Political uncertainty has become the new normal on both sides of the Atlantic as Europe and the United States recalibrate their relationship. Emotional reactions may dominate the moment, but both sides would do well to remember the bigger picture: the strategic partnership between the European Union and the United States has served both economies and their security interests well for more than eighty years. It can continue to do so — provided policymakers focus on long-term opportunities.
Much is at stake, especially when it comes to winning the global technology race.
Washington and Brussels are indeed engaged in a competition to shape a new global order in the midst of rapid technological advances that are reshaping global power balances. But this competition is with China — not with each other. And it is accelerating.
Beijing is not merely competing for global technological leadership. In several critical layers of the value chain, it is already pulling ahead — from energy infrastructure to open-source AI to humanoid robotics. Through successive party congresses, the Chinese Communist Party has laid out an ambitious set of technological strategies designed to strengthen domestic innovation and displace Western technological dominance.
Nothing comparable exists on the transatlantic side. It is time to build it.
Instead of reinforcing the alliance that has underpinned Western prosperity, some European leaders appear to be drifting toward Beijing.
German Chancellor Friedrich Merz’s recent visit to China is only the latest in a series of diplomatic engagements that also included the King of Spain, the Prime Minister of the United Kingdom, and the President of France over the past four months. These moves are often presented as pragmatic “balancing” in response to US tariff threats. In reality, they do nothing of the sort.
By distancing themselves from the United States, European governments risk playing directly into Beijing’s hands.
Every crack in the transatlantic partnership creates space for China to impose its own technological standards, deepen supply-chain dependencies, and promote digital infrastructures aligned with surveillance-friendly governance models among willing partners. Calls to “de-risk” from Washington risk recreating precisely the kind of technological dependence on China that European policymakers had pledged to reduce.
The scale of economic integration between the United States and Europe remains striking — and often underestimated.
In 2024, goods worth roughly $1.5 trillion crossed the Atlantic, 44% more than total US trade with China. The United States recorded a $88.6 billion surplus in services with Europe, highlighting the extent to which American companies rely on the continent’s 450 million consumers.
At the same time, US technology firms continue to invest heavily in Europe. In 2024 alone, American companies invested $113 billion in the European information sector and nearly $30 billion in hardware manufacturing. Google alone has committed billions in investment in Poland, contributing to an estimated 8% increase in the country’s GDP.
This is not a relationship to dismantle. It is a relationship to deepen.
Europe’s technological deficit is real. Of the 47 proposals included in Mario Draghi’s report aimed at strengthening Europe’s competitiveness in digital and advanced technologies, only 4% have been fully implemented. The continent’s regulatory instinct — however well-intentioned — has often stifled the very start-ups and scale-ups Europe most needs.
Yet the picture is more nuanced than critics of Brussels often suggest.
The European Union does not represent the entirety of Europe’s technological potential. Countries in Central and Eastern Europe — frequently underrepresented in EU institutional leadership — are delivering outsized results.
Estonia, for example, hosts ten unicorn companies and generates start-ups at a rate roughly ten times higher per capita than the European average. European national technology champions such as Germany’s SAP and the Netherlands’ ASML remain global leaders, while a number of lesser-known firms dominate critical layers of the artificial intelligence infrastructure stack.
The ingredients for a transatlantic technological surge already exist. What is missing is the strategic framework needed to mobilize them.
Europe, to its credit, has begun to adapt. Both the European Commission and the European Parliament are increasingly emphasizing regulatory simplification, while a growing recognition has emerged that compliance frameworks must support — rather than hinder — innovation.
But adaptation must accelerate.
President Donald Trump has placed the preservation of US global technological leadership at the center of his second-term foreign policy agenda. Initiatives such as the AI Action Plan, the American AI Exports Program, and the Pax Silica initiative are designed to strengthen the US technological stack while securing supply chains.
Similarly, the 2026 Critical Minerals Ministerial brought together 54 countries and launched the Forum on Resource Geostrategic Engagement (FORGE) — a recognition that the only viable path to breaking China’s geoeconomic chokehold on critical minerals is through cooperation with allies and partners.
This is the right approach.
But as the 2025 US National Security Strategy acknowledges, the United States needs a strong Europe in order to compete effectively against its strategic rivals. A technologically lagging Europe becomes a weaker trading partner, a less capable ally, and ultimately a strategic liability.
Conversely, a prosperous and innovative Europe amplifies America’s advantage.
The path forward is clear — even if the politics remain complicated.
Washington and Brussels should move urgently to establish a joint framework on technology and trade — a democratic alternative to Beijing’s industrial strategy. That means aligning on AI governance, coordinating export controls, co-investing in critical mineral and semiconductor supply chains, and ensuring that the transatlantic technology stack remains the global benchmark for nations building their digital future.
Neither side can win this race alone.
Together, the US-Europe partnership represents the world’s largest integrated economy, the deepest capital markets, and the most advanced research ecosystems. Separately, both become vulnerable to a China that is moving rapidly, investing massively, and offering its technological ecosystem to any country willing to adopt it.
The real competition is not tariffs across the Atlantic.
It is technology across the Pacific.
And that is why it is time to think long term — and act now.
