From EuroIntelligence, December 10:
Critiques of the US's foreign policy pivot and China's economic model might have a point, but it won't stop Europe from experiencing the blowback
One of Henry Kissinger’s best-known and most controversial quips, about the Iran-Iraq war, was that it was a pity both sides couldn't lose. Kissinger has a reputation as a cynical but ultimately clear-sighted strategist, but on this point, he is definitely wrong. Discourse about geopolitics is replete with various analogies to zero-sum games – chess, poker, maybe even backgammon. But it isn’t always so. It is very possible to have win-win situations, and perhaps even more so to have lose-lose ones.
In Europe, we would do with keeping this in mind when we assess how to respond to both the US and China. The US’s latest National Security Strategy has caused predictable outrage in the EU. The NSS goes beyond the standard Donald Trump complaint that Europeans are freeloaders. Both the document itself and a more detailed addendum that reportedly existed first are hostile to the EU itself.
It would be easy to dismiss this as bloviating. Parts of the NSS do read like a hissy fit from someone who has spent too much time arguing with self-righteous Europeans on online forums. But Trump’s problem with the EU goes beyond guff about civilisational collapse. It is more fundamental. His approach to diplomacy is transactional, and that is really hard to do with the EU. Decisions take a long time to make between member states if at all. Even when political will exists, the EU’s legal structure often mandates a certain procedure. Announcing a tariff, or dropping it, from one day to the next is not something the EU is capable of doing.
From the outside in, this, and talk of setting up a so-called C5 with China, Russia, Japan, and India, looks like someone burning down their own house because they don’t like the wallpaper. The multilateral world order – including the legal framework underpinning the EU’s existence – exists in large part because of, and to the benefit of, the US. It ties these countries to a US-centric way of doing things that is more durable than the whims of any particular leader or government. The US may give up its ability to demand any price from these countries, but it gains leverage.
But if you’re a fickle and transactional character and you want to deal with people like yourself, you have to realise they are also fickle and transactional. The most obvious flaw in the plan is that if you screw the Europeans, everyone else will be well aware you’d be perfectly willing to screw them too. The NSS also reads like it is premised on the Trump administration being in power forever, which is probably not something China and Russia are banking on. Aside from that, they know the US’s intention is to play them off against each other, because the US keeps loudly announcing it. Why would they fall into this obvious trap?
However, pointing out this will do precisely nothing to stop the Trump administration from ploughing ahead with it if they want to. In Europe, we are dependent on the US in any number of respects – most significantly for our security, but also trade, as European industry depends on trade surpluses on the back of the US. Economically, we have fallen behind the US too, with our productivity suffering after missing out on the tech boom from the 1990s onwards. We have gravely overestimated how much influence we have on the US, something that probably wouldn’t change with a new US administration. Even if the US burns its own house down, if we’re in the spare room we’ll still be set on fire.
The same applies to China. An export-oriented economic model, combined with China’s clear lead on innovation, threatens to wreck European industry. China’s own trade surplus over the EU has grown significantly since the pandemic, and continues to. November customs data show year-on-year growth in Chinese exports to the EU of almost 15%. The trade surplus grew year-on-year by almost 30%. China’s trade surplus in November with Germany, its biggest EU trading partner, was almost 180% higher than a year before....
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