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Macron’s ‘Strategic Autonomy’ threatens supply chain fragmentation

Given the heightened geo-political tensions which exist between China, its neighbours in Asia, the US and Europe, French President Emmanuel Macron’s visit to Beijing earlier in the month (April 2023) was always going to be difficult. However, it seems that rather than attempt to undertake any sort of diplomatic balancing act, he preferred to use the visit as an opportunity to set out his own vision of international relations. In doing so, he has caused significant controversy.

Speaking to journalists on the way back from China he said that there was a “great risk” that Europe would, “get caught up in crises that are not ours, which prevents it from building its strategic autonomy.” The specific crisis to which he was referring was, of course, the increasingly troubled relations between China and Taiwan and the role which the US plays in providing protection to what the Chinese government sees as a ‘renegade province’. This was seen as a very clear indication that France – and the EU – would not get involved in a military confrontation if China launched an invasion of the island.

These remarks could not have come at a more sensitive time coinciding as they did with exercises by the Chinese navy in the waters around Taiwan, prompted by the visit of its President Tsai Ing-wen to the USA. The purpose of the exercises were to demonstrate how easily China’s military could blockade the country and ultimately launch an invasion.

Macron’s words have clearly highlighted Western foreign policy divisions over the appropriate response to Chinese military aggression. Beyond this, however, it is useful to examine in more detail what he means by ‘strategic autonomy’ and its implications for global trade relations.

The phrase came to prominence during the Covid-crisis when Europe’s reliance on China for the supply of PPE and certain pharmaceutical products showed the consequences of decades long off-shoring of European manufacturing capabilities and capacity. This was followed by the semi-conductor chip shortage which severely constrained Western automotive production, caused in part by Chinese lockdowns.

Whilst the European Commission has previously echoed the goal of reducing the region’s dependency on China, Macron has now extended the scope of ‘strategic autonomy’ to involve a loosening of security ties with the USA. It seems that he is uneasy about Europe’s increased reliance on American weapons and energy in the wake of Russia’s invasion of Ukraine. His stance has seen him compared to a previous French president, Charles de Gaulle, a comparison which presumably he welcomes.

Whilst Macron claims to speak for the entire European Union, there are, in fact, a multiplicity of views over the future of European external relations. Olaf Scholz, Germany’s Chancellor, has made it clear that global engagement is still critical for his economy given the enormous investment made by German companies in China and in the USA. He would not countenance any decoupling although this has led to criticism that the German economy has become as dependent on China for trade as it was on Russia for cheap energy. Germany’s trade policy is certainly very different to Macron’s more mercantilist approach which is predicated on the goal of building and protecting national ‘heroes’. In contrast, Spain and Netherlands have been wary of protectionism, unsurprising given the open nature of their successful economies and neither would countenance cutting security ties with the USA.

Indeed, many countries in Europe recognize that their security situation is more reliant than ever on America (especially those in the shadow of Russia) and eschew Macron’s ambition of economic and military independence from the USA as unrealistic. Indeed, Poland’s Prime Minister, Mateusz Morawiecki, speaking before a visit to the US asserted strongly that good relations with America were the foundation of European security.

Macron’s de Gaullist ambitions of strategic autonomy have the potential to drive a wedge not only between the European Union and the US, but between European Union members. It would be tempting to believe that the West would once again be able to coalesce around common foreign, trade and security policies. However, it comes at a time of other EU-US disagreements concerning subsidies (the US Inflation Reduction Act) and protectionism (the EU’s Carbon Border Adjustment Mechanism). This fracturing of the world’s trading regime not only shows weakness in the face of challenges from China and Russia but will also create an increasingly uncertain and hazardous business environment for global manufacturers and retailers.

John Manners-Bell’s latest book The Death of Globalization will be published in May 2023. To pre-order a copy follow the link.

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