The winner of the 2024 presidential election will inherit an increasingly tense US-China relationship. In spite of a recent uptick in bilateral diplomacy, the tendency in Washington is to view global competition as a zero-sum game: Asia is rising, and so China’s regional power must be countered. On the American right, especially, a growing number of foreign-policy thinkers and strategists believe that this balancing should come in the form of military deterrent.
But while a military “pivot to Asia” may seem rational considering only the balance between Chinese and American forces in the Pacific, enormous economic and military destabilization could follow elsewhere, particularly in Europe, imperiling US power globally. To compete internationally, the United States should focus on rebuilding its domestic manufacturing—and not seek to pressure third countries into a closed economic bloc that would be self-undermining for all its members, Washington included.
China re-entered popular American discourse in 2016, when then-candidate Donald Trump promised to “bring back” the estimated 2 million manufacturing jobs lost to China during the heyday of liberal globalization. Once the Trump administration launched its trade war with China in 2018, Americans’ modestly favorable views toward China collapsed. Since the pandemic, which many blamed on China, favorable views of the Middle Kingdom have plummeted to 15 percent.
Once the “China Shock” was broadly acknowledged, the problem was how to respond. Bringing back the jobs—reindustrializing America—was the straightforward answer, but it was politically impossible. With a Republican Party skeptical of industrial policy and a divided government after 2018, launching a long-term reindustrialization project was a nonstarter. Trade measures began instead, and have been continued by the Biden administration. Though trade war can certainly help domestic industry, it’s a far cry from thorough reindustrialization. Instead, the natural instinct—and the easiest policy to effect through presidential authority alone—is a military flex.
Now, in 2024, dreams of American reindustrialization have been largely deferred. At the same time, the “semiconductor battle” recently undertaken in its place has accelerated, rather than slowed, China’s high-tech progress. With a second Trump administration looking more likely, political strategists are considering how to pressure US allies to join this struggle.
Let’s consider two American approaches to China—call them the “bipolar” and the “multipolar” approaches. In the bipolar approach, Washington would focus its military resolve on preserving the balance of power in Asia, taking this to be the key to a balanced, bipolar world. Third countries—like the European Union’s member states, which trade heavily with China—would be brought under pressure to curtail their economic, technological, cultural, and political links. Europe’s links to China would be seen as a “risk” in the campaign toward “de-risking.” Europe would be compelled to stay within the “American bloc” in an attempt to impose bipolarity on world order.
This approach is sure to backfire.
From a military perspective, an American tilt toward Asia would have to be met by a marked increase in European defense capability. But the goal of Europe’s military self-defense is incompatible with the geopolitical strictures on European economies that would be demanded by Washington. The wartime sanctions regime that has driven up European energy prices is already causing European manufacturing to bleed out.
This isn’t just about home energy prices. Without cheap energy, there would be no European defense sector at home, and European economies wouldn’t be rich enough to afford expensive military systems imported from abroad. Economic suffering is bound to generate political instability.
Bipolar sentiment has already begun to affect European economies. Especially since 2022, trade with geopolitical adversaries has been viewed negatively. First decoupling and now “de-risking” have become buzzwords humming about the corridors of European power. Platforms for peaceful exchange between Europe and China, such as the “17+1” model linking China with Central and Eastern Europe, have withered. In the coming weeks, the United States will bring pressure on the Dutch company ASML to limit its connections with China. South Korea is also caught between American pressure and its strong economic connections with China. As Paul Triolo has pointed out, these attempts at technology control are only heightening the risk of global conflict.
And though European trade with China continues, the opportunity cost around trade restrictions is much higher in Europe than in the United States. Since 1991, the European Union has experienced a much higher growth in dependency on foreign imports, as imports make up almost half of European GDP, according to a recent study from the Hungarian Institute of International Affairs, which I lead. Europe is also about twice as dependent on imports from the BRICS+ countries than the United States is, and more dependent than the United States on BRICS+ capital-goods imports—goods required to make other goods.
In a multipolar strategy, the United States would focus on returning to a position of industrial strength without demanding that other countries decouple or “de-risk” their international trade positions. Such an approach could also build on efforts of the first Trump administration to boost American investment abroad. The US International Development Finance Corporation was a novel effort at creating an American competitor to the Belt and Road Initiative. In order to offer a positive view of global industrial development, the DFC should be expanded.
Across the globe, advanced democracies generally hold less favorable views of China, but the People’s Republic enjoys higher ratings among countries with a large degree of Chinese foreign direct investment. Although China’s Belt and Road Initiative experienced some growing pains, many countries in the Global South have more favorable views of China.
In Hungary, as elsewhere in Central and Eastern Europe, the United States has been offering political pressure while Beijing has, in large part, been building and investing. In the multipolar world, the United States would have to do more of the same—building on its strong cultural capital to show what a good material offer looks like.
“Sanctions and international pressure are having less and less effect.”
If the bipolar viewpoint prevails, the world would face a period of intolerable geopolitical risk combined with economic stagnation and an uncertain environment for businesses. A better alternative would be for the United States to accept that the nature of global competition has changed markedly in the last few years. The techniques of sanctions and international pressure are having less and less effect, while Western military capabilities are being clearly overtaxed.
While talk of global cooperation and connectivity is unpopular in today’s decision-making circles, only a multipolar approach—combining pursuit of national interest with a pragmatic attitude toward international partnerships—can reduce the risk of conflict. And as America is beginning to learn, following a military-first strategy in today’s industrially competitive world is endangering the nation’s global strength.