Donald Trump uses America’s military and technological superiority to impose unilateral agreements on Europe.
After the defeat suffered against the British in the First Opium War, the Qing dynasty signed a treaty in 1842 that condemned China to over 100 years of oppression and colonial control over trade policies.
This was the first of what became known as "unequal treaties," where military aggression and technological superiority at that time imposed unilateral terms in an attempt to reduce the massive trade deficit.
Sound familiar? Nearly two centuries later, the EU is beginning to understand exactly what this means, writes Politico.
The visit last month of the President of the European Commission, Ursula von der Leyen, to Donald Trump's Turnberry golf resort in Scotland to conclude an extremely unbalanced trade deal has raised fears among politicians and analysts that Europe has lost the advantage it once believed it had as a top global trading power.
Critics of von der Leyen have stated that accepting Trump's 15% tariff on most European goods amounted to an act of "submission," a "clear political defeat for the EU," and an "ideological and moral capitulation."
If she hoped this would keep the US president at bay, she had a brutal awakening to reality. With the ink barely dry on the trade deal, Trump upped the ante on Monday, threatening to impose new tariffs on the EU due to digital regulations that would affect American tech giants.
If the EU does not comply, he warned, the US will stop exporting vital microchip technologies.
His move came less than a week after Brussels thought it had obtained a written guarantee from Washington that its digital regulation - and sovereignty - were safe.
Europe repeating China's mistakes
Trump can use this coercive advantage because - like the British imperialists of the 19th century - he holds military and technological aces and is aware that the opposing side lags far behind in both sectors.
He knows that Europe does not want to confront Vladimir Putin without American military support and cannot cope without American chip technology, so he feels he can dictate the trade agenda.
The trade deal is a "direct consequence of Europe's weakness on the security front, that it cannot ensure its own military security and has failed to invest in its own security for 20 years," said Thorsten Benner, director at the Global Public Policy Institute in Berlin, who also highlighted failures in investments in "technological power" and deepening the single market.
Like the Qing leadership, Europe has also ignored warning signs over many years.
"We are paying the price for ignoring the wake-up call during the first Trump administration - and going back to sleep. And I hope that's not what we're doing now," said Sabine Weyand, Director-General for Trade at the European Commission, during a debate at the European Forum Alpbach.
It is clear that Trump's volatile tariff game is far from over, and the bloc of 27 is destined to face new political challenges and uneven negotiation outcomes this autumn. To prevent further humiliation, the EU faces a huge problem - it must reduce its dependency on the US - in defense, technology, and finance.
EU decades behind the US
The Treaty of Nanking, signed under duress in 1842 aboard HMS Cornwallis, a British warship anchored in the Yangtze River, forced the Chinese to cede Hong Kong territory to the British colonizers, pay them compensation, and accept a "fair and reasonable" tariff.
British merchants were allowed to trade in five "treaty ports" - with anyone they pleased.
The Opium War triggered what China called the "century of humiliation." The British forced the Chinese to open up to devastating opium trade to help London recover from the deficit caused by silver transactions with China. That era still haunts China and motivates its strategic policymaking both domestically and internationally.
A key factor that forced the Qing dynasty to submit was its failure to invest in military and technological progress.
China's Emperor Qianlong told the British in 1793 that China did not need the "barbarian products" of other nations.
Although gunpowder and firearms were Chinese inventions, the lack of experimentation and innovation slowed their development - meaning that Qing weapons were about 200 years behind British weapons in terms of design, manufacturing, and technology.
Similarly, the EU is now being punished for lagging decades behind the US.
A drastic reduction in defense spending after the Cold War kept European countries dependent on the American military for security; complacency regarding technological advancements means that the EU is now behind its global rivals in almost all critical technologies.
American Trade Representative Jamieson Greer, on the other hand, proclaimed the beginning of a new world order - which he called the "Turnberry system" - comparing the US-EU trade deal to the post-war financial system devised at the Bretton Woods resort in New England in 1944.
Turbulence ahead
Through his Monday attack, Trump demonstrated a lack of respect for the EU's desire to exclude sensitive aspects from the joint statement.
Meanwhile, the ambiguity of the four-page text leaves him enough room to impose new requirements or threaten reprisals if he feels the EU is not holding up its end of the bargain.
More humiliations could follow as the two sides try to resolve various details - from a tariff quota system for steel and aluminum to exemptions for certain sectors - that still need to be worked out, experts estimate.
"This agreement is so vague that there are many points where conflicts could easily escalate to then be used as justification for other things that will not be carried out," said Niclas Poitiers, a researcher at the Bruegel think tank.
Asked what would happen if the EU failed to invest the promised $600 billion in the US, Trump said earlier this month, "Well, then they pay a 35% tariff."
The EU is well aware of this danger. The European Commission argues that the $600 billion figure simply reflects the general intentions of the corporate sector, which cannot be imposed by bureaucrats in Brussels.
However, Trump could use the promise of investments as a trigger for higher new tariffs.
"We expect new turbulence. But we believe we have a very clear insurance policy," said a senior EU official speaking on condition of anonymity.
Furthermore, by accepting the deal, presented by the EU Executive as the "lesser evil" option following Trump's tariff threats, Brussels has also shown that blackmail works.
Beijing will watch developments with interest - just as EU-China relations have hit a new low, and Beijing's dominance over the minerals needed by the West for its ecological, digital, and defense ambitions gives it immense geopolitical leverage.
But what can the EU, if it can do anything at all, do to avoid prolonging its period of geopolitical weakness?
Europe must invest heavily
In the lead-up to the agreement, von der Leyen repeatedly emphasized that the EU's strategy in its relationship with the US should be based on three elements: preparing retaliatory measures, diversifying trade partners, and strengthening the bloc's single market.
For some, the EU must see the agreement as a wake-up call to initiate profound changes and boost the bloc's competitiveness through institutional reform, as highlighted last year in the reference reports drafted by former European Central Bank chief Mario Draghi and former Italian Prime Minister Enrico Letta.
In response to the agreement, Draghi issued a strong warning, stating that Trump's clear ability to force the bloc to fulfill his wishes is conclusive evidence that it is in danger of becoming irrelevant if it cannot organize its actions.
Furthermore, Draghi emphasized deficiencies in security: "Europe is ill-equipped in a world where international relations are inspired by geoeconomics, security, and the stability of supply sources, rather than efficiency," he said.
Eamon Drumm, a research analyst at the German Marshall Fund, also addressed this issue. "Europe must consider its business environment as a geopolitical asset that needs to be strengthened," he said.
To achieve this, investments in infrastructure, demand, and European companies are needed, Drumm argued: "This means reducing energy prices, better utilizing European savings for investments in European companies, and completing the integration of capital markets."
EU still has choices to make
For others, the response lies in deepening and diversifying the trading relationships of the EU - Brussels insists that the publication of its trade agreement with the Mercosur bloc, made up of South American countries, is imminent and is considering agreements with Indonesia, India, and other countries this year.
Additionally, the EU has signaled openness to intensifying trade with the CPTPP bloc, focused on Asia, which includes Canada, Japan, Mexico, Australia, and others as members.
"In addition to modernizing the [World Trade Organization], the EU really needs to focus on continuing to build its network of trade agreements with trusted partners," said Bernd Lange, a German social democrat who chairs the European Parliament's Trade Committee.
"To stabilize the rules-based trading system, we should find a common position with democratically constituted countries," Lange added.
Drumm said Europe faces a choice. "Will it strengthen its position as the center of free trade in a world where globalization is relaxing?" he asked. "Or will it be just a battleground where the increasing competition between China and the United States plays out?"
T.D.