Will the US and Germany Come Together to Confront China?

U.S.-German relations are at a low point. Traditionally regarded as a hallmark of the transatlantic alliance, the partnership between Washington and Berlin has been in turmoil in recent years.

One source of conflict has been China. With tensions rising between Washington and Beijing, the United States under President Donald Trump has begun pushing for an economic disentanglement from China—referred to as “decoupling”—that would roll back 40 years of integration between the two countries. The Trump Administration has also asked U.S. allies in Asia and Europe to take similar actions and isolate the Chinese.

But Germany, like other European countries, has avoided picking sides. Fearful of getting stuck in the crossfire between Washington and Beijing, Berlin has not taken a tough line on Chinese human rights abuses and has opposed excluding Huawei from its 5G network.

There are several reasons for this. One is that completely decoupling from China is not feasible for Germany. Under Chancellor Angela Merkel, Berlin has put Beijing at the center of its strategy in Asia. This has largely been for economic purposes. China accounts for 50% of Germany’s trade with the Indo-Pacific region.

Germany’s reluctance to join the U.S. push against China is also motivated by its deteriorating relationship with the United States. Disagreements over defense spending, trade, and the construction of the Nord Stream 2 gas pipeline, as well as Trump’s recent decision to withdraw troops from Germany, have all caused friction between Berlin and Washington.

In fact, many Germans have started questioning the United States’ importance as a strategic partner. A Pew Research report in May showed that in 2019, 50 percent of Germans prioritized their country’s relationship with the United States, while 24 percent prioritized relations with China. Today, only 37 percent prioritize relations with the United States, while 36 prioritize relations with China.

Changing Times?

Things could be changing, though. With the U.S. and German elections approaching and policymakers on both sides of the Atlantic sensing the need to rethink their countries’ strategies towards Beijing, the time could be coming for leaders in Berlin and Washington to rejoin forces and work on a joint China policy.

Germany, for one, has a strong interest in avoiding friction between the United States and China. Berlin has benefited greatly from the US-led international order that emerged after the Cold War. Living under the US security umbrella, Germany has had the freedom to concentrate on advancing its economic interests abroad. The country has run the world’s largest current account surplus and almost 56 percent of its manufacturing sector jobs are tied to exports. This, however, has also made Germany particularly vulnerable to geopolitical conflict and its impact on global markets.

In addition, Merkel’s China-centric strategy has produced mixed results. Despite fostering economic growth, it has not opened the Chinese market as intended. German companies operating in China have complained about intellectual property theft and forced technology transfers. Meanwhile, negotiations for an investment treaty between the European Union and China have stalled, fueling concerns about EU countries being too economically dependent on Beijing.

This has led figures in the German political establishment to rethink Berlin’s China policy. In early September, Berlin announced a new Indo-Pacific strategy that reduces dependence on China and focuses instead on stronger partnerships with democracies in the region like Japan and South Korea. The strategy not only emphasizes the need to promote the rule of law and open markets, but also includes criticism of the large sums of debt that countries have accumulated through Beijing’s Belt and Road Initiative.

This coincided with growing criticism within Germany of China’s new national security law in Hong Kong and its detention of Uighurs in Xinjiang.

So, with the German 2021 elections approaching and Merkel’s “engagement with China” camp waning, a new government in Berlin could look to move closer to Washington and take a tougher approach towards Beijing.

What About the US?

Across the Atlantic, meanwhile, the presidential election in November could present an opportunity for the United States to alter its own China strategy.

Democratic candidate Joe Biden has been critical of the Trump Administration’s approach to China, saying the White House has unilaterally tried to bully Beijing into submission without building credible support from U.S. allies. The former Vice President, who currently leads in the polls, has said he would shift away from Trump’s unilateral approach and would work more closely with partners in Europe and Asia to press Beijing into altering its behavior.

Germany could play a big role in this strategy. With the world’s single biggest market, Germany is a key player in the European Union. A Biden Administration would certainly want to get the EU on its side in a competition with Beijing over who will set the rules of global digital commerce. Doing so without Berlin on board would be difficult, if not impossible.

Conclusion

So, while relations between Washington and Berlin have declined in recent years, political developments and changing views of China on both sides of the Atlantic could bring the United States and Germany closer together once more.

References:

David Hutt (2020), “As China-EU Relations Sour, a Key Investment Pact Stalls,” World Politics Review. Available at: https://www.worldpoliticsreview.com/articles/28859/as-china-eu-relations-sour-a-key-investment-pact-stalls [Accessed on 21 September 2020]

“Facts About German Foreign Trade,” German Federal Ministry for Economic Affairs and Energy. Available at: https://www.bmwi.de/Redaktion/EN/Publikationen/facts-about-german-foreign-trade.pdf?__blob=publicationFile&v=8 [Accessed on 20 September 2020]

Jacob Poushter and Shannon Schumacher (2020), “Amid Coronavirus Crisis, Americans and Germans See Changing World in Different Ways,” Pew Research Center. Available at: https://www.pewresearch.org/fact-tank/2020/05/18/amid-coronavirus-crisis-americans-and-germans-see-changing-world-in-different-ways/ [Accessed on 20 September 2020]

Jun Ishikawa (2020), “Germany Ends China Honeymoon With New Indo-Pacific Strategy,” Nikkei Asian Review. Available at: https://asia.nikkei.com/Politics/International-relations/Germany-ends-China-honeymoon-with-new-Indo-Pacific-strategy [Accessed on 20 September 2020]

Keith Johnson and Robbie Gramer (2020, “The Great Decoupling,” Foreign Policy. Available at: https://foreignpolicy.com/2020/05/14/china-us-pandemic-economy-tensions-trump-coronavirus-covid-new-cold-war-economics-the-great-decoupling/ [Accessed on 19 September 2020]

Mark Murray (2020), “After a Tumultuous Month of News, Biden Maintains National Lead Over Trump,” NBC News. Available at: https://www.nbcnews.com/politics/meet-the-press/after-tumultuous-month-news-biden-maintains-national-lead-over-trump-n1240501 [Accessed on 20 September 2020]

Noah Barkin (2020), “Germany’s Strategic Gray Zone With China,” Carnegie Europe. Available at: https://carnegieeurope.eu/2020/03/25/germany-s-strategic-gray-zone-with-china-pub-81360 [Accessed on 21 September 2020]

Rene Wagner (2020), “Exclusive: Germany Ran World’s Largest Current Account Surplus in 2019: Ifo,” Reuters. Available at: https://www.reuters.com/article/us-germany-economy-currentaccount-exclus/exclusive-germany-ran-worlds-largest-current-account-surplus-in-2019-ifo-idUSKBN1ZW0UZ [Accessed on 20 September 2020]

The Economist (2020, “Would a Biden administration be softer than Trump on China?” Available at: https://www.economist.com/united-states/2020/07/30/would-a-biden-administration-be-softer-than-trump-on-china [Accessed on 18 August 2020]