China, not Europe, keeps policy makers in Washington awake at night

Europeans must realise that there is only one issue that keeps policy makers in Washington awake at night: the rise of China. Everything else is secondary. When President Putin invaded Ukraine on February 24, the U.S. came to Ukraine's aid swiftly and generously. To this day, US military, financial and other assistance exceeds Europe's, by far.

During the past half year, Washington has partly reversed its steady withdrawal of US military personnel from Europe since the fall of the Berlin Wall marked the end of the cold war in 1989. But still, Europe is hardly able to protect and defend itself. For all the talk about 'strategic autonomy', Europe's security and defence rely on NATO, an organisation in which the U.S. has long borne the lion's share of costs and responsibility.

As President Biden famously declared, "America is back" in Europe, to help its NATO allies and Ukraine. An additional motive for Washington to prevent a quick Russian victory in Ukraine, White House security adviser Tom Wright suggested in last week's Rachman Review podcast, has to do with China: such a Russian victory would have made the formation of a strong anti-American and anti-Western, Russian-Chinese bloc more likely. Russia is retreating in Ukraine, and China does not want to appear supporting the losing side. Beijing is stepping up its rhetoric and its military exercises to intimidate Taiwan; the last thing President Xi needs now is to tie his fate to an ever-weaker Russia.

From day one of the Ukraine war, both US Democrats and Republicans have been pushing for Europe to contribute more to both the war effort in Ukraine and to its own defence. During the US election campaigns in recent weeks, domestic criticism of America's heavy involvement in Europe has been a resounding theme for both left-leaning Democratic candidates and many Republicans. It would be an illusion to think these voices will be silenced after Joe Biden's strong electoral performance in the Midterms.

Europe needs to work harder to secure its own defence. Washington's calls for European governments to step up their efforts will increase rather than decrease. As a former American defence official said the other day, "We can't fight two wars at once."

There is another area in which America will be more assertive toward Europe, and that is the economy. Even though the Trumpian insults against European companies and governments "stealing American jobs" have subsided, president Biden increasingly wants Washington to focus on fierce rivalry with China. Biden wants to win that race. One of the consequences for Europe, which is suffering an economic cold turkey without cheap Russian gas and heading for a recession, is that it now comes under intense US pressure to do less business with China. President "Make America Great Again" Trump showered European manufacturers with high import tariffs and much verbal abuse. Joe Biden is much more polite. But he, too, is trying to make the United States less dependent on China.

This 'decoupling' means that the US will produce more of its own and reduce imports from China and elsewhere. For example, the Chips Act, which came into effect last August, aims to renationalise computer chip production. And this year's Inflation Reduction Act is designed to do the same for electric car parts. This policy, analysts say, will lead to more state aid and protectionism.

The current, fierce dispute between Brussels and Washington over American tax breaks for those purchasing American electric vehicles — a scheme that appears to suddenly render European-manufactured electric cars uncompetitive — may just be a foretaste of what is to come. For instance, as Europe hurriedly buys more liquefied gas from the United States to compensate for the unavailability of Russian gas, some US policy makers are already calling for this gas to be exclusively reserved for American households and businesses.

All this forces Europe to collectively carve out sound strategies for boosting and protecting its own economy, security and defence in the coming years. At a point in time when it is militarily and economically increasingly dependent on the United States, this will be a challenging exercise.