'America plus one' still a challenge

Long-term allies in North America and Europe are resetting their engagement with China as US economic and strategic interests become erratic under Donald Trump. Overtures to China by Canada and France must, however, be seen in the context of their geographic, trade and security relations with the US that cannot be undone. The EU and Canada run up trade surpluses with the US, their largest trading partner, and diverting some of that to China, with which both run up deficits, will be tricky. China offers a large market for Canada's agriculture exports but then threatens its manufacturing. It is also easier for Canada to export energy to the US than to China. And Canada does not have the means to erect a security shield to rival what the US has done for it. The situation for the EU vis-a-vis China is different in degree.

The cosying up to Beijing, thus, involves allowing recent suspicions over US intentions to override longer distrust of Chinese motives. Hence the calls for Beijing to demonstrate its good faith by stepping up investments in sectors like EVs. Here, too, the effort is to make some gains from an inevitable surrender of their automobile markets to China. Earlier attempts to resist the onslaught through tariffs are making way for more pragmatic policy that addresses the EU's concerns over energy security. The US is shaking the EU's faith in RE by holding out the promise of more fossil fuels, but that comes with bigger commitments to security and trade-balancing initiatives.

China's emergence as an alternative pole for globalisation is challenged by geography. It is on the wrong side of the world to provide meaningful strategic engagement to the Northern Hemisphere. Besides, it does not yet have demonstrable technological superiority. Without a strategic shield, the gains from closer economic engagement are capped - provided, of course, trading partners can steer the terms of trade in their favour. Even now, the prospect of the US strengthening its influence over traditional allies is brighter than any potential advances by China.