Chinese and Russian economic pressure games – what policy for Sweden and Europe?

China uses economic tools to pressure Europeans, and to outcompete them on markets around the world. When Sweden wanted to make its 5G network secure by de facto excluding Huawei, China threatened economic consequences. When Germany did the same the Chinese ambassador contemplated car tariffs publicly – the German government has not fully banned Huawei. In Africa and around the world, Beijing is filling the voids European and American trade policies leave, conquering markets through trade deals and integration into Chinese value chains. Russia, too, has played with energy pressures to divide Europe – and a few months ago it threatened the Czech Republic with a ban of Czech beer. Finally, under Donald Trump, Europeans even faced sanctions and punitive tariffs from their close ally the United States. 

What does it mean for a trading country like Sweden that trade is becoming the number one geopolitical tool? How should Sweden and Europe adapt to the rise of geoeconomics, keeping their markets open but minimizing their vulnerabilities? How can we improve the EU’s trade policy to remain competitive in this age of geopolitics and trade? 

ECFR’s Task Force for Strengthening Europe Against Economic Coercion has worked with several EU governments and the private sector to think through these new challenges and what Europe could do. Basis for the discussion are ECFR’s reports and the National Board of Trade’s recent report “An EU trade policy for geopolitical ends”.  

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