How are European countries affected by the US-China tech war
The US-China tech war has significant and complex effects on European countries, influencing their economic, technological, and strategic landscapes.
Economic and Industrial Impact
- The US and China are both ramping up subsidies and tax breaks to support their tech industries, creating a global imbalance that threatens European competitiveness. Without a strong and flexible response, the EU risks falling behind in key sectors like semiconductors, artificial intelligence, and digital infrastructure.
- European companies have suffered collateral damage from tariffs and tech restrictions, particularly in sectors like automotive and electronics. For example, Germany’s export-driven industries have faced disruptions due to increased tariffs and supply chain uncertainties.
Strategic Dilemmas and Tech Sovereignty
- Europe finds itself as a “battleground” in the US-China tech war, pressured by both sides to align with their respective technological standards and security policies. The EU is highly dependent on US technology and security guarantees, yet many member states maintain strong economic ties with China, making full decoupling from either side challenging.
- The tech war has sparked debate within the EU about the need for greater technological sovereignty. Initiatives like building a “EuroStack” (European digital infrastructure) and the Digital Network Act aim to reduce reliance on US and Chinese technologies, but over 80% of Europe’s digital infrastructure is still imported, and most foundational AI models are developed in the US.
Regulatory and Political Challenges
- The EU’s push for tech sovereignty and stricter digital regulations has drawn criticism from US tech companies, who argue that these measures are protectionist and harm US business interests. In response, there are calls in the US to impose retaliatory trade measures against European firms.
- European countries are divided in their approach to Chinese tech companies like Huawei. While the UK has imposed a full ban, other countries such as Germany and Cyprus have sought compromises, balancing security concerns with market access and cost considerations.
Opportunities Amidst Risks
- Despite the risks, the tech war also presents opportunities for Europe to strengthen its own innovation ecosystem. By investing in digital infrastructure and fostering cooperation among member states, the EU could enhance its global standing in emerging technologies.
- The EU’s response to the US-China rivalry will shape its future role in the global tech landscape. Strategic autonomy, innovation, and regulatory leadership are key to ensuring Europe remains competitive and resilient.
Summary Table: Key Effects on Europe
| Area | Impact of US-China Tech War |
|---|---|
| Competitiveness | Risk of falling behind due to massive US/China subsidies |
| Supply Chains | Disruption from tariffs and tech restrictions |
| Tech Sovereignty | Push for “EuroStack” and digital autonomy |
| Regulatory Policy | Tensions with US over digital regulation |
| Security | Divided stance on Chinese tech (e.g., Huawei) |
| Opportunities | Chance to boost innovation and digital infrastructure |
In summary, the US-China tech war puts Europe in a difficult position—caught between two superpowers, facing risks to its competitiveness and sovereignty, but also presented with a unique opportunity to invest in its own technological future.
Citations:
- https://www.realinstitutoelcano.org/en/analyses/the-us-china-technology-war-and-its-effects-on-europe/
- https://eulacfoundation.org/en/europe-and-us-china-tech-war-enhanced-competition-post-trump-era
- https://www.csis.org/analysis/analyzing-impact-us-china-trade-war-chinas-energy-transition
- https://www.unav.edu/web/global-affairs/detalle/-/blogs/china-us-trade-war-and-the-eu-risks-but-also-opportunities
- https://www.intereconomics.eu/contents/year/2025/number/2/article/mission-impossible-the-eu-s-search-for-an-independent-tech-policy-amid-us-china-decoupling.html
- https://www.wita.org/atp-research/us-china-tech-war-effects-europe/
- https://www.atlantis-press.com/article/125956685.pdf
- https://www.swp-berlin.org/publikation/the-us-china-tech-war-where-does-turkey-stand
