It is obvious where the impetus for the new European Commission to spend €100 billion on “European Champions” through the European Future Fund comes from. Europeans are at the end of their tether with President Trump and U.S. threats to impose tariffs on imports from the E.U.
Industrial policy, furthermore, seems to be regaining its intellectual legitimacy on the political left and right. Why should scruples hold Europeans back in the global economic competition?
To be sure, there is a legitimate debate to be had about how innovative and job-creating industries ought to be supported by public policy, including at the European level. However, a growing frustration with the United States is unlikely to be a good guide to such action. Reciprocating possible U.S. tariff hikes with European ones, or making large amounts of funding available to firms that are perfectly capable of securing private investment only to give them an edge over their U.S. competitors, is tantamount to cutting one’s nose off to spite one’s face.
More seriously, a full-fledged European version of protectionism would do further damage to transatlantic relations. There is no question that the current U.S. administration and many E.U. governments have not gotten on well. Disagreements abound over the Iranian nuclear agreement, unfulfilled military-spending commitments, addressing climate change, and other subjects. President Trump has called the E.U. a “foe,” complaining about European trade practices as well as its supposed “currency manipulation.”
As of late, European leaders have started responding in kind. Talk about Europe’s strategic autonomy is commonplace, and German chancellor Angela Merkel has, at least rhetorically, lumped the United States and China together as global rivals to Europe. The Trump presidency has played a salutary role to the extent to which it has provided an overdue geopolitical wake-up call to Europe. But the specific ways in which Europeans are responding to that wake-up call might well damage the partnership.
Yet whatever one thinks of the current U.S. administration, the interests of the United States and Europe are closely aligned on what is arguably the most important geopolitical issue of our age: China. In fact, they also coincide with the interests of other democracies affected by China’s behavior, such as South Korea, Japan, and Australia. All face the same set of challenges from an assertive China: industrial espionage and intellectual-property theft, mercantilist economic practices that are only rarely challenged at the World Trade Organization, and China’s increasingly aggressive military posture in Asia.
It is a paradox that at a time when the case for more coordination between democracies on questions of trade, energy diversification, regulating emerging technologies, promoting human rights, and other issues seems overwhelming, China has been successful in exploiting Western disunity. In Europe, the Chinese government ruthlessly targets the “weakest links” — Italy, Hungary, the Czech Republic — to co-opt the political class through promises of cheap money in the form of infrastructure investment and business opportunities.
Under the radar, China has used transatlantic disunity to push its own priorities in the staffing and agenda setting of important multilateral bodies, largely to deflect potential criticisms and to give its power-seeking behavior a veneer of international legitimacy.
Next year’s election of the director-general of the World Intellectual Property Organization is one example where Americans and Europeans will have to work together to defend their interests. Within the International Telecommunications Union, there is an ongoing battle over government control of the Internet. The UN Human Rights Council never played much of an effective role in pushing against China’s domestic abuses against religious minorities and dissidents — something that has only been exacerbated by U.S. withdrawal.
European governments and the new European Commission have to find ways to work with the pre-2020 and post-2020 administrations in Washington to push back against China’s systematic violations of international norms. Unfortunately, that is becoming harder in the current context. The adversarial rhetoric in European capitals and the United States has become increasingly heated and has also been repeated enough to the point where it has become widely accepted.
The more public money and bureaucratic effort that are expended in line with the dominant political narrative — such as the desire to create “European Champions” — the harder it becomes to roll back or realign, whatever the outcome in the 2020 election in the United States.
Keeping the transatlantic alliance cohesive in a changing world demands concentrated attention and effort from leaders on both sides of the Atlantic. But both sides should remember that it is an exercise worth pursuing, regardless of politics of the moment.
—Scott Cullinane is the executive director of U.S.–Europe Alliance. Dalibor Rohac is a resident scholar at the American Enterprise Institute.