While American President Donald Trump and Chinese leader Xi Jinping discuss artificial intelligence, trade, and global instability in Washington, Europe is once again reminded of its role as a spectator. The reason: years in which the continent has not capitalized on its potential in defense and technology, writes Lionel Laurent for Bloomberg.
“If we are not at the table, we are on the menu,” warned Canadian Prime Minister Mark Carney at the beginning of the year, in a message addressed to the other “middle powers”. Following this week’s summit, the European Union understands exactly what the leader from Ottawa meant.
Europe’s dependence on American military equipment, such as the F-35 planes, the lack of top-tier technology companies, and internal disputes have caused the EU’s voice to be unheard in the Middle East. The bloc is not even invited to the peace negotiations between Ukraine and Russia and would be powerless without access to American artificial intelligence models. Although since 2020 Europe has doubled its defense spending and encouraged the development of AI, the gap with the USA and Asia has continued to grow.
Commercial risk
The prospect of becoming the “appetizer” on Trump and Xi’s menu is a real threat to the EU and to the President of the European Commission, Ursula von der Leyen. She is concerned about “dangerous dependencies,” such as American gas or the trade deficit with China. The new customs arrangements between Washington and Beijing could lead to an influx of even more cheap Chinese products into Europe, at a time when the “Chinese shock” is already undermining industry and fueling the discontent of the populist electorate.
The European trade protection measures have not prevented Chinese companies such as BYD from achieving a record share in the European car markets. Guangzhou Automobile Group announced that it intends to sell, in France, ten new brands of electric and hybrid cars by 2030.
The EU largely depends on the giants of Silicon Valley and Seattle: Amazon and other companies control 70% of the cloud computing market in the region. In terms of AI, the bloc could end up merely applying rules set by others, if the US and China ever make joint decisions on the pace of development of the most advanced models. It is not at all certain that this will happen, as both sides are competing for technological supremacy, but Brussels could do little about it. Without its own developments in the field, the EU will not have influence.
There is also the risk of a new escalation through the use of trade as a weapon. Trump’s pressures and intimidations, from the idea of taking over Greenland to the role of the US in NATO, are not the only threat. The EU imports approximately 70% of rare metals from China, and Beijing happily uses these resources as leverage against Europe.
Antonio Barroso, from Bloomberg Economics, believes that the stabilization of relations between the US and China and any extension of the trade armistice at the summit could give Xi more freedom to pressure the EU, which is already considering tougher measures against the seemingly unstoppable Chinese export machinery. The European economy, dependent on trade, now appears particularly vulnerable.
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