With the Israel-Iran war on the brink of spilling over into a catastrophic regional conflict, one might have expected Ursula von der Leyen to call for diplomacy and restraint during the G7 meeting in Canada this week.
Instead, the European Commission president urged her fellow Western leaders to “act together” in preparation for this century’s decisive economic clash – against China.
In two excoriating speeches, von der Leyen slammed Beijing’s attempts to “dominate” and “blackmail” Europe and America through its export restrictions on rare earths, which are used to produce a range of everyday and advanced technologies including smartphones, electric vehicles, and missile guidance systems.
Indeed, von der Leyen’s rage was so palpable that large parts of the speeches weren’t even grammatical.
“China has largely shown that it unwillingness (sic) to live within the constraints of the rules based international system,” she said. “While other (sic) opened their market China focused undercutting (sic) intellectual property protections, massive subsidies (sic) with the aim to dominate global manufacturing and supply chains.”
Von der Leyen, of course, is a known China hawk who has long condemned Beijing’s close ties to Moscow, control over the world’s critical mineral supply, and economic protectionism.
Nevertheless, the sheer ferocity of the remarks – especially at a time of such fraught geopolitical tensions – was genuinely shocking. Whence the anger?
Beijing’s export controls, it seems, are only part of the explanation. Introduced in retaliation against US President Donald Trump’s “reciprocal tariffs” in early April, the measures were primarily intended to weaken the American economy – and remind the self-proclaimed “Tariff Man” that Washington cannot prevail in a trade war against Beijing.
The policies, however, also inflicted severe damage on the European economy, which is already reeling from the twin impact of slowing demand and growing competition from Chinese exporters. Multiple EU industries – including Germany’s long-suffering automakers – warned that they might have to suspend production if the supply of rare earths isn’t restored.
It’s certainly possible that China didn’t mean for its export restrictions to hurt Europe. Indeed, given that one of Beijing’s overarching strategic ambitions is to drive a wedge between the EU and the US, it would be surprising if it did.
Whatever its intentions, the fact remains that Beijing’s policies seriously harmed Europe. Moreover, they increased suspicions of China among already deeply suspicious EU officials, including von der Leyen herself, who are still traumatised by the bloc’s economic over-reliance on Russia prior to the full-scale invasion of Ukraine in 2022.
In other words, if the secondary effects of Beijing’s export controls weren’t intentional, they were enormously reckless – and constituted a major act of strategic self-sabotage.
Ominous signs
Ongoing EU-US trade tensions were almost certainly another major cause of von der Leyen’s pugnacious remarks.
Given that Trump’s administration is replete with China hawks, it would be natural for von der Leyen to assume that condemning Beijing might be the best way to avoid Trump’s sweeping tariffs on EU goods, which could rise to 50% in early July.
Moreover, and despite the recent easing of frictions between the US and China, a full-scale decoupling between the world’s two largest economies remains a genuine possibility. Were this to happen, the EU’s overwhelming security dependence on the US would likely force Brussels to side with Washington over Beijing.
Unfortunately, signs of the deteriorating state of EU-China relations go well beyond von der Leyen’s remarks at the G7.
