensus in numerous Western countries with regards to China, the reality is that many institutions and sectors in those countries retain different interests – whether they are in the private sector, public sector or are non-governmental in nature. For example, US tech companies continue to depend heavily on Chinese contractors and suppliers, while German automotive firms remain reliant on demand from the Chinese market. On both sides of the Atlantic, influential constituencies believe in a more moderate approach to China, would prefer engagement over confrontation, want economics to be prioritized over human rights or can see the benefits of continued engagement in such areas as environmental protection and resource scarcity.
Paralysis in policymaking is a long-standing complaint about the European and US governing structures. This does indeed place the transatlantic alliance at a disadvantage when facing China’s more top-down decision-making process. While varying perspectives can be found in the Chinese system, the central command structure is more focused and has become stronger during Xi Jinping’s presidency. For example, while European and US authorities struggle to regulate their digital sectors, there has been a dramatic regulatory clampdown on technology companies in China recently. Beijing clearly has greater capacity to bring companies to heel, compared with Western governments. Even if US and European authorities were able to agree a course of action, it is not clear that their private sectors would necessarily follow.
It is worth observing that the transatlantic partnership was able to rapidly mobilize and respond to Russia’s full-scale invasion of Ukraine in February 2022, suggesting that it is not impossible for Western countries to overcome internal disagreements to impose strong and punitive sanctions on an adversary. But it is not clear that China would undertake such a bellicose action as Russia’s to prompt a similar response. It is equally true that Russia’s links with the global economy are not the same as China’s. While there is still deep interdependence between Europe and Russia in certain sectors (for example, in energy), the direction in Europe at the moment is to break this dependence. Nevertheless, the key lesson here is that, in the face of extreme action, Europe and the US can mobilize rapidly, and are willing to accept damage to their own interests in advance of a common goal against an adversarial power.
Across the four policy areas, there is a significant difference in adherence to the existing global multilateral order between the transatlantic partners, as both the US and China have undermined this at certain times. This has led the EU to seek a mediating or leadership role in the policy areas of trade, digital and tech, climate change and global governance. European powers regard themselves as both beneficiaries and champions of the international order and its institutions. They also see the EU as an independent strategic actor and would rather move towards greater autonomy from the US than increase dependence. This sentiment might be stronger under some US administrations than others. But the main lesson for Europe from the Trump presidency was that the US might not always be a reliable actor and partner in international affairs. Even under the Biden presidency, the AUKUS partnership and the chaotic withdrawal of US forces from Afghanistan against European wishes appear to have confirmed the sense among certain EU countries that they lack influence over decision-making in Washington.
It is further important to consider third-party countries in all policy areas – both in Asia and elsewhere. These powers have considerable agency over the issues considered in this paper, and have their own perspectives on the China challenge. For example, Taiwan is crucial to the production of semiconductors, while Japanese and South Korean firms are at the cutting edge of many new technologies. Meanwhile, much of the developing world continues to rely on Chinese suppliers of goods due to their relatively low prices and rapid delivery – which Western companies struggle (or do not want) to compete with.
A solely transatlantic response to China will therefore leave gaps, which will make it impossible to achieve desired outcomes. Cooperation with third countries is already happening in some areas as the transatlantic partners engage more deeply with security issues in the Indo-Pacific region. But even in this case, they do not always take the wider region into account, except China and a small number of large players like India and Japan.
The current lack of trust within the international system makes good-faith engagement difficult. But it is imperative to include China in the global conversation if these problems are to be overcome. China is a now a major part of the global system and this is unlikely to change fundamentally in the medium-term.
Whether the issue is establishing rules on international technology standards, mitigating the next pandemic or governing the global commons, some level of engagement with China will be necessary. On climate change in particular, no comprehensive solution is possible without China. It may prove difficult for Western policymakers to achieve such engagement. But finding a balance between engagement, competing views within the transatlantic alliance and an increasingly assertive China will be the West’s most significant challenge for the next decade or more.
