Five Keys to a Transatlantic Agenda on China
Can the United States and Europe get on the same page in responding to China? With the US election looming and China seen as a growing threat to the interests of liberal democracies, European officials are reassessing prospects for transatlantic cooperation after years in which the Trump administration’s disdain for the European Union and international coalition-building prevented meaningful cooperation. Candidate Joe Biden has vowed to repair ties with allies and work more closely on China. But even with a change of administration, the hurdles to cooperation should not be underestimated. What needs to happen for this to work? We lay out five areas where change will be needed on both sides of the Atlantic in order for the US and Europe to come together on one of the biggest challenges of the 21st century: managing the rise of China.
Step 1: Move on From Trump
Although the Obama administration had its “pivot to Asia” and took steps to address US tech exposure to China, it was the Trump administration that elevated China to the top of the US foreign policy agenda. After labelling China a “strategic competitor” and “revisionist power” in its 2017 National Security Strategy, the Trump administration slapped hundreds of billions of dollars in tariffs on Chinese goods, tightened restrictions on Chinese investments, used export controls to limit China’s access to advanced technologies and launched a global campaign against Chinese telecommunications group Huawei. The Trump administration has also targeted Chinese students and academics with visa restrictions and threatened to delist Chinese companies trading on US stock markets if Beijing does not allow for more transparency in their financial accounts. Trump repeatedly rebuffed requests from European allies to work together on China, targeting them with tariffs and sanctions as well. Crucially, the administration has not articulated a clear strategic goal or end game with China. It has left little room for dialogue, triggering fears of a new Cold War or even a military conflict.
Besides a change in tone and greater openness to allies, many Washington insiders are betting that Biden would not change much of Trump’s China playbook. But that is not the case: a Biden administration would need to redefine China strategy on many levels, including laying out a more coherent approach to decoupling—or prudent disengagement—that US businesses and allies understand. Most importantly, a new administration would have to provide greater clarity about the longer-term strategic aim of its China policy. It should pick the elements of Trump’s approach that worked, jettison those that have not, and reframe the US-China narrative.
Traumatized by Trump, European leaders will have to move swiftly to put the tensions of the past four years behind them if there is a change in the White House. They must be prepared to engage with a new administration on China in an active way, coming up with their own ideas about what cooperation with Washington could and should look like—in the economic, digital, security and global public goods realms. Transatlantic communication has broken down during the Trump years. Europe has been in reactive mode, in part because of Trump’s erratic, unpredictable approach to China and foreign policy more generally. In dealing with a new, friendlier administration, Europe should aim to be a full partner in shaping the transatlantic China agenda. This will require a clear view of its own objectives.
Step 2: Language Matters
The Trump administration has framed the US-China competition as an ideological clash of systems. By questioning the legitimacy of China’s Communist Party instead of focusing on its malign behavior, some senior officials in the administration have signaled that political change in Beijing may be the only path for putting relations with Washington back on track. Some officials have also talked about China in racial terms, with the president himself referring to COVID-19 as the “kung flu” or “Chinese virus”. Beyond Trump’s rhetorical excesses, the administration’s language and policies have tended to put all Chinese students, academics and researchers in the United States under a cloud of suspicion. The economic framing has also been extreme, with the president giving the impression that the US could cut itself off completely from China. This ideological, all-or-nothing framing has become a major obstacle to transatlantic and broader international cooperation on China. It will be important for a new administration to reshape this narrative, without undermining the legitimate whole-of-government effort by the Trump administration to push back against China’s policies in the economic and security realm.
In Europe, a rethink is underway about how to speak to and about China. This has led to more outspoken statements in recent months about Beijing’s repression in Xinjiang and its security crackdown in Hong Kong. But after years of self-censorship, European capitals still have work to do in terms of sending clear messages and communicating red lines to China’s leadership. This is all the more important given China’s recent sabre rattling with Taiwan. Some high-ranking politicians in Germany would still prefer to keep economic and political issues separated in a world where technology, trade and security is increasingly interlinked. Some continue to support the discredited notion that ever-closer economic ties will lead China to open up politically. Europe, too, needs to find a new, common language when talking about China. It can reject the concept of extreme decoupling, but as our recent report with the Bertelsmann Stiftung argues, Europe must come up with its own way of defining a more cautious approach to economic engagement with China. Going forward, threats levelled at individual EU states should be treated as threats to all. Member states, like Hungary, that have tried to leverage their ties with China to put pressure on the EU must face firm pushback from Brussels and the big capitals. Despite a hardening of its line on China, the EU will continue to encounter doubts in Washington about its commitment to confronting Beijing unless it stops compartmentalizing the economic and political aspects of the relationship in its rhetoric and policy approach.
Step 3: Practice What You Preach
It will be paramount for a new US administration to restore America’s credibility on the rule of law, democracy and human rights after four years in which Trump flouted and undermined liberal norms and values. The US cannot demand action from the international community on Xinjiang when the president is praising the building of camps behind closed doors. It cannot demand that other countries ban Huawei, while suggesting that the company’s access to the US market could be used as a bargaining chip in trade talks. It cannot credibly condemn the delay of legislative elections in Hong Kong when the president is floating the idea of delaying elections at home. Creating an effective coalition of democratic countries to counter China will depend to a significant degree on a new administration’s ability to restore US credibility as a reliable, trustworthy actor that lives the values it preaches.
The same goes for Europe, which has spoken out about human rights and democratic values, but too often failed to back up its rhetoric with action, particularly when there was an economic price to pay. European politicians have shown a readiness to subjugate business interests when sanctioning Russia for its annexation of Crimea or when negotiating a Brexit deal with Britain, but have been more hesitant to make economic sacrifices when dealing with China. It has not been a political priority in Europe to take a closer look at supply chains, exports of sensitive technologies and R&D collaborations with China. To engage credibly with Washington, Europe will have to back up its rhetoric and examine the full spectrum of its interactions with China. This does not mean that it needs to follow the US down a drastic decoupling path, but neither can it avert its gaze in the face of growing risks from China’s military-civil fusion strategy and links between new technologies and human rights.
Step 4: Accept Some America/Europe First
To make the transatlantic relationship work—on China and a range of other policy challenges—a new US administration will have to accept a degree of “Europe First”. Europe, on the other hand, will have to get used to the idea that some elements of “America First” —hopefully without the nativist, nationalist overtones of recent years—will persist beyond Trump.
After four years in which the US president has painted NATO as a bad deal for the US, wielded extra-territorial sanctions to force alignment with US foreign policy goals, and allowed US Big Tech to grow even bigger, a debate about European “strategic autonomy” has emerged, spanning the digital, economic and security realms. Europe is developing its own digital infrastructure (Gaia-X), discussing ways to reduce its dependence on the US dollar and taking tentative steps to bolster the EU as a defense force. Industrial policy is no longer taboo in Brussels (or in Washington for that matter). Digital and carbon taxes have become part of the policy discussion. A new US administration, even as it seeks to repair ties with Europe, will have to accept that a European push is underway to become more “sovereign”. Not all elements of this push, including EU targeting of US tech firms like Amazon, Facebook and Google, will be welcomed in Washington. But a stronger Europe that takes more responsibility for its own security, invests in innovation and charts its own path on issues as diverse as data privacy and climate change, can end up being a better partner for the United States. It is vital that Washington understands that the push for more European autonomy does not mean that the EU is pursuing a policy of equidistance between the US and China.
Conversely, Europe must accept a United States that prioritizes remedial work to strengthen and rebuild at home: institutions, infrastructure, research & development in industries of the future and society at large are all in need of critical care. In the years ahead, Washington is likely to be more inward looking than at any point since the 1930s, with less bandwidth for the rest of the world, particularly the European theater. Biden is promoting a “Made in America” plan that, as our colleague Daniel Rosen has noted, has populist and protectionist elements to it. The next administration will be coping with the aftermath of a mismanaged COVID-19 crisis that has killed well over 200,000 Americans, plunged millions into unemployment and aggravated societal tensions and economic inequality. With the American electorate deeply divided (regardless of the outcome of the election) Washington will have its hands full. Europe will have to accept that, Trump or no Trump, a rebalancing of American priorities toward the home front is likely to continue.
Step 5: Develop A Positive Agenda
A structured transatlantic agenda is a pre-condition for any meaningful effort by democratic nations to manage the challenges posed by China. For collective action to be possible, European capitals and Washington must go beyond the reactive, defensive approach of recent years and pursue a positive agenda. We suggest five areas where a new US administration and the EU could focus their energies, bringing in like-minded partners including the UK, Japan, Canada, Australia, South Korea and India. The broader the coalition, the more difficult it may be to reach a consensus on these complex issues, but the greater the chance of influencing China’s behavior.
Biden has promised to keep the US in the Paris Climate Accord and make Washington a leader again in the global push to reduce greenhouse gas emissions. His climate plan aims to make the US carbon neutral by 2050, the same year the EU wants to achieve net-zero emissions. Similar to the EU’s plan for a carbon border tax, Biden’s program also foresees the imposition of carbon adjustment fees or quotas on carbon-intensive goods from countries that are failing to meet their environmental obligations. Joint action by the US and Europe, the world’s second and third largest emitters, would raise pressure on Beijing, the world’s top emitter, to live up to its own pledge to be carbon neutral by 2060 and to adopt a more climate-friendly approach in countries that are part of its Belt and Road Initiative.
Biden has said he will reverse Trump’s move to withdraw the US from the World Health Organization, paving the way for the US to join COVAX, the global WHO-backed scheme for the distribution of a COVID-19 vaccine that Trump has shunned. The US and Europe could lead an international push to assess the failures of the global coronavirus response – and demand transparency from China on the origins of COVID-19 – as well as establish cooperation guidelines for future pandemics.
Trade and Technology
There is little appetite on either side of the Atlantic for reviving TTIP, the transatlantic trade agreement that died a slow death in the final years of the Obama administration. Instead the US and EU should focus their energies on two main priorities: building international support for a reform of the World Trade Organization and establishing a transatlantic dialogue on issues at the nexus of trade, investment and technology. This could span issues ranging from export controls and FDI screening, to supply chains, critical infrastructure, advanced technologies and digital standards.
Global South Strategy
Xi Jinping’s Belt and Road Initiative may have lost some of its luster in recent years amid accusations of unsustainable lending and environmental practices. But China’s ambitious project has exposed the lack of alternatives for Asian, African and Latin American countries seeking much-needed infrastructure investment. Both the US and EU have unveiled responses to BRI over the past years, but cooperation has been minimal. The EU and Japan signed a connectivity partnership in 2019. The same year, the US, Japan and Australia unveiled their Blue Dot Network – a scheme to certify quality infrastructure projects. In the post-COVID world, where official funds are sparse, a more joined-up approach that includes both the US and EU will be essential.
China’s influence in multilateral institutions has grown significantly in recent years, as Beijing has moved to fill the gap left by a retreating United States. China now leads four of the 15 UN specialized agencies. Its weight in global standard-setting bodies – long the preserve of the US and its advanced economy allies – has increased at a time when the need for new rules to govern emerging technologies has never been greater. This year, the US and Europe teamed up to defeat a Chinese effort to lead a fifth UN agency, the World Intellectual Property Organization. But a more engaged US approach to multilateral institutions, and a more forward-leaning approach to coalition building within these bodies, will be needed to check China’s growing influence on issues of global governance.