The confrontation between the United States and China increasingly shapes the entire international environment. For smaller countries, however, an equally important possibility is that Washington and Beijing manage to stabilise their rivalry and increasingly address issues affecting the rest of the world through bilateral deals.
Originally published in Postimees (Estonian):
Trumpi ja Xi kohtumise eel: täielik iseseisvus pole realistlik ega mõistlik. Millega Euroopa vastab?
Donald Trump and Xi Jinping’s forthcoming meeting in Washington brings this development into particularly sharp focus. Trade, artificial intelligence, technology restrictions, critical minerals, Taiwan and a range of other issues will be on the table, with consequences extending far beyond the bilateral relationship.
Dialogue between great powers is in itself preferable to uncontrolled confrontation. The problem arises when other countries become the objects of their agreements rather than participants in them. This is the modern form of spheres-of-influence politics: not necessarily redrawing maps, but using market access, technology, security guarantees or control over supply chains to constrain the choices available to other countries.
One possible response to this problem was proposed by Canadian Prime Minister Mark Carney in Davos earlier this year. His argument was that middle powers cannot effectively resist pressure from great powers individually. If they want to preserve their freedom of decision, they need to join forces, not necessarily through a new formal bloc, but through a flexible network of cooperation.
For Europe, this fits into the existing debate about strategic autonomy, but changes its meaning. The question should no longer be how Europe can produce as much as possible itself or become independent of others. Complete independence is neither realistic nor economically sensible. What matters more is diversifying dependencies so that no single great power can use them as an instrument of political pressure.
European autonomy would therefore mean not isolation, but a broader network of cooperation with Canada, the United Kingdom, Norway, Japan, South Korea, Australia and other partners.
This would be a considerably more realistic path for Europe than attempting to become a third great power alongside the United States and China. The central question is whether Europe can build a sufficiently strong network of partnerships around itself so that pressure from any one great power cannot force it to make choices contrary to its own interests.
Together, these countries would have considerable power
Individually, almost every potential participant depends on one great power or another. Together, however, they would represent considerable economic and technological strength.
The European Union has a large internal market, industrial capacity, capital and the ability to influence international standards. Canada and Australia are important producers of energy and critical minerals. Japan and South Korea are crucial to semiconductor, battery and electronics supply chains. The United Kingdom has a strong defence industry and financial sector, while Norway brings energy resources and a strategically important location.
The objective of such cooperation should not be to bring all production under its own control. Far more important is avoiding a situation in which a critical sector depends on a single supplier or country.
That is the essence of modern strategic autonomy. Autonomy does not mean eliminating dependence on others. It means ensuring that dependencies are sufficiently diversified and reciprocal that no one can use them as a means of coercion.
Europe does not need to mine every mineral it requires if it has reliable suppliers in Canada and Australia. Nor does it need to manufacture every semiconductor if it has mutually connected supply chains with Japan and South Korea.
What matters is having alternatives.
Economic coercion and its limits
The boundary between economic and security policy is becoming increasingly blurred. Tariffs, export controls, critical raw materials, technology and the financial system have all become instruments of political pressure.
The strength of the United States lies partly in the dollar, technology and security guarantees. China’s strength lies in its market, industrial capacity and control over several critical supply chains.
It is difficult for an individual middle power to resist such pressure. Together, the balance could be different. If economic pressure against one partner triggered a coordinated response from others, alternative supplies or improved access to other markets, the use of coercion would become more costly for the great power applying it.
And this brings us to the greatest weakness of such cooperation.
Would Europe be prepared to defend Canada or Australia if doing so harmed its own companies in the Chinese market? Would those partners support a European country even if that meant a sharper confrontation with Washington?
Economic deterrence works only if the other side believes that the promised response will actually follow. If Washington or Beijing can assume that a country under pressure will ultimately be left alone, much of the purpose of the cooperation disappears.
Europe’s own experience demonstrates how difficult it is to maintain a common position when countries have different economic interests and dependencies. Germany and Lithuania view China-related risks differently. France and Poland do not see relations with the United States in quite the same way either.
Add Canada, Japan, South Korea, Australia and the United Kingdom to that group, and maintaining a common line becomes even more difficult.
There is no common enemy, and perhaps there does not need to be
Such a group of countries would not have a common adversary.
Europe’s immediate security problem is Russia. For Japan and Australia, China is more central. Canada’s greatest economic dependence is on the United States. South Korea’s security is centred on North Korea and the US defence guarantee.
Such cooperation could therefore not function as a NATO-like bloc. But perhaps it does not need to.
The common denominator could be not a shared enemy, but a shared desire to preserve freedom of decision.
That would also imply a more flexible structure. One group of countries might form the core on critical minerals, another on semiconductors, a third on the defence industry and a fourth on artificial intelligence or space technology.
Such variable geometry may sound less ambitious than creating a new formal alliance, but it may be considerably more realistic.
Relations with the great powers will remain complicated
The most delicate relationship would be with the United States, because almost all the potential participants are US allies or very close partners.
It is therefore unrealistic to think of such cooperation as an anti-American bloc. The objective should instead be to reduce asymmetric dependence without damaging the alliance relationship.
Europe may want NATO and the American military presence to remain in place while simultaneously increasing its own defence capabilities. It can use American technology while developing European alternatives. It can regard the United States as its most important ally without wanting Washington to be able to use tariffs, technology or security guarantees to force Europe to change policies that the EU itself considers to be in its interests.
The problem with China would be different.
One of Beijing’s strengths is its ability to negotiate bilaterally with countries in situations where its economic weight is far greater than that of its counterpart. A coordinated network of middle powers would reduce that advantage.
China would therefore probably seek to prevent a common front from emerging rather than confront it directly: offering some countries better market access or investment while applying pressure to others.
The more divergent the participants’ interests, the easier it becomes to play them against one another. If a country under pressure receives no meaningful assistance from its partners, a bilateral agreement with a great power quickly becomes more attractive.
Europe could undermine its own opportunity
The EU has another problem for which neither Washington nor Beijing is required.
Efforts to strengthen European strategic autonomy have increasingly been accompanied by a “Made in Europe” mindset. There is an understandable desire behind this to protect European industry against Chinese subsidies and American protectionism.
But if Europe wants to become the centre of a broader network of middle powers, it needs to decide where “we” ends.
Are Canadian critical minerals part of Europe’s strategic supply chain? Is the British defence industry part of Europe’s defence-industrial base? Is Norwegian energy a European strategic resource?
If European strategic autonomy means concentrating as much production as possible within the borders of the EU’s 27 member states, the result may be a more expensive and protectionist Europe whose partners have less reason to integrate their markets with it.
But if the principle becomes “Made with Europe”, producing together with Europe, the picture changes considerably.
Europe’s independence could then be based not only on its own productive capacity, but on a shared economic space among trusted countries.
The EU should not dominate such a partnership, but serve as its anchor, providing the market, institutional framework and economic weight around which other countries can organise.
Could Europe become the centre of such a system?
The EU has clear advantages in building such a network: a large single market, established institutions, and the ability to negotiate trade agreements, set standards and deploy economic countermeasures.
Its weakness is political fragmentation. Europe’s economic weight becomes geopolitical power only when its 27 member states are prepared to use it collectively. The EU is therefore too large to be simply another middle power, but too fragmented to operate as a traditional great power.
That is precisely why Carney’s proposed model may suit Europe particularly well. The EU should not dominate such a partnership, but serve as its anchor, providing the market, institutional framework and economic weight around which other countries can organise.
For Estonia, this is not an abstract debate
Estonia’s security rests fundamentally on NATO and the American military presence in Europe. Estonia has therefore been right to approach cautiously ideas that could be interpreted as Europe distancing itself from the United States.
But cooperation among middle powers does not have to mean choosing between Europe and America.
Estonia’s interest lies in a system in which its security rests on as many strong pillars as possible: a functioning NATO and American military presence; greater European defence capability; close British, Canadian and Norwegian involvement in European security; Ukraine firmly anchored in Europe’s political and economic space; and stronger ties with Japan, South Korea, Australia and other partners.
The more viable alternatives Estonia and Europe have, the less ability any external power has to influence their decisions.
But for Estonia there is an even more fundamental issue.
A world of spheres of influence is inherently dangerous for small states. If international politics once again accepts the principle that great powers have their own “natural” spheres of influence, and that smaller countries within them must accommodate the special interests of the larger power, Estonia’s position inevitably becomes more uncertain.
A small state’s interest is not in finding the most benevolent hegemon, but in building a system in which any single hegemon has as little veto power as possible over its decisions.
That is why cooperation among middle powers could mean far more for Estonia than simply another debate about European strategic autonomy.
The ambition does not need to be the creation of a new superpower. It would be enough if Europe, together with other middle powers, could raise the economic and political cost of coercion sufficiently that a great power could no longer easily assume that a smaller partner could be cornered on its own.
The difficulties of this approach should not be underestimated. Partners have different interests. Solidarity becomes uncertain as soon as it carries a real economic cost. Europe’s own protectionism could drive partners away. And both the United States and China have numerous tools with which to test the cohesion of such cooperation.
But the alternative may be a world in which larger countries are increasingly free to use markets, technology, finance, raw materials and security guarantees to influence the choices of smaller ones.
In such a world, cooperation among middle powers may not be an idealistic project. It may be one of the few realistic ways to prevent the world from being divided into spheres of influence, not by trying to become another great power, but by making it sufficiently costly for any great power to assume that it can decide for others.
For more analysis on Europe, China and the changing global order, read:
Trump, Xi and Europe: a geopolitical shift already underway