Technological Cold War: European Union and Emerging Alliances Among Industrial Democracies

The escalation of the trade war by the United States against the People’s Republic of China has thrown out some interesting research puzzles. There is no denying that there is an ascendency in Chinese technological ambitions under President Xi Jinping since 2013 but the American pushback against it has opened up new fronts that are tearing the technological global supply chains. There is a clear bipartisan consensus in the US now to take on the techno-nationalist economic model of China at all costs. This marks a paradigmatic shift in global politics. The era of East-West cooperation which marked the end of the Cold War is now definitely behind and the blatant use of economic tools to forward national security goals is the new normal. The initial criticism the Trump administration faced was not on the issue that they confronted China on its unfair practices but the way they did. The Trump administration unilaterally went ahead without consulting with the EU, European counterparts and East Asian allies. This clearly points to the consensus in US polity that there is a need to confront China but there is the acceptance even in republican circles to take the European allies on board would have been much more effective. The wider question that this paper intends to explore is the shape of the global alliance which will take place in the future given the industrial democracies' unified concerns about the Chinese economic model. The trade war that has been started is not going to be over soon as the chief American goal is to make the Chinese comply under the global trade regime which is the most unlikely scenario. The Chinese Vice-premier and chief trade negotiator Liu He has made it clear that the state-backed enterprises are the backbone of the Chinese development model and they are not going to go back on that. The rise of hardliners within the politburo led by Wang Qishan has already signaled the decoupling from the global supply chains as the most desirable goal. Given the centrality of the trade conflict for the global economic order, the EU’s role is already very crucial. The Huawei 5G rollout and the European apprehension on the role of the Chinese giant has not helped the situation. The Chinese side has issued clear warning to Germany about the repercussions to befall on Germany if they banned Huawei. The weaponization of economic power has been truly realized on the world stage as every major player is exercising it. The paper aims to employ mixed methodology and draws from both qualitative and quantitative methods to create scenario- building simulation to analyze the inception of weaponization of economic power, how this politicization has created global economic faultlines and the role of the European Union in the wider bloc formation in the near future. This exercise will help to further understand the advent of the new technological cold war between the US and China.