Renewed harmony between Brussels and Beijing reflects converging economic interests between Europe and China as much as diverging strategic interests between Europe and America, Dan Steinbock writes in an essay for finews.first.

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A day after September 11, «Le Monde» declared that «We are all Americans.» But the honeymoon of shared suffering ended quickly when U.S. military revenge raged across Afghanistan, Iraq, and elsewhere. Instead, a deep and broad transatlantic rift emerged, thanks to bitter disagreements about President George W. Bush’s foreign policy revolution.

Today, many feel an odd sense of déjà vu.

Two months ago, German Chancellor Angela Merkel barely waited for President Donald Trump to leave European soil, to cope with the unfolding Russia scandal at home, before suggesting that Trump’s America was no longer a reliably close ally. An outcry ensued, with analysts on both sides of the Atlantic warning of an epochal shift in relations. Afterwards, Chinese Premier Li Keqiang called for joint efforts to promote globalization during his visit to Germany.

It was this consensus that led China and the European Union (EU) to pave the way to save a global pact against climate change that Trump said he will lead the U.S. out of. European Council President Donald Tusk, Commission President Jean-Claude Juncker and Premier Li pledged that the EU and China would commit to fully implementing the Paris Climate Agreement.

Meanwhile, Washington grew apprehensive. The somber mood was reflected by «The New York Times» headline, «China Sees an Opening in Rift Between Trump and Germany.» As always, the shift was conceptualized as a reaction to a policy vacuum created by Trump. In reality, the ties between Brussels and Beijing have grown closer since the 1990s, even when U.S.-Chinese ties have eased.

Like the U.S., the EU believes in the West’s unique values and interests. But unlike Washington, Brussels does not believe that Europe should serve as a “shining light” to the rest of the world. Brussels does not share Washington's strategic interest in global military superiority. And Europe has only occasionally supported America's messianic regime changes, but usually with costly political aftermaths.

In the past two decades, China has become a key trade partner to both the U.S. States and the EU.

In trading goods, both the U.S. and the EU run a significant deficit with China. In both cases, Chinese imports exceed hundreds of billions of dollars. Yet, the U.S. deficit is almost twice as large as that between the EU and China. Although China has become one of America’s fastest-growing export destinations, EU companies export to China almost twice as frequently as U.S. multinationals.

These trends are even more pronounced if we shift focus from the EU toward its individual member states.

In the post-war era, when the United States briefly dominated almost half of the world economy, it was the leading exporter. With China, the picture has dramatically shifted in the past 15 years, ever since its membership in the World Trade Organization (WTO). A comparison of the major EU member states’ trade exposure to the U.S. and China makes this clear.

The top-eight EU member economies, which account for more than 80 percent of EU growth, continue to export more to the U.S. than to China in relative terms. But Chinese imports are thriving in Europe. The U.K. may export more to U.S. than China, but imports are at the same level. The same goes for Germany, Europe’s growth engine, which is importing as much from China as it is exporting to China; as is France. In Italy, this phenomenon is even more prominent. And Europe’s smaller economies – Spain, Netherlands, Sweden, and Poland – reflect similar trends.

In the coming years, Sino-EU trading ties are likely to increase via goods and services trade, as well as foreign investment. Moreover, as China moves from net exports and investment toward consumption and innovation, the role of European technology companies and brands in China is likely to increase. Sino-EU innovation cooperation could thrive as well.

America and Europe nearly divorced during the Bush era over security disagreements. Today, the calls to break with the U.S. are fueled by a bitter split about economic ties and climate change. This was signaled particularly strongly by a recent Pew report suggesting that the U.S.' image around the world has suffered dramatically since Trump's election. Yet, the view is incomplete because it suggests that the trend is recent and mainly reflects opposition to Trump.

In reality, the U.S. has been moving away from postwar internationalism and free trade towards post-Cold War nationalism and neo-protectionism for years. Trump’s election triumph was based on taking advantage of the trend, but he did not create it. This trend surfaced in the aftermath of Vietnam war, following the 9/11 attacks and the 2008 Iraq troop surge. It has gained strength since the 1990s, as evidenced by longitudinal surveys of U.S. voters. Both European and Chinese leaders regard this as America’s global risk.

Not only Trump is pushing Chancellor Merkel toward China: almost three decades of neoconservative dreams of American Empire, Democrats’ liberal interventionism, and the progressive dissolution of American welfare state since the Ronald Reagan revolution are also weighing. None of these ideas – imperial fantasies, regime change policies, and laissez-faire conservatism – have any substantial support in Europe.

While the transatlantic economies tend to share similar values, their interests are diverging, even as those between China and the EU come together. In the latter case, Beijing, particularly due to the mainland’s interest in global economic integration and addressing climate change, shares far more with the EU than Washington does with Brussels. This shift is not something that should be attributed to Trump alone. It is a divide with roots in the Reagan revolution.

Dan Steinbock is the founder of the Difference Group and has served as the research director at the India, China, and America Institute (U.S.) and as a visiting fellow at the Shanghai Institutes for International Studies (China) and the EU Centre (Singapore). This article was initially released by China-U.S. Focus.

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