After Scholz in China, look out for Macron in America ~ Washington

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Hopefully, considering transatlantic symbols, Emmanuel Macron’s upcoming visit to Washington DC will have a more positive aura than the recent phone call between Joe Biden and Chancellor Olaf Scholz.

The two leaders discussed Scholz’s recent much-criticized trip to China and expressed a “shared” commitment to upholding the international rules-based order. Both spoke with Xi Jinping about Taiwan, human rights and Ukraine.

But diplomatic niceties cannot hide the gulf between the US establishment’s view of China as its main competitor and Berlin’s interest in maintaining a first-class trade relationship. It’s one of several cracks in a US-EU relationship that is trying to move beyond the Trump era – with observers saying there is a risk of a collision.

Helpfully, Europe is no longer viewed by the White House as an “enemy” riding America’s security, benefiting from record exports with an undervalued euro and entrusting energy supplies to Russia. The two allies are on the same geopolitical side on the invasion of Ukraine, with Germany now poised to spend on defense and less on Russian gas.

But at the same time, the US sees that the EU is not doing enough: it is not sending enough military or financial support to Kyiv and is not cracking down on China enough, as the Scholz-Biden call implied. The EU’s view of Beijing as a partner, competitor and rival is too vague for Washington. “Europe is not there on China,” says former Obama adviser Benjamin Rhodes.

Within Europe, resentment is building over the growing economic disparity with the US. The euro area’s trade surplus is now a deficit as expensive energy imports impoverish European consumers while enriching American exporters. Purchases of durable goods (cars, washing machines) are up 24% in the US since December 2019 but are down 6.7% in France, according to strategist Nicolas Goetzmann. The new protectionist US subsidies for electric vehicles are putting salt in the wounds of EU manufacturers.

This is where Macron, who himself is at odds with Scholz on several issues, has an opportunity to urgently seize the opportunity for better transatlantic relations when he meets Biden on December 1. Macron will be both symbolically and significantly the US President’s first guest of state.

One challenge is showing the US why France and Europe should be nurtured as partners and not dismissed as irrelevant. Macron will think of the humiliating AUKUS episode in which an Australian deal to buy French submarines was scrapped in favor of an alliance with Britain and the US.

Besides pledging more support for Kyiv, France should look for more common ground with Biden on the Indo-Pacific and China. France is the only EU power with a presence in the region, says ECFR’s Camille Grand, with around 7,000 military personnel and 1.5 million citizens. Its strategy is already aimed at complementing that of the US, even as it presents itself as a “balancing power”. Macron said in September France wanted to counter the risk of regional “hegemony” by working with India and Australia.

Although France is not fully allied with the USA, it can at least position itself closer to Washington than Berlin. China is France’s No. 5 trading partner with total trade of about US$87.3 billion, but Germany’s No. 2 partner with total trade of about US$236 billion. When Macron met Xi on the sidelines at the G20 summit, that was more in line with Biden’s stance than Scholz’s. Paris has “a card to play” while European allies scramble for influence, says McLarty Associates’ Jeremie Gallon.

In return, Macron should also push for more US support for Europe’s economy, whose bleak prospects have not received sufficient recognition in the States. If Washington really wants to spread the gospel of “friend-shoring” among allies and NATO partners, it should find a compromise to de-escalate the dispute over EV subsidies.

And, echoing Obama’s pressure on Angela Merkel during the eurozone crisis, the US may also see the benefit of supporting a growth spurt in Europe through more investment and joint borrowing, something Berlin resists. France’s energy aid policy has highlighted how euro-zone inflation is being driven by war and energy rather than US overheating. More, not less, spending is required.

A visit will not be a panacea. Confidence levels between France and the US have been marred by ambiguity over the Paris push for a European or French-led defense. While Macron leads the EU’s only nuclear power and most credible military, he has also ruffled his feathers by failing to take the lead on military aid to Ukraine and brushing past barbs about NATO’s purpose. He is “not the most popular among Eastern Europeans, not even among Southern Europeans,” write Ilke Toygur and Max Bergmann of the CSIS think tank.

But the imagery and rhetoric of a Franco-American meeting in Washington DC – itself designed by a French architect – will be a good start. The Macron administration must ease the Franco-German deadlock and the pain of the energy crisis. And as former Ambassador Pierre Vimont points out, the Biden administration needs allies like Europe to advance its global agenda. It is worth a try.

More from the Bloomberg Opinion:

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After a disastrous affair with Putin, Germany takes action against Xi: Andreas Kluth

This column does not necessarily represent the opinion of the editors or of Bloomberg LP and its owners.

Lionel Laurent is a Bloomberg Opinion columnist covering digital currencies, the European Union and France. He was previously a reporter for Reuters and Forbes.

For more stories like this, visit bloomberg.com/opinion

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