Securing the digital and green transition
Supply chain resilience was the buzzword of this TTC. Following pandemic-induced disruptions and shortages, semiconductors have been a focus of the forum’s work. But the urgency to realize the twin digital and green transition, coupled with past policy mistakes, is also creating new dependencies on China in other areas which both sides need to contend with.
In their joint statement, the EU and the US affirmed their intention to diversify supply chains for rare earth magnets — essential products for meeting decarbonization targets — and solar supply chains. For the former, all stages of production are heavily concentrated in China. The country is also the leading exporter of solar photovoltaic (PV) products, an industry tied to Uyghur forced labor. The statement stresses the commitment to “eradicate forced labor” and reduce reliance on “unreliable sources of strategic supply”.
China’s centrality in Information and Communication Technology (ICT) supply chains was also in focus. One of the most concrete outcomes of the TTC has been the creation of a taskforce on joint public financing for secure digital infrastructure in third countries to provide alternatives to “high-risk vendors” — a nod to China’s Digital Silk Road. This would be the connective tissue between the EU’s Global Gateway and US efforts in this area, but the two are far from identifying joint projects to pursue.
Competing with China on future technologies
Transatlantic competitiveness in future technologies is a related priority in which China is forging ahead, particularly 6G and Artificial Intelligence (AI). In addition to cooperating on research and development and technology governance, the EU and the US have established a Strategic Standardization Information mechanism to “promote and defend our common interests in international standards activities”. This is largely aimed at China’s strategic approach to technical standardization and will initially focus on electric vehicle chargers.
Much of the TTC’s work is devoted to technology protection through coordination on investment screening and export controls, where more work is needed to tackle China’s state-led strategy to appropriate foreign technology, particularly in dual-use fields. Through the TTC, there is now “a structured and systematic forum for the US and the EU for further work on export restrictions and sanctions” which would have been unthinkable a year ago.
In sum, China will have to contend with a transatlantic trade and tech forum whose work agenda has become clearer and more ambitious since its inception, when many feared that the TTC would turn into a talking shop or get bogged down with frictions on trade and digital governance. Policy priorities have now been set. The next meeting, scheduled before year-end, will tell whether concrete action will follow.