Red Light, Green Light: Assessing the European Union’s “Tripartite” China Strategy in 2025

The European Union-China summit on July 24^th, marking fifty years of diplomatic relations, could hardly be considered a happy anniversary. Aside from a limited joint statement on climate change, the two were unable to make headway on structural issues ailing the bilateral relationship, particularly concerning China’s support for Russia’s war machine and the European Union’s seismic trade deficit. Still, European Commission president Ursula von der Leyen called the summit an “inflection point.”  

While the summit’s tangible outcomes were modest, von der Leyen’s statement is more than a platitude: the summit indicates a real shift in Brussels’ mindset. In the face of a harder line posture coming from Washington and continued overcapacity from China, the European Union is increasingly contending with hard truths about its economic and geopolitical position. The summit should spur the development of a decisive, pragmatic strategy in which Europe prioritizes economic security when dealing with its Eastern neighbor. 

The EU’s Existing “Tripartite” Strategy 

Recognizing this moment as an inflection point in the bilateral relationship requires an understanding of the European Union’s stated policy vis-a-vis China. In 2019, the European Union drastically revised its China policy with a new strategic outlook. After nearly two decades of open, largely amicable trade relations with Beijing, the publication characterized China as three distinct, but not mutually exclusive, things: a “cooperation partner... an economic competitor... and a systemic rival promoting alternative models of governance.” This “tripartite” strategy became the guiding principle behind the European Union’s interactions with China. 

If executed properly, Europe could reap the benefits of a pragmatic economic partnership while minimizing national security concerns and combatting China’s attempts to alter the international order.  

In practice, this approach has had mixed results. The trade deficit has ballooned from €164 billion in 2019 to over €300 billion in 2024, and Chinese exports have continued to flood the European single market in key sectors such as clean energy and electric vehicles backed by generous state subsidies. Beijing’s “partnership” on trade has proven self-serving. When competing, China has outperformed the European Union both within Europe and in third markets. Perhaps most importantly, China showed its true geopolitical allegiance by supporting Russia after the Kremlin launched its full-scale invasion of Ukraine in February 2022. Despite claiming otherwise, China has consistently aided the Russian war machine through dual-use exports and the purchase of Russian oil, actively fueling an existential threat to Europe.  

Before this year’s summit, Chinese ambassador to the European Union Cai Run described the tripartite strategy as “a traffic light going green, amber and red lights all at once.” This characterization, biased or not, is remarkably apt. As China grows increasingly assertive in pursuit of its own interests, Europe has been woefully indecisive. European leaders cry foul about China’s adversarial activity and call on Xi to back away from Putin but the bloc simultaneously deepens its dependence on Beijing in critical areas and wavers on sanctions-based threats. Differing interests among EU member states make tripartite priorities unclear. With all three lights on at once, Europe has been stuck in a traffic jam while China accelerates toward its geopolitical goals. 

The Summit as an Intersection 

Earlier this year, it seemed possible that Europe might lean into its partnership with Beijing. However, the veil of ignorance was shattered when Europe was caught in the trade war between the United States and China and saw its access to rare earth minerals restricted. The “alarming situation” was an unwelcome reminder that the European Union needs to move faster to shore up its security of supply. Still, the European stance at the summit may have been less combative had China chosen to address European concerns in good faith. Instead, Beijing offered no major concessions nor rhetorical olive branches to demonstrate where interests with Brussels could potentially align. As trade talks with the United States loomed, Beijing saw Europe as weak and, rather than offer a carrot, brought a stick. To Europeans, this confirmed that China had no appetite to compromise and could not be trusted as a hedge to a mercurial United States.  

While Europe’s policy victories remain scant, it is notable that the summit did not result in Brussels offering any major concessions. Von der Leyen made no adjustments on Chinese access to European markets or sanctions on Chinese banks connected to the war in Ukraine. The European Union was even able to secure marginal improvements in its access to rare earth metal licensing, a success on a high-stakes topic for commercial and national security interests. This is particularly notable given the relatively unfavorable terms that the bloc agreed to in its trade deal with the United States. Even with transatlantic relations in turmoil, Brussels did not blink or open itself further to China in the name of short-term economic stabilization.  

With both the U.S. and China leveraging Europe’s dependences against them, European Union leadership is beginning to adapt to a “new reality” of realpolitik characterized by transactional relationships among major powers. The summit cemented in words a gradual hawkish policy shift where Europe appears to be approaching China, and the world at large, more pragmatically—recognizing that in a reshuffling economic world order, the only actor that can be relied upon to consistently look out for Europe is Europe itself.  

In this way, the European Union has wisely settled on following a “yellow light” in its long-term strategic approach to Beijing—proceed with caution. 

The “Yellow Light” as Policy 

While reliance on the two superpowers will not wane quickly, the European Union is showing signs of lurching towards self-sufficiency without completely jeopardizing critical ties. The trade deal with the United States was costly for the bloc, but Brussels was able to secure a “metals alliance” with Washington that will add heft to European efforts to block Chinese steel dumping. The United States’ new “Turnberry order” approach to international economics includes the European Union as a partner. Simultaneously, the China summit yielded a small strategic victory in the form of an agreement on climate that directs the EU to speed up its clean tech transition. By coordinating with Beijing on clean energy, Brussels can capitalize on America’s shift away from the economic engines of the future and thus become more competitive.  

More importantly, Brussels is also looking for new partners. Just a day before heading to Beijing, von der Leyen inked a “competitiveness alliance” with Japan that will synergize trade and coordinate development of rare earth element production. The European Union is seeking to deepen ties with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, a prospect that would include 30 percent of world trade. Brussels recently struck trade deals with MERCOSUR, Mexico, and Indonesia, and is negotiating with India, the United Arab Emirates, and the Philippines, among others. While this trade diversification strategy is still being developed and will not reduce dependencies on China or the United States in the short term, it could make the European Union less vulnerable to economic coercion in the long term.  

The tripartite strategy has also been followed by several positive European Union initiatives that will bolster the bloc’s future economic security––including the Chips Act, Foreign Subsidy Regulation (FSR), International Procurement Instrument (IPI), Anti-Coercion Instrument, and Critical Raw Materials Act. Formed under the banner of “de-risking,” these tools give Brussels legal standing to secure the European common market. Member states, too, are investing in military-adjacent technologies, including AI infrastructure such as data centers, which will contribute to both the continent’s military and economic security. 

Europe’s Road Ahead 

To make the Europe Union’s new approach to China an enduring success, Brussels must continue to press forward in its drive for economic security. This begins at home by assisting member states in key economic sectors. The launch of the InvestAI initiative, which will mobilize €200 billion of investment in artificial intelligence, highlights that Brussels is committed to developing the future drivers of security and economic growth—it must not be bashful in future spending. Abroad, it should continue to cultivate new partnerships with other nations that are tired of American and Chinese trade manipulation.  

The “yellow light” will only reduce metaphorical traffic if member states refuse to opportunistically cooperate with China in a manner that suits their narrow economic interests but undermines economic security for the European Union as a whole. Otherwise, de-risking will continue to be more bark than bite: too often, the bloc has been fractured and bureaucratic when major opportunities to tighten the screws arise. For example, only eleven member states used their legal powers to restrict high-risk telecom suppliers like Huawei as of late 2024.  

The European Commission has developed powerful tools to screen foreign investment and block anticompetitive deals independent of member states. It should use these tools—particularly the Foreign Subsidy Regulation (FSR)—more aggressively to protect markets from economic manipulation. As the sole enforcer of the FSR, the Commission can force countries to reject business mergers and acquisitions that are distorted by foreign financing. Additionally, the new screening rules for foreign investment allow the Commission to “intervene on its own initiative” to resolve member state disputes or to address security concerns. Brussels has consolidated its power in writing and now needs to make these changes tangible.  

This will entail ruffling some feathers with member states that have developed cozy economic relationships with Beijing, most notably Hungary. While these countries will likely continue to engage with China regardless, more assertive usage of Commission powers is a necessary step to show member states and foreign powers that it will not let itself get pushed around. As the tool’s usage rate continues to increase, member states will be incentivized to align themselves with the regulation, gradually pushing the bloc towards independence.  

Europe's future as an international superpower depends on its ability to act with unity and resolve—it cannot afford to idle. Settling on the yellow light allows Europe to finally move forward, cautiously but decisively, and avoid paralysis at the intersection. Now the continent must leverage its economic heft and embrace the new normal of global power politics by adopting a security-driven course of its own.