"Europe Must Relearn the Language of Power" - Elcano Royal Institute

With the advent of a global system centered on spheres of influence, where the United States, Russia, and China compete, the open and rules-based international order favored by Europe is collapsing. Because of this, there is a growing argument that Europe must also weaponize the global value chains on which the United States and China depend on Europe.

The critical chokepoints where more than 80% of imports rely on European products number 41 for China and 67 for the United States. These include pharmaceutical ingredients, insulin and other hormones, medical technology, extreme ultraviolet (EUV) lithography equipment, and specialized industrial machinery used in agriculture, paper, metal processing, textiles, and advanced manufacturing.

However, unlike the United States, Europe must convert bilateral dependencies into a broader and more effective system of deterrence by consolidating leverage with like-minded partners. This kind of consolidated geopolitical and economic leverage should become the core axis of a new European strategy.

Ignacio Alvarez, Professor of Applied Economics at the Autonomous University of Madrid and former Secretary of State for Social Rights in the Spanish government from 2020 to 2023, stated this in an article titled "Relearning the Language of Power: How the EU Can Turn Trade into Geoeconomic Deterrence," published on the website of the Elcano Royal Institute, a Spanish international relations and strategic studies think tank.

Much of the statistical data and analysis in this article cites the recent report "Relearning the Language of Power," published by the high-level expert group "Geostrategic Europe Taskforce," composed of representatives from 10 EU member states.

The following is a summary of the main points.

The report "Relearning the Language of Power" is considered a significant step forward in recent discussions about how the European continent can redesign its own destiny amid Europe's current geopolitical situation and the global economy. The key proposal is that the European Union should move away from its current defensive approach to containment and actively build the foundations of a new power strategy based on the negotiating strength granted by international trade.

The European power model is outdated and eroded. Europe's traditional soft power model was built on two pillars: the size of the internal market and the EU's normative power. In areas such as digital governance, consumer protection, and environmental regulation, European norms shaped behavior even beyond Europe. At the same time, the World Trade Organization (WTO)-based order provided a stable legal environment in which commercial interdependence generally benefited Europe as a large open economy.

However, the nature of interdependence between countries has changed dramatically. Trade, supply chains, and regulatory asymmetries are no longer treated as neutral arenas by major powers. They are now seen as tools of systemic geopolitical competition. What matters most today is not influence derived from markets or soft power, but the ability to use hard power and interdependence as instruments of geopolitical strategy. Tools such as export controls, financial sanctions, supply chain restrictions, and migration pressure have become central elements of statecraft, blurring the boundaries between economic policy and security strategy and redefining interdependence itself as a field of power competition. In this context, Europe's traditional approach—relying on law, procedures, and market attractiveness—is no longer sufficient.

Europe must relearn the keys to power. Contrary to some opinions, Europe cannot be seen as a mere victim in this new environment. The EU already possesses considerable, albeit underutilized, geoeconomic influence. To relearn the language of power, it must change its current approach.

In fact, the EU has chokepoints in global value chains that can be weaponized—strategic leverage points similar to those China has used in recent years. There are numerous product categories where China or the United States is overwhelmingly dependent on imports from the EU. According to the report "Relearning the Language of Power," there are 41 such critical chokepoints for China and 67 for the United States, where European imports account for more than 80% of total supply. Included are pharmaceutical ingredients, insulin and other hormones, medical technology, EUV lithography equipment, and specialized industrial machinery for agriculture, paper, metal processing, textiles, and advanced manufacturing.

Geoeconomic leverage can be amplified by building alliances. While Europe must relearn the language of power, its approach should be very different from the American strategy. Europe should build power by forming broad alliances with other countries. As proposed by Canadian Prime Minister Mark Carney in his Davos speech, the EU can multiply its influence by consolidating leverage with like-minded middle powers.

The correct response to a world moving toward spheres of influence is not European isolation, but building alliances based on shared interests, enforceable commitments, and collective deterrence. The model presented here is clearly "post-WTO." It is not about rejecting rules and cooperation, but about reconstructing them on a new foundation through club-like arrangements among countries willing to coordinate market access, export controls, anti-coercion measures, and the development of new markets and low-carbon industries. In this respect, the objective is not simply to strengthen Europe's defensive posture. The goal is to imagine a new European power model that can uphold a new rules-based order of cooperation among countries that value collaboration, even when it cannot be sustained without leverage.

For this new European power model to function, strong institutional coherence within the EU is also required. The EU already has many relevant tools: trade defense instruments, anti-coercion mechanisms, critical raw material partnerships, foreign direct investment screening, export control capabilities, and regulatory power. However, these are often managed in a fragmented manner. Foreign policy, trade policy, climate policy, and industrial strategy are frequently pursued in parallel rather than under a single geopolitical design. Therefore, not only are new alliances abroad necessary, but also a more integrated strategic culture within Europe. This should occur among member states, between member states and the European Commission, and among directorates within the Commission itself. Only then can the EU transform its scattered capabilities into a position of recognizable power.

The new European strategy is deterrence through collective power. The current EU strategy in response to pressure from the Trump Administration is misguided. President Trump systematically used tariffs, NATO, and even uncertainty about military threats as negotiating tools, leveraging the asymmetry of bilateral relationships in which the United States had more leverage. In the face of high stakes and doubts about America's commitments, European leaders mostly chose to minimize damage, making concessions on trade, defense spending, and energy dependence to avoid retaliation, even when the United States withdrew from major international agreements. However, as seen in the Greenland case, a more resolute position, credible countermeasures, and alternative strategies based on clearer principles could have produced better outcomes.

Deterrence through collective power means exercising leverage in coordination with other countries, not alone. If the EU can join hands with countries that control similar strategic chokepoints and share concerns about pressure from both the United States and China, its geoeconomic deterrence capabilities will be significantly strengthened.

Currently, many middle powers want this type of alliance, and the EU finds itself at a unique moment—amid U.S. retrenchment and global uncertainty—to lead such a coalition and help shape a new rules-based international order. An alternative international order created by a Europe-led coalition of committed partners can prioritize a more controlled form of globalization while remaining rooted in legal norms and institutional cooperation. This approach will rely on close coordination between Europe and friendly nations, including Canada, Japan, and key countries in the Global South. In this context, Europe can take the lead in a more stable and predictable order in a world no longer dominated by U.S. hegemony.

Achieving greater strategic autonomy will not be easy, because leverage does not function automatically. Democratic governments may hesitate to impose export controls or sanctions if their own companies fear loss of sales, retaliation, or increased costs. Within the EU, some measures—like the enforcement of sanctions—require unanimity, while others—such as trade policy—can be decided by qualified majority voting. Furthermore, alliance partners may worry about burden-sharing and whether other countries will actually act in times of crisis. Therefore, pre-agreed rules, credible commitments, and even stabilization mechanisms or compensation funds to absorb temporary economic losses when anti-coercion measures are triggered are necessary. The new order cannot be sustained by rhetoric alone; institutional arrangements are needed to guarantee the credibility of alliance solidarity.

In this regard, it must be recognized that it is not the EU itself but individual member states that control the critical chokepoints of global value chains. The recent case of Dutch company ASML demonstrates how much leverage Europe can exert by weaponizing chokepoints and using technology as a tool of geopolitical power. However, it also shows that the actual restriction of exports of advanced lithography equipment to China was carried out unilaterally by a single country under strong U.S. pressure. This highlights the need to effectively coordinate the responses of EU member states, promote alignment among a critical mass of countries, and develop pre-established rules and institutional frameworks that enable consistent alliances with non-EU partners.

Fortunately, this work does not start from scratch. There is already a foundation of rules and institutions to build on. A particularly interesting example is the EU's Anti-Coercion Instrument (ACI), adopted in December 2023. This mechanism allows the EU to respond in a coordinated manner when a third country attempts to apply economic pressure on a member state or on the EU itself through trade restrictions, boycotts, or regulatory measures. The logic is clearly deterrence: the EU first seeks dialogue, but if coercion persists, it can take proportional countermeasures such as tariffs, restricting access to the European market, controlling investments, or limiting participation in public procurement. The key is not simply to retaliate, but to raise the cost of coercion, thereby deterring such attempts in the first place. The EU has not yet officially used this instrument for direct economic retaliation. One potential limitation is in the governance structure: the design intentionally balances speed and political control, requiring both initiation by the Commission and approval by a qualified majority of the EU Council. While this blocks individual vetoes, the need for broad political support may set the threshold for activation too high, making real use difficult. Therefore, easing this threshold may be necessary.

In international trade, the principle of non-discrimination has traditionally been considered inherently stabilizing. However, in a world of growing coercion, treating all actors the same is not neutral; it can reward defectors, ignore asymmetries, and expose rule-abiding countries to exploitation. Therefore, Europe needs a more conditional external economic policy that distinguishes between partners and defectors. Of course, this distinction is never easy. Market access, finance, procurement, standards, and trade privileges must be linked to compliance with common rules. This partner–defector distinction is not meant as protectionism per se, but as a stabilizing principle in a club-like order that maintains cohesion within the alliance and makes cooperation more trustworthy. Benefits should be concentrated among members willing to abide by common rules, which may be agreed upon initially by a "coalition of the willing." Conversely, defectors or actors weaponizing interdependence should face tariffs, export restrictions, or other disadvantages.

In conclusion, the internal European debate about power must be reframed. The answer is not a classical European sphere of influence. It is an alliance strategy among middle and regional powers, and an approach that sees deterrence as a means to create an alternative international order committed to legal norms, institutional cooperation, and a controlled form of globalization. The goal is not to simply join the great-power competition that seeks to operate without rules, but to build enough deterrence to update and reform the rules-based international order. Another objective is not to exclude the United States and China from this international coalition, but to progressively incorporate them through the collective deterrence of middle and regional powers.

Europe must remain committed to rules. However, rules without enforceable outcomes are no longer sufficient. Europe should value openness, but openness must now be conditional on reciprocity and strategic balance. Europe still needs partners, but the form of cooperation can no longer be the loose and fragmented partnership model of the past decade. It should be a more political, more selective, and more integrated alliance model that treats trade, climate, technology, and security as interlinked domains of statecraft.

This content was produced with the assistance of AI translation services.