Weaker, poorer and less safe—how the coming battle between the US and China could damage Britain and Europe

After three decades of American dominance, we are on the brink of a return of two-power geopolitics—a competition between an America led by the simplistic populist nationalism of Donald Trump and a China that has become steadily more assertive as its economic and political power has grown. Confrontation over markets, power, ideas and systems is inevitable; the challenge will be whether conflict can be avoided, and a form of steady equilibrium achieved.

Don’t look to the Cold War for a model. This is a different rivalry, involving greater strategic interdependence; China is a serious economic competitor for America and a major stakeholder in the status quo. Neither side has an ideological commitment to eliminating the other. Territory and military power will matter, but the competition lies as much in the boardrooms of Alibaba, Huawei, Dell, Google or Lenovo as in the South China Sea, Tehran or Pyongyang. It is a contest for primacy in innovation, regulation and the market for future technologies.

All this should worry Europeans, who have grown used to having a seat at the top table. China and shale gas have brought a fundamental shift in America’s strategic priorities. The solidarity of Western allies is no longer taken as read: Trump’s America is unsentimental, transactional and commercial. If he is reelected this will continue. If he is not, the tone towards allies may change, but the underlying strategic shift of interests will persist.

A plan for Europe

As the two heavyweights square up, Europeans need to find national and shared strategies to adapt to the new conditions and influence them for the good and in our interest. Divided and introspective, we are far from reaching an answer, but here are four guiding principles.

The first goal of European policy should be to avoid being forced into a binary choice between China and the US. The division of the world into two competing and potentially hostile economic, regulatory and security zones of influence would be an enormous reverse for mankind. Our relationship with America remains indispensable, but while we are right to be cautious with a more authoritarian China, we should not withdraw from engagement.

The European Union can and should aspire to position itself as a third global power in trade, market scale, technology and economic regulation. This will require far greater resolve and coherence than the bloc has previously demonstrated. Europe will also need to build defence and other strategic capabilities that re-balance and strengthen the relationship with America without straining it further.

This “third player” option will not be available to Britain outside the EU. The UK will need other ways to exercise leverage and will face acute choices if competitive tensions between the US and China grow, of which the stand-off over Huawei’s role in our telecoms networks is the forerunner. We will frequently take positions close to other European democracies, because our interests and means of influence will remain close to theirs. As well as balancing between China and America, Britain will be balancing between the EU and America.

Secondly, Europe’s avoidance of a binary choice between the two superpowers cannot imply equidistance between them. We are not neutral; we belong to a global partnership of advanced democracies. Our relationships with them—including Trump’s version of America—are of a wholly different quality from those with other countries. It is vital that we preserve this community of democratic values and keep our growing antagonisms in perspective. But Europeans should see that values and soft power are not enough. Geopolitics is a hard-nosed calculus of economic and military strength, shared interests and mutual utility.

The third objective of European policy should be to keep China and the US anchored within a framework of international organisations and rules. In a bilateral fist-fight we will be collateral damage. This requires much more than reciting pious mantras about the importance of the rules based international system. If the collective structures of the last century no longer work, we should look urgently to re-purpose them, or to build new mechanisms, to address the issues of the future: the ownership of data, international taxation, the ethics of AI and machine learning, human trafficking, online harms, climate risk, state based cyber threats, migration.

One-size-fits-all global multilateralism is no longer the default solution. In some areas the EU may lead; in others English-speaking countries; if the US is reluctant, we may seek cooperation among medium-sized democracies like Japan, Canada, France and Germany. But both China and America will need to buy in to what we propose, and the concerns of developing countries must not be sidelined.

Finally, Europeans should recognise that all this is not solely a matter of foreign or defence policy. The new geopolitics will reach far into domestic policy choices on infrastructure, tax, research, supply chains, higher education and data security. Governments and the European institutions need effective structures for coordination across domestic and international policy, combining security and economic considerations, and involving business and other interest groups, to make the complex choices that lie ahead.

It is time to shake off complacency and respond with urgency to this profound and rapid geopolitical change. Europeans need a clear plan, and collective and national mechanisms to deliver it. If we cannot come to the table with strong ideas and capabilities we will end up weaker, poorer and less safe, in a much harsher world.