Europe Repositioning Between US And China In New Global Order

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The bulk of this will rely on the activation of the so-called “national escape clause” . This allows EU member states to escape penalties if they exceed the normal deficit ceiling of 3% of GDP.

Once activated for the purpose of defense spending, they can now take on additional debt of up to 1.5% of their GDP. By the end of April , 12 EU member states had already requested that the national escape clause be activated, with several more expected to follow.

Defense is clearly the most urgent problem for Europe. But it isn't the only aspect to consider when it comes to achieving greater strategic autonomy , something that the European Union has grappled with for more than a decade. In other areas, such as trade and energy, the starting point is a very different one.

Regarding energy independence, the EU has achieved a remarkable and quick pivot away from Russia . It has just released a final plan to stop all remaining gas imports from Russia by the end of 2027.

On trade, Trump's America First tariff policy has done significant damage to the global system. This has, in turn, created opportunities for the EU, as one of the world's largest trading blocs , including greater cooperation with China , already one of its largest trading partners.

Complex relationships

China and the EU clearly share an interest in preserving a global trade regime from which both have benefited. But their economic interests cannot be separated easily from their geopolitical interests. So far, China has sent very mixed signals to Europe.

Beijing has, for example, proposed to lift sanctions against some members of the European Parliament who have been critical of China in a show of goodwill. But China's support for Russia continues as well, most recently with Xi's commitment to visit Moscow for the Victory Day parade on May 9.

Standing with Moscow may benefit Beijing in its rivalry with the US by solidifying the“no-limits partnership” that Xi and Putin announced on the eve of Russia's full-scale invasion in February 2022. But it does little to win the EU over as a partner in defense of the open international order that Trump is trying his best to shutter.

On the contrary, in reaffirming China's commitment to its partnership with Russia, Xi may well have lost whatever chances there were for a European realignment with China.

The complexities of the EU-China and EU-US relationships – a curious mix of rapidly shifting interests – reflect the EU's position as the natural center of gravity of what is left of the West.

This is evident in the rapid evolution of the “coalition of the willing” in support of Ukraine, which brings together 30 countries from across the EU and NATO under French and British leadership.

Beyond Europe, Trump's tariff policy has given plans for a strategic partnership between the EU and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) a new lease of life .

The CPTPP is a group of 11 Indo-Pacific countries and the UK, which joined last December. It is one of the world's largest free trade areas, accounting for approximately 15% of global GDP.

Even without US and Chinese membership, a partnership between the EU and the CPTPP would wield significant power in the global economic system and could play a future role in shielding its members from an intensifying US-China trade war.