EU economic security plan faces major challenges

Significance

These stem from the continued autonomy of private-sector firms and the transnational systems they operates through. The EU may exert some influence through targeted policy instruments, but thus far it is failing to shift attitudes significantly when it comes to business with 'risky' countries such as China.

Impacts

• The European Commission will struggle to implement some security targets, such as in relation to outbound investment screening.
• Germany’s dependence on China will limit the EU’s capacity to accelerate ‘de-risking’ from China.
• US pressure on EU states to take a clearer stance on US-China rivalry will likely increase if Donald Trump is re-elected US president.
• Chinese retaliation could be the key factor which forces major European firms to reconsider ties with China.