Continental Rift: Bridging Transatlantic Differences on Economic Policy Toward China
Despite shared frustrations and interests and some tactical cooperation, Washington and Brussels lack a game plan for future transatlantic relations with China. The United States and Europe have disagreed on the Chinese security challenge, currency manipulation, and current account and trade imbalances. At the same time, the transatlantic allies share similar concerns about Chinese state capitalism, violations of intellectual property rights, a lack of reciprocity on foreign investment, and an absence of Chinese implementation of free trade principles. The impending designation of China as a market economy provides a window of opportunity to leverage a Chinese course correction.