China’s lack of reciprocity in market access and its mercantilist state capitalism have led to a backlash in the United States. An already weakened WTO was hardly an obstacle to impose tariffs and offer massive subsidies to stay ahead in the race for technological leadership and advance the green transition through preferential treatment for US industry. The prospect of a new Trump administration confronts the European Union with additional challenges.

Why has Europe fallen so far behind in the global competition in advanced technologies? It has expanded its toolbox to defend itself against unfair competition and adopted an economic security strategy for strengthening competitiveness and mitigating risks. But is the flouting of the rules for fair trade and competition by others the main reason for Europe’s deteriorating productivity and competitiveness rather than its own policy failure ? And would the EU actually want or be able to copy the Chinese or US recipes of massive state support or deep capital markets with huge pools of venture capital ? What would be the risks for distorting competition and the internal market ? At the start of the new Commission the EU needs to address these issues to cope with the challenges arising from policies pursued by US, China and Russia.