Washington will not condone Macron’s early surrender to China

Politico.eu published an article on Monday with quotes from Macron's words that the site had to underline: “ they were all actually said by the president, but some parts of the interview in which the president spoke even more frankly about Taiwan and the strategic autonomy of Europe have been cut by the Elysée ”.

What they were able to report is that Macron declared that: “ Europe must resist pressure to become a follower of America “; the " great risk " that Europe runs is that of remaining " entangled in crises that are not ours, which prevents it from building its strategic autonomy "; Europe has increased its dependence on the United States for arms and energy, and must focus on strengthening its defense industries; and the EU should reduce its dependence on the “extraterritoriality of the dollar ”, because “ if the tensions between the two superpowers heat up […] we will not have the time nor the resources to finance our strategic autonomy and we will become vassals ”. ” A good speech if De Gaulle had made it, and if this policy had begun at the time of the famous General, but which appears out of time in the current EU of which France is, among other things, one of the most enthusiastic supporters.

National security experts point out that Macron sent the wrong signal to China, as he did with Russia in 2022, with which he is still eager to make a deal: Imagine if the US said Ukraine was “a country far away that we know nothing about,” leaving the EU alone – something many Americans still want to do today. Similarly, the EU is divided. France, Germany and Spain want to deepen relations with China, while countries east of Austria and north of Germany (and the Dutch) look to the United States. This could lead to a break at a time when national security transcends the economy. Furthermore, Macron has come too late in his warnings. As we argued in “Crisis of the balance of payments – and of power”, Europe is already in a structurally weak position, similar to that of emerging markets, but without having the vitality and drive for growth.

China is the EU's largest trading partner, but the EU exports twice as much to the US, while Chinese exports are competitive with EU industry; the EU is still negotiating its green products into the US IRA, i.e. still trying to get its products subsidized by US taxpayers. However, the US could easily sanction EU industry when they see it as the expression of a non-compliant policy.
US Treasury officials said " America has a message for countries and companies that still do business with Russia: You are with us or against us ," the same could perhaps be true of Europe vis-à-vis Russia. China: Airbus could suffer like French automakers in Iranian market. After all, Foreign Policy magazine argues that: ' The United States needs economic war advice for China': If Washington wants peace in Asia, it must prepare for financial warfare .”
Then there is another problem which, evidently, Macron pretends to ignore. The EU depends on US defense . Building a real EU army means reorganizing its political economy, massive fiscal spending and a population willing to fight, when Germany claims it will take 50 years to reorganize its armed forces and other countries don't even want to start . The war in Ukraine has revealed how the European defense is silly and does not even have a serious industrial base, its reorganization would break the austerity schemes imposed by France and Germany.
Furthermore, the EU is directly dependent on US gas until 2027, and on the US keeping open the shipping lanes for Middle East energy cargoes . Nuclear would require a serious will to develop it and at least a decade to make it happen. Green energy would only increase dependence on China and the USA.
In finance, we are waiting for some French banks to need a dollar swap line, generously granted by the FED to the ECB so far. At that point the White House will say: “ Le service n'est pas compris”.

However, European decadence and subjection to the USA, which Macron pretends not to consider, are not the responsibility of the USA, but of European governments and the Commission, all for the application of 20 years of austerity and policies unsuitable for half of the countries of the Union, but which satisfied the wishes of Germany and France . What goes well in Berlin, and perhaps also in Paris, does not go well in Rome, Athens, Lisbon, and hinders the economic development of many other countries that have survived only thanks to emigration and remittances. Now Macron thinks he can turn a blind eye and be able to turn the situation around, leaving Washington without any consequences and creating his own political and economic independence as if by magic. An irrational desire that does not take into account the current situation of the Union and the lack of popularity of its foreign policy, seen as hypocritical and selfish.

Meanwhile, Stephen Roach, one of the most optimistic and China-friendly voices in the markets, has just published “ Beijing 's Grim Sense of Resignation “, which also contains notable quotes:

“ For the broad Chinese consensus that I encountered during my visit to Beijing from March 23-28, the air was filled with a grim sense of resignation to the US-China conflict… The Chinese consensus now believes there is well little can be done to stop this worrying negative spiral in the most important bilateral relations in the world. But resignation speaks to a different dimension to the conflict: an acceptance that it is here to stay and that there is very little that can be done to arrest the escalation, let alone find a path to conflict resolution. …. I am left with an uneasy feeling that the Chinese leadership is now struggling to reconcile its core goals of prosperity and global stature with the growing conflict with the United States. There is, of course, a dark side to resignation: a China that has lost hope and is preparing for a far more dangerous phase of conflict escalation: kinetic military action. Luckily, during my recent trip to Beijing, I experienced no such feelings." China has not yet decided on the conflict, but it sees itself stuck in a Thucydides trap which, in some way, will lead it to an economic/financial confrontation, if it goes well, military, if it goes badly, with what follows. Macron's move will appear extremely hostile in the eyes of current US politics because it will be seen as an early surrender of France to Beijing, a sort of half-betrayal, and US policy, especially the DEM, does not forgive and does not forget.

---

---

The article Washington will not forgive Macron's early surrender to China comes from Scenarios Economics .

---

This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/washington-non-perdonera-la-resa-anticipata-di-macron-alla-cina/ on Tue, 11 Apr 2023 16:39:49 +0000.