European scholar: EU-U.S. relations facing unprecedented challenges

Klaus Larres, Richard M Krasno Distinguished Professor in History & International Affairs at the University of North Carolina at Chapel Hill, Global Europe & Kissinger China Institute Fellow at the Woodrow Wilson Center, recently paid a visit to Chongyang Institute for Financial Studies of Renmin University of China. There he gave an open speech on the U.S.-EU tensions and the challenges and opportunities in China-EU relations.

Here are the excerpts of the transcript:

The current geopolitical situation, especially for the United States and Europe, is difficult. Meanwhile, China also plays a vital role in the relationship between the United States and Europe.

I served at the German Embassy here in Beijing years ago, and it’s very good to be back in Beijing, which gives me the opportunity to talk about it and learn more about the development of China.

Europe-America relations face increasing difficulties since the 2nd Trump administration

Since the end of the Second World War and the beginning of the post Cold-War period, gradually transatlantic relations have declined. In the 1990s, the United States was the most powerful country on earth, and we call that the “unilateral moment of the United States”.

Since China joined the World Trade Organization in 2001, global politic relations have become much more difficult, and that also applies to the Europe-America relations. There were issues like the Iran War, relations with Russia, trade relation, and economic conflicts. All that has led to increasing difficulties.

And there’s one thing to be noted: the 2nd Trump presidency has catapulted these difficulties and speeded up these difficulties.

We do live in a very different world than 10 or 20 years ago, and transatlantic relations are also full of tension. There are various difficulties.

I’ll take the example of NATO. The United States has pushed European countries for years to increase their defense budget. After the full-scale outbreak of the Ukraine crisis in 2022, pressure by President Trump has made European countries increase their defense budget significantly, and even to 5% during the latest NATO summit. And that has led to extremely difficult relations between European countries and the United States.

President Trump has committed to the defense of Europe by means of NATO. And the NATO Article 5 is the most important clause. But over the years, many European countries have insufficient numbers of tanks, rockets, missiles, machine guns and so on.

Article 5, however, says that if one country gets invaded, other countries would come to the help of that invaded country. So this is totally essential for transatlantic relations.

However, President Trump is quite unpredictable… so there is uncertainty in transatlantic security relations. In 2025 NATO Summit held in the Hague, European countries feel much more insecure about their ability to rely on the United States than they ever did before.

Europe is totally dependent on trade with the United States…especially for large countries in Europe like Germany. That means the raising of tariffs by President Trump has brought a lot of fear into European countries because it was clear that it would go to the essence of trade relations of European countries and the United States.

The European Union is certainly not a military superpower, but economically, it still is one of the largest trading blocks in the world with theoretically a lot of potential. Countries like Hungary are not playing by the game, bringing internal difficulties, but on the whole EU remains a significant economic force globally.

European countries will be less rich when exporting to the United States. And this will cause a lot of tension and difficulties.

And then there’s one other aspect. We have difficult security relations, transatlantic relations, and trade relations, and one other factor is Trump himself. Trump is a far-right politician who does not like Europe. He does not like to deal with a supranational organization of 27 countries. This is a complex organization which he doesn’t really understand. So he doesn’t want to deal with three presidents within the European Union.

But Trump likes to deal with the German Chancellor, the British Prime Minister, the French President, because each country is much weaker than all of the European Union taken together. So if Trump can deal with individual leader, he will be in a much better much stronger position. So dealing with the 27 nations of the European Union together doesn’t just confuse him, it also means he has to deal with a very powerful economic bloc.

In fact, security relationships between France, Germany and the United States have been complex and difficult. There is a certain friction within the European Union between more pro-American nations and more skeptical American nations.

After the Second World War, as the U.S. and German economies gradually recover, Germany has had good experiences with the United States, so they are more positive towards the United States.

But France holds the idea that Europe should not be run by an outside power, agitating for strategic autonomy that Europe should become, in security terms, more independent from the United States.

Under the current circumstances, Europe should still have a backup to develop its own strengths.

The UK and France have nuclear weapons, but compared to the United States, very few and very limited ones. So they couldn’t really make up for America’s nuclear arsenal. If the U.S. decides to cut off security relations with Europe, Europeans would have very little intelligence information and very little satellite information, which they could not afford.

So the EU needs to work with the United States because they’re so dependent on the United States. But they’re trying to become more independent in security policy, but it’s a very long time and a very expensive process.

EU’s Complex Mechanisms Limit Its External Cooperation

The invention of the European Union was essentially about peace between France and Germany. And that is still the case until today, and in that respect, the EU has been a huge success, but one can’t imagine that the French would invade Germany or vice versa. More than a hundred years ago that was imaginable, but now it’s totally crazy it really happens.

And also, the EU has managed to get the single market together, meaning that all of the 27 members are treated as one entity in trading relations. A company in Belgium can sell computers to Spain, Germany, or Poland and everywhere in the EU, with only one license and one regulation needed. And that is important for businesses.

And the introduction of the European currency, Euro, also helps the single market. However, within the EU, there is a lot of bureaucracy, competing institutions, and interference from national governments, and that has led to a complicated structure. By its nature, it is hard to find an easy structure for 27 countries to cooperate.

In terms of foreign policy, there is no united European position. It is still led by major countries such as Germany and France. It is not a European foreign policy, and every country has a veto right.

But there is hesitation by the big countries to accept that their foreign policy should be a European foreign policy, and that has been going on for many years. And I believe that they will try to improve on it to get a united foreign policy stand in the future.

Regarding trade relations, individual nation states of Europe have given the European Commission the right to negotiate trade agreements on behalf of all European countries. For example, it is not allowed if the German Chancellor wants to do a trade deal directly with the U.S. President Donald Trump. Because trade agreements are done by the European Commission, by Ursula von der Leyen. So the German Chancellor cannot agree a trade deal with Trump or with China.

China-EU trade: Confront Current Challenges and Deepen Cooperation

In terms of trade, Europe does not rely as much on China as in the past because China may not deliver the goods they want China to deliver. And that has led to a new wave of protectionism, I believe.

But the good news is we still want to cooperate. The 50th anniversary of the EU-China Summit was held in Beijing this year. In fact, both sides meet every year, once in Brussels and once in Beijing, to cooperate, to sort out some problems they have, also to celebrate.

There are also other issues like medical equipment which is not being transferred or not allowed to be exported. And in terms of chip technology and artificial intelligence technology, more cooperation between Europe and China is anticipated.

So I’m not totally unoptimistic. I think trade and economic relations are not without hope. We are going through a very difficult period of time, and we really need to put our efforts into making sure that things do not disintegrate further, but improve significantly again.