US-Chinese Competition and Transatlantic Relations
Germany is at risk of sustaining collateral damage in the face of intensifying US-Chinese competition and conﬂict. China’s ascendance and America’s desire to preserve the status quo lock Beijing and Washington into a classic security dilemma. The United States sees China as a potential regional hegemon in Asia and as an emerging global systemic challenger. China sees the United States as impeding its rise. Security competition is already well underway. So are geo-economic and geo-technological competition and conﬂict. For Germany, a position of relative neutrality or equidistance is not an option, it should consider pursuing a multi-track approach.
Below you will find the introduction and the foreword of this report. To read the paper in its entirety – including all infographics, footnotes, and citations – please download the PDF here.
Events, dear boy, events. — Harold Macmillan
In a previous research paper, we presented three long-term scenarios of how US grand strategy and foreign policy might evolve over the next 5 to 15 years and outlined how the respective strategies might affect transatlantic and specifically German-US relations. Over the past year or so, American policy has continued to shift toward what we have called a realist scenario, characterized by intensifying US-Chinese rivalry, a shift of US strategic focus to Asia, and US attempts to get its allies to support a more hawkish China policy geared toward ‘strategic competition.’
Not only has US-Chinese competition intensified, but confronting China is today the single most important plank of America’s grand strategy and foreign policy. True, the Ukraine crisis has forced the United States to pay greater attention to Europe and the transatlantic relationship. But medium- to long-term, US-Chinese competition will be the dominant driver of US policy and strategy. This will have important consequences for transatlantic and German-US relations.
The realist scenario posits that as US-Chinese competition intensifies, Washington will bring greater pressure to bear on its allies to get them to support a more adversarial geopolitical and geo-economic strategy vis-à-vis China. Admittedly, there has so far been only gentle nudging. And the Europeans themselves are currently re-assessing their own relationship with China, not least in the context of Chinese tacit diplomatic support for Russia’s war in Ukraine. As such, Europe has become more receptive to the possibility of a less accommodating policy toward the Middle Kingdom. Whether this will lead America and Europe to see eye to eye on strategy or policy remains to be seen, however.
Meanwhile, the Biden administration has sought to revitalize America’s traditional alliances in Europe and Asia. Several long-running economic disputes between the United States and the EU as well as the United States and Germany have been resolved, paused, or are being tackled (even though new ones loom on the horizon). Washington has sought to foster greater geopolitical and geo-economic cooperation with its allies, acting partially or even largely in view of countering an ascendent China.
At the same time, Washington has not hesitated to take unilateral action and upset its European partners, particularly when these actions were directly or indirectly related to its broader China strategy. Examples include the largely uncoordinated and chaotic Afghanistan pullout and the AUKUS deal between the United States, the United Kingdom, and Australia, which stunned America’s European allies, in particular France. The fact that US pressure on European allies to align with a more hawkish American China policy has been relatively limited to date does not invalidate the logic underpinning the realist scenario.
As US-Chinese competition intensifies, Washington is certain to exert greater pressure on its European allies to support its China strategy. The Biden administration is offering its traditional allies a substantially more cooperative relationship than the Trump administration was willing to allow. But this more cooperative policy needs to be seen in the context of America’s strategic concerns about China. And if this ‘carrot’ fails to garner sufficient European and especially German support, Washington will – so the realist scenario posits – increase the pressure on its allies to broadly support its China-focused grand strategy.
In the context of the so-called Foreign Policy for the Middle Class, the Biden administration has also been intensely focused on domestic rather than foreign policy issues. What may come to be known as the Biden Doctrine seeks to make good on electoral promises to address domestic economic challenges while also strengthening the United States in view of long-term strategic competition with China. Domestic reform and domestic strengthening are seen by Biden as prerequisites for sustaining such competition.
Of the three major scenario drivers we identified – the international system, economic resources, and domestic politics – the international system, or more precisely the shifting international balance of power, remains the most important driver of US strategy. So far, the availability of resources (or lack thereof) does not represent much of a constraint. Finally, while domestic politics has impacted individual foreign policies, its impact on overall US strategy has been limited until now.
Domestic politics currently represents a greater constraint on selected US policies than resource availability. In other words, we are nowhere near the isolationist-protectionist scenario outlined in our previous research, where a combination of resource scarcity and domestic distributional and political conflict would undercut a China-focused US grand strategy. In that scenario, the United States would be led to shift toward unilateralism, protectionism, and, ultimately, isolationism. Quite the opposite is happening today. In an otherwise highly polarized political system, a hawkish China (and Russia) policy is currently just about the only issue capable of garnering bipartisan support. Politics, for now, does seem to stop at water’s edge, as the adage goes.
It is naturally too early to read much into the Biden administration’s policy decisions and policies as far as longer-term US strategy is concerned. Monitoring developments at the margin is nonetheless helpful to see to what extent US policy tracks our scenarios and to evaluate to what extent the scenarios might be in need of adjustment or even broader modification. The evidence so far suggests that the United States is firmly set on the path outlined in the realist scenario, namely a strategic shift toward confronting China, even if the concomitant tensions in transatlantic relations have not yet materialized. If anything, the Ukraine war has strengthened transatlantic relations. But longer-term, the Ukraine war will likely prove a distraction rather than a factor which would force the United States to fundamentally rethink its strategy.
Building on our previous research, this paper will, first, provide a largely descriptive overview of US foreign policy under the Biden administration to assess to what extent our scenarios reflect US policies. This will include looking at the extent to which these policies reflect, or are consistent with, the underlying logic outlined in the realist scenario. Second, the paper will analyze to what extent and in what areas the drivers we previously identified as relevant to this scenario have actually affected US policy. This will also allow us to assess if other critical variables may need to be incorporated into our scenarios. Following description and analysis, we will finally present recommendations for managing the adverse consequences of intensifying US-Chinese great power competition for Germany and Europe.
This paper is the second report of a multi-year research project on the future of transatlantic relations sponsored by the Friede Springer Stiftung. In our first report, we outlined three long-term scenarios for transatlantic relations derived from different US grand strategies: (1) multilateral cooperation, (2) realist competition, and (3) protectionism-isolationism. We find that US foreign policy under President Joe Biden is firmly set on the path outlined in the realist scenario, where US-Chinese great power competition is the primary driver of US strategy. We also find that of the three scenario drivers we identified, it is the ‘international system’ that informs US strategy the most, while ‘domestic politics’ constrains individual policies but not overall strategy. ‘Economic resource availability’ has so far played a negligible role.
The research project was launched during the Trump presidency with a view to the increasing concerns among European policymakers about the future of the transatlantic alliance. With the Biden administration, however, US-European and German-US relations have improved dramatically, even before the Ukraine war. Neo-isolationist, unilateralist, MAGA-style foreign policy advocates continue to exist in US politics but are currently largely marginalized. In fact, confronting China and Russia is one of the very few policies to receive bipartisan support. American public opinion is broadly supportive of cooperating with partners and allies a s well as of countering Russia and China. Nevertheless, the risk of a return of a MAGA-style US foreign policy geared toward unilateralism and the exploitation of security and economic dependencies has not been banished, and the tide could turn again after the 2024 presidential elections.
China’s ascendance and other shifts in the international balance of power are locking Washington and Beijing into security and geo-economic competition and leading the Biden administration to counter China forcefully. Despite the Ukraine war, America’s strategic attention will continue to shift toward Asia. European NATO countries have the economic resources to balance Russia militarily. Meanwhile, the strategic balance in Asia hinges far more on the United States than it does in Europe. This will force America to shift its strategic focus away from Europe and redirect resources to Asia in order to deter China and to maintain the regional status quo.
The need to shift strategic attention and resources to Asia has the potential to lead to transatlantic tensions and even conflict. Undoubtedly, the Ukraine war has led the United States and Europe to move in lockstep. Washington will expect its European allies to align with and support US geo-economic and security policies vis-à-vis China. But short of an outright military conflict, Europe will be hesitant to lend unconditional support to US policies for fear of antagonizing China unduly. From a European perspective, the situation in Asia is very different from that in Europe: China carries far greater economic weight than Russia (Europe’s energy dependence notwithstanding), and Europe feels less immediately threatened by geopolitical competition in Asia than by geopolitical conflict in Eastern Europe.
America’s need to divert resources away from Europe will put Germany in a particularly difficult position. The country’s continued dependence on American military power limits its room for strategic maneuver. Even if transatlantic disagreements remain manageable, the increasing US focus on Asia will force Germany to accept greater responsibility for European security and for balancing and deterring Russia. In this sense, the outbreak of the Ukraine war and the Zeitenwende have facilitated precisely such a strategic adjustment. As Europe’s largest economy, Germany will have little choice but to step up. Berlin can also expect to come under pressure from Washington to actively support US policy on China. Yet Germany’s significant economic dependence on China makes it potentially costly to support US geo-economic policies because this could invite Chinese retaliation.
US-Chinese great power competition will present Europe and especially Germany with challenges. Strategically, Germany should explore the possibility of greater intra-alliance cooperation with America in terms of managing common economic and security vulnerabilities. But Germany must also push for a greater national and European capacity to ensure its own military and economic security.
DGAP Report No. 6, November 3, 2022, 44pp.
This report is part of a project on US foreign policy and its implications for Germany, funded by the Friede Springer Stiftung.