“Soft Balancing” or “Adaptation”: EU’s Possible Responses to Trump 2.0 by XIONG Wei and WANG Bingjie
In Trump 2.0, the EU needs to reconsider its relations with the U.S. and its strategies facing the dynamics of geopolitical change.
Welcome to the 26th edition of our weekly newsletter! I am SUN Chenghao, a fellow with the Center for International Security and Strategy (CISS) at Tsinghua University, Council Member of The Chinese Association of American Studies and a visiting scholar at the Paul Tsai China Center of Yale Law School (fall 2024).
ChinAffairs+ is a weekly newsletter that shares Chinese academic articles focused on topics such as China’s foreign policy, China-U.S. relations, China-European relations, and more. This newsletter was co-founded by me and my research assistant, ZHANG Xueyu.
Through carefully selected Chinese academic articles, we aim to provide you with key insights into the issues that China’s academic and strategic communities are focused on. We will highlight why each article matters and the most important takeaways. Questions or criticisms may be addressed to sunchenghao@tsinghua.edu.cn
Today, we have selected an article written by XIONG Wei and WANG Bingjie, which focuses on EU’s Possible Responses to Trump 2.0.
Summary
This article explores the potential impacts of Trump’s re-election on the relations between the US and the EU, focusing on analyzing the changes in the relations between the US and the EU as well as their impacts in the fields such as trade, security, energy, and climate change.
The US’ strengthening of its diplomatic unilateralism and trade protectionist policies will have a significant impact on transatlantic trade, security cooperation within NATO, and the global energy market. Meanwhile, the EU may face a higher dependence on the US in terms of economy and security.
When dealing with Trump’s policies, there will be a situation where the two strategies of “soft balancing” and “adaptation” coexist. The EU may balance the influence of the US by promoting multilateralism and expanding other international partnerships. In some key areas, the EU may choose to make compromises to adapt to the policy requirements of the United States. The strategic choices of EU countries in specific fields depend on the strength of multilateralism in those fields and the degree to which they benefit from free trade and globalization, which are worthy of continuous attention and indepth research.
Why it matters
With the arrival of the Trump 2.0 era, the resurgence of U.S. unilateralism and protectionism has placed significant pressure on the European Union in key areas such as economics, technology, and security, prompting a reevaluation of its strategic interactions with the United States. Recently, the diplomatic ties between the U.S. and Russia has become close. For instance, the U.S. voted against the amendment introduced by Ukraine and European countries condemning Russia. Moreover, recent statements by U.S. Vice President Vance and Secretary of Defense regarding European security, NATO’s future, and the Russia-Ukraine conflict have elicited considerable dissatisfaction within Europe.
In this context, this article offers a distinctive perspective on the current international landscape. Its analysis offers theoretical support for understanding the ways that the EU secures its interests. Besides, the authors’ insights not only reflect a profound understanding of international political dynamics within Chinese academic circles, but also serve to enhance overseas scholars’ comprehension of China's policy facing the changes of U.S.-EU relations.
Key Points
The Potential Impact of Trump 2.0 on U.S.-EU Relations
Trade Sector: Escalation of Transatlantic Trade Conflicts
The trade cooperation initiatives promoted by the Biden administration may be abandoned, and the future of the EU-U.S. Trade and Technology Council (TTC) remains uncertain. Both trade and technology cooperation between the two sides could face significant challenges.
In addition, the U.S. may impose high tariffs on the EU without room for negotiation, leaving the EU with no choice but to retaliate or engage in a trade war, which could harm economic growth and investor confidence.
Further, Trump’s unpredictable fashion in decision making may have a negative effect on trade activities, decreasing the accuracy of businesses’ predictions about trade trends.
Security Sector: Intensification of the “Cost Sharing” Issue
In Trump’s second term, the U.S. defense spending is expected to rise significantly, and Trump will focus more and more on comprehensively enhance military might of the U.S. to maintain strong deterrence against enemies and strengthen border security measures domestically. This policy orientation derives from U.S. hegemonic anxiety, which has profound impact on the increase of defence budget in Trump 1.0. Predictably, this trend will continue in Trump 2.0.
Additionally, under Trump’s leadership, the republican party will play a dominant role in national defence policy. In this sense, U.S. defence expenditure is expected to see an increase by 3-5%. At the same time, Trump will also promote more accurate, simple and efficient spending strategy.
Furthermore, Trump will continually build cooperative partnership with private companies and encourage market competition. Also, he aims to establish defence autonomy of American allies and partners. These approaches will ease financial pressure of the U.S., facilitate the development of U.S. military industry, and reinforce U.S. advantageous status in global military competition. However, this could result in renewed pressure on the EU.
Energy and Climate Sector: Resurgence of U.S.-EU Disagreements
Trump pursues a right-wing conservative climate policy, advocating for the integration of energy and environmental policies and opposing multilateral climate cooperation. He once again withdrew from the Paris Agreement, leading to differences with the EU on energy policies and climate goals.
Besides, U.S. energy policy may shift towards ensuring energy security by increasing domestic oil and gas production. While EU energy supply issues with Russia and Iran remain difficult to resolve in the short term, the EU's dependency on the U.S. for energy supplies will continue to grow, placing it in a passive position.
Trump’s deregulatory strategy may affect the normal operations of the U.S. Environmental Protection Agency (EPA) and the transparency of climate risk disclosures by publicly listed companies, impacting market assessments and management of corporate risks.
EU's Increased Dependence on the United States
Military and Security Dependence
Firstly, European countries become more dependent on security protection from the U.S. They rely on the U.S.-led NATO military protection framework, particularly in the face of threats from Russia. Secondly, in terms of military capabilities, Europe is heavily dependent on the U.S. resources in strategic airlift, intelligence, surveillance, and reconnaissance (ISR) systems, missile defense, cyber defense, and space countermeasures. Also, The U.S. nuclear umbrella is central to NATO's deterrence strategy and is vital for European security. Thirdly, the insufficiency of French and German government budget and their lack of initiative further deepen the EU's military, intelligence and economic resources dependence on the U.S.
Economic and Technological Dependence
The United States is the EU’s largest trading partner, with bilateral trade nearing $1 trillion annually. Besides, the U.S. is also the largest source of foreign direct investment (FDI) to the EU, playing a critical role in the EU’s economic development. What’s more, Europe remains highly reliant on the U.S. tech giants in key technological fields such as artificial intelligence (AI), 5G, and cybersecurity.
Europe’s Strategic Responses to Trump 2.0
“Adaptation”（调适 tiáo shì） and “Soft balancing”（软制衡 ruǎn zhì héng） represent two traditional strategies Europe has used to respond to U.S. hegemony. In the context of the Trump 2.0 era, a complex situation has emerged in which both strategies coexist.
Adaptation: Self-adjustment to Align with a Powerful Ally’s Changes
Under the strategy of “adaptaion”, on issues such as energy and security, the EU is likely to continue deepening cooperation with the U.S. As for China-related policies, the EU may coordinate with the U.S., potentially decoupling economically from China in exchange for continued U.S. support for Ukraine. Moreover, in certain key technological fields, such as semiconductors or defence systems, the EU may choose to compromise and coordinate with the U.S. on technology exports or restrictions on Chinese companies.
Soft Balancing: Strengthening Multilateralism and Cooperation with Other Major Powers
Under the strategy of “soft balancing”, the EU aims to counterbalance U.S. unilateralism by emphasizing multilateralism and working with the United Nations and other global powers to uphold international rules in areas such as climate change, trade, and security. First of all, by expanding its diverse trade partnerships, accelerating negotiations for free trade agreements with Asian countries, and enhancing its economic influence in regions such as Latin America, the EU aims to mitigate Trump’s protectionist trade policies and reduce its dependence on the U.S. Additionally, by deepening cooperation with China to enhance its economic competitiveness and position within global supply chains, the EU seeks to reduce potential impacts from U.S. financial sanctions or trade conflicts. Then, by strengthening multilateral diplomacy and participating in various diplomatic forums, Europe seeks to unite with other countries to counter U.S. unilateralism. Finally, by continuously advancing defense integration, the EU aims to reduce its military reliance on the U.S.
The Logic Behind “Soft Balancing” and “Adaptation”
Soft Balancing: The Preference of “Collaboration-type” Game Theory
Drawing on Europe’s experience of reciprocal cooperation, the EU continues to believe in multilateralism taking the shape of the “collaboration-type” game model. It holds that by promoting the establishment of a liberal-based international order globally or engaging in collective action with major powers like China, it can counterbalance U.S. unilateralism.
Adaptation: The Decline of “Collaboration-type” Game Theory and the Rise of Eurosceptic Forces
Internally, Europe has been profoundly affected by the challenges of the European debt crisis, the refugee crisis, and geopolitical tensions. Further, the rapid rise of right wing in Europe brings discord and even polarization, leading to stagnation in internal growth.
Externally, Europe’s economic and technological competitiveness has waned in comparison to the U.S., Japan, South Korea, and China. Furthermore, its value-driven foreign policy has encountered diminishing space for influence in the Global South, and its external normative power has struggled to expand.
Europe also faces resistance from traditional allies like the U.S., and Trump and his supporters have displayed strong conservatism and individual rationality in international cooperation, increasingly putting pressure on Europe’s multilateral “collaboration-type” approach.
Conclusion
Trump 2.0 will have a more profound impact on the EU. The likelihood of EU dependence on the U.S. remains high, and the rise of right-wing forces within Europe may lead to a diversification of political ideologies. The EU will seek cooperation with other major powers in areas where multilateralism still plays a positive role, pursuing “soft balancing” against the U.S. However, in sectors where multilateralism faces significant setbacks, such as defence and relations with Russia, the EU may follow the U.S. and adopt an “adaptation” strategy. China should pay close attention to EU-U.S. interactions and promote the development of China-EU relations, especially in strengthening cooperation in multilateralism.
About the Author
XIONG Wei 熊炜：XIONG Wei is a Professor in the Department of Diplomacy at China Foreign Affairs University, the director for the Lab for Diplomacy Experiments and Data Analysis, and the director for Centre for Comparative Diplomacy of Area Studies. He has authored and edited lots of professional books, including Diplomatic Negotiation (recognized as an Outstanding Undergraduate Textbook in Beijing in 2020), International Public Goods Cooperation and Diplomatic Negotiation, Germany’s Foreign Policy After Unification, Europe and China-Europe Relations in Debate, and The Changing International Order and City Diplomacy. He has published dozens of academic papers in core professional journals and has led or participated in multiple national and provincial-level research projects. His research achievements have been recognized with awards from institutions such as the Ministry of Foreign Affairs and the International Department of the CPC Central Committee.
WANG Bingjie 王冰洁: Wang Bingjie is a lecturer in the Department of German at the School of Foreign Languages, Beijing University of Science and Technology. Her primary research interests include studies on German-speaking countries and European Union nations and regions.
About Publication
Contemporary International Relations （《现代国际关系》）is a comprehensive academic monthly journal on international studies sponsored by the China Institutes of Contemporary International Relations. It has long been listed as the source journal of the Chinese Social Science Citation Index (CSSCI), the Chinese Core journal (International politics) and the core journal of the Evaluation of Chinese Humanities and Social Science Journals (AMI). The CICIR mainly publishes the latest research results of experts and scholars on international strategic issues, international relations theory, world politics, diplomacy, economy, military and major hot issues. The main columns include international politics and security, world economy, relations between major powers, regional and country studies, foreign publications, academic debates, conference information, etc.
