In the decades following the establishment of the People’s Republic of China in 1949, the Chinese government faced the dual challenges of post-revolutionary reconstruction and the geopolitical tensions of the Cold War. During this period, China’s domestic and foreign policies were shaped by a pursuit of sovereignty, ideological preservation, and economic prosperity. National reforms aimed at industrialization and unification were coupled with an international strategy that balanced forming strategic partnerships with maintaining a low profile in world affairs. These efforts collectively set China on a historically unprecedented path of growth.

By the 1990s, China’s position on the global stage had significantly matured. The 1997 Asian Financial Crisis marked a pivotal shift; in its aftermath, China took the initiative to provide aid to its neighbors, emerging as a stabilizing force with the capacity to foster regional economic security. China’s accession to the World Trade Organization (WTO) in 2001 and its elevation to a World Bank donor role in 2007 further signaled its improved international standing. The defining turning point in China’s rise came with the 2008 Global Financial Crisis, after which its status as a rising great power was solidified. Today, China has developed beyond being merely an economic powerhouse, with Beijing extending its foreign policy to encompass political influence, global responsibility, and strategic credibility.

The United States’ perception of China’s rise has evolved significantly over time. During the Cold War, particularly after the Sino-Soviet split, Washington regarded China as a strategic partner, recognizing the importance of maintaining amicable relations to counterbalance Soviet influence. Following the collapse of the Soviet Union, the 1990s and early 2000s saw the United States aspiring to integrate China into the U.S.-led international order. However, this ambition faltered as the 21st century progressed. China’s economic and political trajectory began to diverge from Western neoliberal ideals, leading skepticism about China’s intentions to shape U.S. foreign policy.

The past decade of U.S.-China relations has been characterized by competition and instability. China has embraced its status as a rising superpower, expanding its bilateral and multilateral ties and establishing institutions such as the Shanghai Cooperation Organization (SCO) and the Asian Infrastructure Investment Bank (AIIB). In response, the United States has sought to counter China’s growing global influence, employing strategies such as the Obama administration’s “Pivot to Asia,” the Trump administration’s trade war, and ongoing efforts to decouple technologically and economically.

The future of U.S.-China relations is likely to witness a further escalation of tensions, defined by decisive efforts from Washington and Beijing to secure their economic, political, and security interests. Both nations will increasingly rely on their connections with other key international players to sustain and expand their global power apparatus. Among the most critical of these players is the European Union (EU), which occupies a unique position in the U.S.-China rivalry.

The European Union’s Strategic Position

Since its formal establishment in 1993, the European Union (EU) has emerged as a major global actor, encompassing 27 member states across Western, Central, and Eastern Europe. The EU accounts for 14% of global trade and plays a pivotal role in coordinating political, economic, and security efforts across the continent. Its influence becomes even more pronounced when examining its relations with the United States and China.

The EU has long been a core strategic partner of the United States. The Transatlantic Declaration of 1990 and the New Transatlantic Agenda of 1995 established a framework for cooperation on shared interests such as international peace, trade and economic globalization, and democracy promotion. This standardization of relations has yielded substantial economic benefits: in 2023, the United States was the EU’s largest export partner and second-largest import partner, with U.S. exports to the EU totaling over $360 billion and imports exceeding $750 billion. The two powers also maintain regular political and security coordination, exemplified by the U.S.-EU Security and Defense Dialogue in December 2023, which reaffirmed their joint commitment to Ukraine, defense investments, and deeper security cooperation.

The stability of the U.S.-EU bond, however, has grown increasingly uncertain amid China’s expanding presence in Europe. Over the past decade, China has become the EU’s second-largest overall trading partner and the largest importer of EU goods, with bilateral trade surpassing $750 billion in 2023. This trade relationship has been accompanied by a significant increase in China’s foreign direct investment (FDI) in the EU, which reached over $4.5 billion in 2023. Furthermore, Beijing has secured the support of numerous EU member states for its multilateral initiatives, with eighteen EU countries joining the AIIB and seventeen participating in China’s Belt and Road Initiative (BRI).

These developments in EU-China cooperation have prompted a critical question: what will the future hold for the European Union’s position between the United States and China?

The Future of EU-China and EU-US Relations

To understand the future of the EU’s strategic position between the United States and China, it is essential to analyze recent developments in its relations with both countries. The EU’s approach to China has shifted significantly since 2019, when it classified China as a “partner for cooperation, an economic competitor, and a systemic rival.” In practice, the latter two designations have taken precedence. The EU has been driven by concerns over the fairness of China’s trade and investment practices, particularly its substantial trade surplus with Europe. These concerns have hindered cooperation, as exemplified by the European Parliament’s decision to reject ratifying the EU-China Comprehensive Agreement on Investment (CAI), despite its signing in late 2020 after seven years of negotiation.

The EU’s relationship with China has been further strained by the 2022 Russian invasion of Ukraine, which sparked criticism of Beijing’s ties with Moscow and heightened concerns over the security implications of China’s influence in Europe. The conflict has led to calls within the EU to remove or limit Chinese technology in European infrastructure. Tensions have also extended to humanitarian issues, with the EU imposing sanctions on China over accusations of human rights violations, prompting retaliatory sanctions from Beijing. These developments reflect the EU’s efforts to distance itself from China, resulting in a closer alignment with U.S. foreign policy trends.

Despite growing apprehension in EU-China affairs, it would be premature to assume that a future of strong EU-U.S. friendship is guaranteed. Foremost, it is important to recognize that the EU is not a monolithic entity. Germany, the EU’s most powerful member state, maintains the closest economic ties with China relative to any other EU member. As such, Germany has generally advocated for a cautious, non-confrontational approach to China, characterized by “relatively small policy interventions” aimed at balancing its trade and market relations. Additionally, while some EU states have moved to reduce dependency on Chinese FDI, others continue to welcome it; Hungary, for example, accounted for 44% of all Chinese FDI in Europe in 2023.

Furthermore, the EU’s historical alignment with the United States has largely rested on three guarantees: economic growth, physical security, and the ontological framing of the United States as a force that preserves liberal democracy and institutions. However, the reliability of these guarantees is increasingly being questioned. The potential re-election of former President Donald Trump is expected to bring about isolationist and protectionist policies that could weaken EU-U.S. cooperation. Trump’s proposed tariff plan, which includes 10 to 20 percent tariffs on all imports and a focus on reducing trade imbalances in the automobile and agriculture sectors, poses a significant threat to Europe’s economic stability. This is particularly concerning for Germany, whose economy heavily relies on automobile exports.

It is also anticipated that Trump will reduce U.S. funding for Ukraine and NATO, thereby weakening the United States’ role as a security guarantor for EU member states. This is likely to coincide with a broader U.S. retreat from multilateral engagements, echoing actions such as the withdrawal from the Paris Climate Accord during Trump’s first presidential term. The U.S. adoption of policies rooted in an “America First” vision is expected to amplify calls within the EU for greater strategic autonomy from Washington. As a result, the United States may increasingly be perceived as neither representative of nor aligned with the EU’s economic, political, and security interests.

Policy Implications

The future of EU-China and EU-U.S. relations will depend on how the EU evaluates the reliability and security of its partnerships with both countries. While the EU has historically aligned with the United States, this alignment can no longer be taken for granted, especially as the EU seeks greater autonomy and member states diverge in their foreign policy approaches. If the United States prioritizes “America First” policies, it should anticipate that the EU may adopt its own “Europe First” agenda, potentially involving deeper engagement with China. However, the United States should avoid punitive measures if the EU does not unanimously support its containment policies toward China, as such actions would only exacerbate divisions between transatlantic partners. Instead, Washington should focus on reaffirming the core principles and shared values between the EU and the United States by establishing mutually acceptable terms for economic, political, and security cooperation.

For China, it would be a mistake to assume that the EU will automatically pivot toward Beijing in response to U.S. retrenchment. The EU’s pursuit of strategic autonomy inherently includes minimizing reliance on China. Additionally, China is likely to continue being viewed as an economic competitor and a security concern. To strengthen ties with the EU, Beijing should prioritize building trust with member states and exploring opportunities for diverse, non-economic partnerships. Areas such as climate change, environmental protection, and people-to-people exchanges present the most promising avenues for collaboration. Initiatives like the EU-China Memorandum of Understanding to Enhance Cooperation on Emissions Trading exemplify the potential for advancing mutual interests. These efforts could establish a foundation of goodwill, creating a platform to address more contentious issues.

Ultimately, the European Union will continue to grapple with the escalating challenge of navigating U.S.-China competition. In this context, the EU may draw inspiration from the strategies of regional blocs like ASEAN, which has recognized both the inevitable costs of choosing sides and the benefits of maintaining neutrality between the United States and China. The EU should resist adopting a Cold War mentality and, rather than aligning itself with rigid spheres of influence, prioritize mutually beneficial cooperation with both powers while safeguarding its autonomy. This approach calls for the EU to adopt a role of strategic balance in U.S.-China relations, striving to protect its own interests while responding flexibly to the antagonisms of a shifting international order.