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Abstract This paper examines whether the European Union (EU) can supplant the United States (US) as a benign hegemon in the contemporary international system. It discusses the concept of a benign hegemon, traditionally associated with the US, characterized by military and economic dominance exercised with liberal values, multilateralism, and the promotion of global security and prosperity.  The analysis highlights the limitations of US hegemony, including military overextension, economic challenges, and a decline in soft power, particularly in regions such as the Middle East. Conversely, the EU's global ambitions are examined, with a focus on its peace efforts, trade agreements, development aid, and multilateral engagement. However, the EU's internal divisions, lack of unified foreign and defense policy, and historical perceptions of coercion limit its ability to act as a benign hegemon. The analysis concludes with a proposition that the EU's unique nature and current constraints suggest it cannot fully assume the US's role, raising questions about the viability of benign hegemony in today's context. Key Words: SAFE, EU, US, Benign Hegemon, Geopolitics Introduction In the recent two pieces, we looked at Security Action for Europe (SAFE) and its potential consequences regarding the role and nature of the EU as a military power {link}, and Ukraine's integration into European defence cooperation, highlighting its unique status as a semi-integrated security partner (SISP) despite not being an EU member. {link}, This article will examine the transatlantic relations and specifically address the question of whether the EU could replace the US as a benign hegemon. According to popular sources, a "benign hegemon" refers to a dominant power that exercises its influence in a manner that is generally considered beneficial. This notion is contemporary and is almost always used referring to the United States (US). Accordingly, the US has used its influence to provide global security and stability without being overly aggressive or coercive. The concept is rooted in hegemonic stability theory, which posits that a single dominant state is necessary to maintain the stability of the international system.[i] Scholars define a benign hegemon as one that provides the necessary power to uphold the international order. This involves advancing its interests while promoting global security and prosperity through multilateral treaties and international organizations, safeguarding national sovereignty via alliance networks and the UN Security Council, and fostering unrestricted market capitalism through trade deals and bodies such as the World Trade Organization and the International Monetary Fund.[ii] Moreover, a benign hegemon is typically defined as a hegemonic power that, in addition to possessing overwhelming military and economic power, utilises its influence to promote more liberal principles within the international system. This includes pursuing liberal international values such as economic development, liberal and democratic political structures, and fostering a community of civilised states that resort to war only as a last resort and never against each other. The United States, as the hegemonic power after the Cold War, is often described as benign because its influence is broadly progressive, aiming to create a liberal world order based on free markets, free speech, free elections, and the exercise of free will unencumbered by the state. While the US maintains traditional geopolitical objectives, it also attempts to refashion the operational ground rules of the international system itself, promoting free trade, human rights, democratisation, and a global cultural infrastructure based on US technological companies. This combination of overwhelming power and a liberal agenda is what characterises a benign hegemon.[iii] Furthermore, experts often cite the US's "liberal grand strategy" as constructing a relatively benign and highly institutionalised multilateral system based on open markets, free trade, and the provision of public goods, such as collective security and an open international trading regime.[iv] This system is viewed as enabling other countries to prosper economically in a secure environment, with examples such as the rebuilding and subsequent success of Japan and Germany. However, the concept of benign hegemon is contested, with some arguing that the US lacks the resources to be a genuine global hegemon, as noted by John Mearsheimer and Joseph Nye, who suggest it cannot achieve all security, political, and economic goals alone. This argument highlights the complexity of assessing whether the US's actions are truly benign, especially given its military and financial reach.[v] Historical Context The US's role as a potential benign hegemon has been prominent since the end of World War II, particularly after the fall of the Berlin Wall in 1989, when it occupied a hegemonic position within world politics Historical instances include its leadership in establishing the Bretton Woods system, the International Monetary Fund, the World Bank, and security alliances like NATO, which aimed to stabilise the global economy and provide collective defense. The US also played a key role in democratising post-war Europe and Japan, furthering its image as a stabilising force. On the positive side, the US led through consent, with high global approval ratings and multilateral actions, such as Bush Sr.'s Gulf War coalition and Obama's Libya UN action, which are claimed to be foundational to the liberal order since World War II. On the negative side, actions like the Iraq War, drone attacks, and government overthrows in Latin America and the Middle East are cited as evidence of coercion and imperialism, undermining the benign label. Scholars focusing on the Middle East note that despite its hegemonic role, the region has experienced significant violence and instability, with US interventions such as the 2003 Iraq War and the 2011 Libya seen as sources of disorder rather than stability. This challenges the notion of benign hegemony, suggesting unipolarity (power dominance without ideological consensus) better explains US actions in the region.[vi] US hegemony and its limitations The concept of American hegemony has been a cornerstone of international relations since the end of World War II. However, in recent decades, the limitations of American hegemony have become increasingly apparent across military, economic, and cultural domains. Given the recent developments in the Middle East (war in Gaza and incursions between Israel and Iran), it seems logical to examine the limitations of US hegemony in the context of the region. Several factors contribute to the decline in American influence in the Middle East. Firstly, the failure of political reconstruction efforts in Iraq after the US-led invasion and overthrow of Saddam Hussein shifted America's position in the region from advantageous to disadvantaged and exposed the limits of American hegemony. Secondly, war-weariness within the United States affects the ability to sustain prolonged involvement and influence in the region. Thirdly, there is a relative neglect of the Arab-Israeli peace process, which undermines American credibility and effectiveness in the region. Fourthly, the impact of US regional policies on the influence of Iran, which has grown stronger partly as an unintended consequence of the Iraq war. Next, the emergence of a new regional power struggle between an Iranian-led bloc of mainly Shia actors and a Sunni bloc led by Arab states such as Saudi Arabia and Egypt. The rise of Islamist militias and political groups like Muqtada al-Sadr's supporters in Iraq, Hezbollah in Lebanon, and Hamas in the Palestinian territories, which were advantaged by early elections promoted by the US before adequate security and political institutions were in place. Next, the Bush administration's distancing from the Israeli-Palestinian peace process contributed to the rise of Hamas and further undermined moderate Palestinian leadership. Lastly, the diminished fear of American power by adversaries such as Iran, which refused negotiations and disregarded weak UN sanctions, and the uncertainty of America's Arab allies about the reliability of the US as a partner.[vii] Generally speaking, one of the most significant limitations of American military dominance is the issue of overextension. The US has maintained a global military presence, with bases and troops stationed across the world. However, this overextension has led to military fatigue and resource depletion. The wars in Afghanistan and Iraq, for instance, have strained the US military, leading to a decline in its ability to project power effectively.[viii] The rise of other military powers, particularly China, has also challenged the United States' military dominance. China's rapid military modernisation, including advancements in technology and naval capabilities, has narrowed the gap between the two superpowers. This has raised concerns about the US's ability to maintain its military superiority in the Asia-Pacific region and beyond. [ix] Maintaining military dominance is costly, and the economic burden of sustaining a global military presence has taken a toll on the US economy. The high defence budget has led to trade imbalances and deindustrialisation, weakening the economic foundations of American hegemony.[x] The US economy has faced significant challenges, including deindustrialisation, financialisation, and rising competition from China. The shift of manufacturing activities to countries with lower labour costs has weakened the US industrial base, while the rise of China as a global economic powerhouse has challenged American economic influence.[xi] Globalisation has created a more interconnected world economy, reducing the US's ability to dictate economic policies unilaterally. The rise of emerging economies, particularly in Asia, has shifted the balance of economic power, making it difficult for the US to maintain its hegemony in global trade and finance.[xii] The dominance of the US dollar in the global financial system is facing challenges. The rise of alternative currencies and the increasing use of cryptocurrencies have threatened the dollar's hegemony. Additionally, countries like Russia and China are reducing their dependence on the dollar, further eroding its global dominance.[xiii] American cultural influence, once a cornerstone of its global hegemony, is facing resistance. The rise of non-Western cultural formations, particularly in Asia and the Middle East, has challenged the dominance of American media, entertainment, and values. This has led to a decline in the global appeal of American culture.[xiv] The US's soft power, which was once a key component of its hegemony, has declined in recent years. The country's unilateral policies, military interventions, and domestic challenges, such as racial tensions and economic inequality, have eroded its moral authority and global influence.[xv] What is the EU hoping to achieve as a global player? A thorough analysis of available up-to-date documents issued by the EU itself suggests several key areas of interest to the organisation as a key global player. First and foremost, the EU is committed to fostering peace, preventing conflicts, and strengthening international security. It supports a rules-based international order with the United Nations at its core, advocating for multilateralism and the rule of international law.[xvi] The EU has actively engaged in conflict resolution, such as promoting a two-state solution in the Israeli-Palestinian conflict and supporting ceasefires in regions like Gaza.[xvii] It also invests significantly in the defence of Ukraine to counter Russian aggression, viewing this as critical to maintaining European and global stability.[xviii] As the world's largest trading power, the EU seeks to use its economic strength to boost prosperity, enhance its trading power, and foster mutually beneficial partnerships. The EU's economic influence is a key pillar of its global power strategy, as evidenced by recent agreements. In April 2025, the EU-Central Asia summit agreed on a strategic partnership aimed at strengthening economic ties between the EU and Central Asia.[xix] A month later (May 2025), the EU and Singapore signed a landmark Digital Trade Agreement, enhancing the EU's digital trade capabilities.[xx] Overall, the EU has over 40 trade agreements with 70 countries. These agreements fall into three distinct categories: Economic Partnership Agreements (EPAs), Free Trade Agreements (FTAs), and Association Agreements (AAs). The EU also enters into non-preferential trade agreements, as part of broader deals such as Partnership and Cooperation Agreements (PCAs).[xxi] The EU provides significant development aid, which, when including the UK, is two-thirds greater than that of the US and is mainly supplied as grants rather than loans. According to the EU, this highlights its commitment to promoting human rights and sustainable development. The EU has built a dominant position in global development. It accounts for half of all aid worldwide, but the plethora of different programmes disguises its profile in this regard. [xxii] The EU aims to establish strong, well-managed partnerships with countries and regions beyond its immediate neighbourhood, particularly with middle powers (e.g., Brazil, Egypt, Indonesia, Mexico, Saudi Arabia) and pivotal regions (e.g., Africa, Central Asia, Southeast Asia). This is crucial for maintaining its influence in a multipolar world.[xxiii] In that respect, the EU is committed to reforming multilateral institutions, such as the UN, the IMF, and the World Bank, to ensure more equitable representation and effectiveness. It also aims to play a leading role in shaping the future of global forums, such as the G-20. Initiatives such as the "Golden Gateway" (€300 billion by 2027, launched in late 2021) and "Team Europe" for post-COVID investments are part of the EU's strategy to counterbalance China's Belt and Road Initiative and engage more effectively with developing countries.[xxiv] The EU focuses on addressing global challenges, including climate action, migration, and economic development. It wants to ensure that its climate policies, such as the Carbon Border Adjustment Mechanism, do not hinder the development of Southern countries and offers compensation through initiatives like the Global Gateway and climate funds.[xxv] In 2021, the EU was the top partner for 80 countries and provided 43% of global official development assistance, underscoring its commitment.[xxvi] Migration reform is another priority, with the EU aiming to facilitate legal immigration pathways, including work visas, circular migration, and resettlement schemes, to address irregular entries and support global development.[xxvii] In this respect, the Council of the European Union adopted the EU's Pact on Migration and Asylum in May 2024. According to the EU, "the asylum and migration pact will ensure a fairer and stronger migration system that makes a concrete difference on the ground. These new rules will enhance the effectiveness of the European asylum system and foster greater solidarity among member states. The European Union will also continue its close cooperation with third countries to tackle the root causes of irregular migration".[xxviii]   The EU aspires to be a more assertive player in global security, potentially reevaluating its role in NATO and taking on greater responsibility as a security guarantor, particularly in regions such as Africa. It recognises the need for a foreign policy that is both humble (acknowledging the need to do more to have an impact) and ambitious (aiming for strong partnerships to promote its interests and objectives). The EU faces challenges from disinformation campaigns by Russia and China, as well as historical resentment from centuries of European dominance. To address this, Brussels is scaling up its diplomatic engagement and communication efforts, including task forces for regions such as sub-Saharan Africa and communication hubs like the one in Beirut (Carnegie Endowment for International Peace - The EU and the Global Battle of Narratives, citing EEAS Disinformation Speech). The EU aims to repair its image and rebuild trust abroad by positioning itself as a force for reform and a reliable partner for developing nations.[xxix] The EU finds itself squeezed between the United States and China, with its interests increasingly aligned with those of the US, yet also needing to assert its independence. The US's "pivot to Asia" has given the EU more freedom on specific international issues, but it also underscores the need for the EU to strengthen its global role.[xxx] The EU must also clarify its position vis-à-vis the Global South, ensuring that its policies are perceived as supportive and beneficial to developing nations, particularly in areas such as trade, climate, and security. Can the EU ever become a benign power? The answer to this question turns out to be negative, at least as long as we adhere to the criteria used so far. Below, the reader will find a list of reasons supporting the above-proposed statement. First, the EU is still not a unified entity, especially regarding its foreign, security, and, even more so, defence policy. It remains a collection of 27 semi-independent states, some, such as Germany, being more independent than others, notably the Benelux countries (Belgium, the Netherlands, and Luxembourg). Ultimately, the EU's ability to achieve its declared foreign and security objectives depends on the political dynamics and appetite for further integration among member states. For example, the latest proposed 18th package of Russian sanctions was blocked by Hungary and Slovakia, and Brussels has limited options for action, at least for now.[xxxi] The EU's vast asymmetry in power with its neighbors can lead to perceptions of dominance and coercion, even if the EU does not intend to be seen that way.[xxxii] One does not have to look far, but consider the latest (since 2015) waves of immigration. In northern Africa, as well as in some parts of the Middle East, South Asia, and South America, the EU member states are predominantly seen as former colonial powers. There appears to be a shared sense of entitlement towards the EU and its member states regarding its imperial past, which was often anything but benign. Importantly, this does not refer to central and Eastern European members of the EU.[xxxiii] While the EU remains an economic (albeit comparatively declining) and normative power (at least this is what it likes to self-identify), it lacks the military capacity to project its influence in the same way that traditional hegemons have. It is also doubtful that even if the SAFE instrument is fully realized in the next couple of years, the EU member states will have the industrial and human capacity to match the great powers, such as the US, Russia, Turkey, Iran, or, most of all, China.  A quick juxtaposition of current defense spending, population numbers, population growth forecasts, and economic output forecasts tells us all we need to know in this regard. The answer is bitter for the EU; it is likely to matter less and less. On top of that, let's look at the notion of “benign”. What does it even mean? Perhaps the term is entirely false; maybe even the US does not now fulfill the “benign” requirements, at least not in the way it has been defined (as in the introduction). Perhaps, there has never really been a “benign hegemon,” and the EU should not even try to fill these shoes. As usual, there are more questions than answers. Whatever the EU becomes via SAFE, it will probably stand for, not the first time, as new and an “undefiable animal” – sui generis (of its kind) as the EU academics usually posit. The concept of the EU as a benign hegemon is complex and contested. While the EU does promote its values and norms through various means, the extent to which its influence is truly benign is debatable. The EU's internal divisions and its neighbors' perceptions of its power dynamics play a crucial role in shaping the reality of its regional role. Can the EU become a benign power in the future? The author of this analysis is rather negative. Especially, if the EU does not address the challenges as explored here: https://worldandnewworld.com/safe-europe-military-power-3/ and https://worldandnewworld.com/ukraine-european-defence-cooperation/   [1] Although not official, some discussions suggest animals like the Golden Eagle as potential symbols due to its historical significance in Europe, including its use in the Roman Empire and modern Germany.[i]   See more: https://en.wikipedia.org/wiki/Hegemonic_stability_theory[ii]Keay, L. (2023). Surviving the End of US Hegemony. The International Spectator. https://www.iai.it/en/pubblicazioni/c05/surviving-end-us-hegemony[iii]  Catley, B. (1997). Hegemonic America: The benign superpower? Contemporary Southeast Asia, 18(4), 377-399. ISEAS - Yusof Ishak Institute. https://www.jstor.org/stable/25798354[iv]   Catley, B. (1997). Hegemonic America: The Benign Superpower? Contemporary Southeast Asia, 18(4), 377–399. http://www.jstor.org/stable/25798354[v]Mearsheimer, J. J. (2016). Benign Hegemony. International Studies Review, 1(3). https://www.mearsheimer.com/wp-content/uploads/2019/06/Benign-Hegemony.pdf [vi] Gause, F. G. (2025). Hegemony, Unipolarity and American Failure in the Middle East. POMEPS Studies, 54, 41–47. https://pomeps.org/pomeps-studies-54-america-and-the-middle-east[vii] Wittes, T. C. (2007, March 22). American hegemony: Myth and reality. The Brookings Institution. Retrieved June 26, 2025, from https://www.brookings.edu/articles/american-hegemony-myth-and-reality/[viii] Bello, W. (2024). Overextension and Globalization: The Dynamics of Hegemonic Decline. Critical Sociology. https://doi.org/10.1177/08969205241266982[ix] Asuquo-Ekpo, B. (2024). China’s Economic, Military, Science and Technological Emergence in International Politics: Implications for United States’ Hegemony. World Journal Of Advanced Research and Reviews, 22(3), 804–814. https://doi.org/10.30574/wjarr.2024.22.3.1791[x]Lau, J. (2023). American Imperialism (pp. 185–194). Routledge eBooks. https://doi.org/10.4324/9781003121800-20[xi] Rashid, A., & Khuhro, A. A. (2023). Historical Insights of Global Power Transitions: Implications on US-China Relations. Perennial Journal of History, 4(2), 68–87. https://doi.org/10.52700/pjh.v4i2.156[xii] Cartwright, M. (2024). Embedded hegemony and the evolution of the United States’ structural power. International Relations. https://doi.org/10.1177/00471178241268418[xiii] Sen, O. F. (2024). Challenges to the American dollar hegemony. https://doi.org/10.32469/10355/106100[xiv] Knauft, B. M. (2007). Provincializing America: Imperialism, Capitalism, and Counterhegemony in the Twenty-first Century. Current Anthropology, 48(6), 781–805. https://doi.org/10.1086/521415[xv] Nuridah, I., Aulia, T., Aulia Sahada, N., Rodiyah, Z., Ndruru, S., Simangunsong, W. H., Rila, E. S., & Tampubolon, Y. L. (2024). Amerika Serikat sebagai Negara Adikuasa: Pengaruh dan Dominasi dari Akhir Abad ke-20 hingga Awal Abad ke-21. 1(3), 157–161. https://doi.org/10.57251/polyscopia.v1i3.1368[xvi] A global Europe: leveraging our power and partnership. (n.d.). European Commission, A Global Europe. Retrieved June 30, 2025, from https://commission.europa.eu/priorities-2024-2029/global-europe_en[xvii] European Commission (2025, April 14). Commission announces multiannual programme for Palestinian recovery and resilience worth up to €1.6 billion. European Commission, Press Release. https://ec.europa.eu/commission/presscorner/detail/en/ip_25_1055[xviii] European Union (n.d.). EU support for Ukraine. European Union. Retrieved June 30, 2025, from https://european-union.europa.eu/priorities-and-actions/eu-support-ukraine_en[xix] European Commission (2025, April 4). Joint press release on the EU-Central Asia Summit. European Commission. https://ec.europa.eu/commission/presscorner/detail/en/ip_25_983[xx] European Commission (2025, July 5). EU and Singapore sign landmark digital trade agreement. European Commission. https://ec.europa.eu/commission/presscorner/detail/en/ip_25_1152[xxi] European Council, Council of the Union (2025, July 5). EU trade agreements. European Council. https://www.consilium.europa.eu/en/policies/trade-agreements/[xxii] Merritt, G. (2023, October 3). Global Europe 1: The EU’s path to super-power status. Friends of Europe. https://www.friendsofeurope.org/insights/frankly-speaking-global-europe-1-the-eus-path-to-super-power-status/[xxiii] Lehne, S. (2024, March 21). The EU and the Global Battle of Narratives. Carnegie Europe. https://carnegieendowment.org/research/2024/03/the-eu-and-the-global-battle-of-narratives?lang=en¢er=europe[xxiv] Merritt, G. (2023, October 3). Global Europe 1: The EU’s path to super-power status. Friends of Europe. https://www.friendsofeurope.org/insights/frankly-speaking-global-europe-1-the-eus-path-to-super-power-status/[xxv] Lehne, S. (2024, March 21). The EU and the Global Battle of Narratives. Carnegie Europe. https://carnegieendowment.org/research/2024/03/the-eu-and-the-global-battle-of-narratives?lang=en¢er=europe[xxvi] European Commission (2022, July 18). Team Europe’s Official Development Assistance reaches €70.2 billion in 2021. European Commission. https://ec.europa.eu/commission/presscorner/detail/en/ip_22_4532[xxvii] European Council, Council of the Union (2025, June 30). EU migration and asylum policy. European Council, Council of the European Union. https://www.consilium.europa.eu/en/policies/eu-migration-policy/[xxviii] European Council, Council of the Union (2024, May 14). The Council adopts the EU’s pact on migration and asylum. European Council, Council of the European Union. https://www.consilium.europa.eu/en/press/press-releases/2024/05/14/the-council-adopts-the-eu-s-pact-on-migration-and-asylum/[xxix] The Diplomatic Service of the European Union (2024, January 23). Disinformation and Foreign Interference: Speech by High Representative/Vice-President Josep Borrell at the EEAS Conference. European Council, External Action. https://www.eeas.europa.eu/eeas/disinformation-and-foreign-interference-speech-high-representativevice-president-josep-borrell-eeas_en[xxx] Merritt, G. (2023, October 3). Global Europe 1: The EU’s path to super-power status. Friends of Europe. https://www.friendsofeurope.org/insights/frankly-speaking-global-europe-1-the-eus-path-to-super-power-status/[xxxi] Vysotska, T., & POHORILOV, S. (2025, June 30). 18th package of sanctions against Russia being blocked not only by Slovakia, but also by Hungary. 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In Latin America, Cuba, Nicaragua, and Venezuela are not alone in their support for Russia and its invasion of Ukraine. In many cases, support has been disguised as an interest in peace or a neutral stance towards the conflict, as seen in the cases of Colombia, Mexico, and Brazil. While we find manifold diplomatic approaches toward Russia and Ukraine in Latin America, the underlying motivations can be understood in terms of support or rejection. While a majority of nations reject the invasion, considering it a threat to territorial sovereignty and self-determination, others have been reluctant to place any blame on Russia. More broadly, there has been less of an ideological bloc and more of an anti-imperialist or anti-colonial sentiment, with a few exceptions, such as Gabrie Boric from Chile who has publicly repudiated Russia’s aggression against Ukraine. His opposition is a departure from other Latin American leftist leaders like Luiz Inácio Lula da Silva and Gustavo Francisco Petro who have been more critical of Volodymyr Zelensky than Vladimir Putin. However, we can still identify three distinctive approaches to the crisis: 1) geopolitical, 2) economic, and 3) historical. The region has a keen interest in keeping its doors open to Russia. BRICS members like Brazil have managed to maintain their alleged neutrality in the pursuit of peace—even as President Lula has explicitly supported  Putin—while simultaneously protecting their economic interests. Others like Colombia and Mexico have shielded their unwillingness to condemn Putin’s invasion of Ukraine in an apparent push for peace. On the economic front, attitudes towards Russia are more tenuous given that Russia’s capability for foreign direct investment has been significantly reduced by the brunt of the war, along with the impact of the economic sanctions that followed their aggression. To be sure, Russia’s investments in the region have been winding down for some time, with a decreasing profile in areas such as energy, oil, and gas, as well as software and IT. However, the economic ties are more significant in the cases of Cuba, Nicaragua, and Venezuela—where they are joined more by their subjection to economic sanctions, and therefore the necessity to evade the consequences of economic isolation. There are specific areas key to this alliance: Russian fertilisers, along with oil and diesel, are critical to bypassing Western sanctions. Meanwhile, historical ties are more consequential than is commonly understood. Misinterpretations of Russia’s Soviet past by leftist-governed Latin American countries and longstanding social and cultural commonalities partially explain the continued support from diverse leaders such as Lula and Jair Bolsonaro in Brazil. These ties, rooted in shared anti-colonial sentiments and cultivated over decades, and regardless of ideological shifts, illustrate Russia’s multifaceted regional influence. This context underscores the fact that Russia’s regional impact transcends ideological lines, with both left and right-wing governments either explicitly supporting Russia or criticising Ukraine’s NATO aspirations to justify Russia’s aggression. The return of Donald Trump to the White House has prominent leaders of the Latin American left aligning with the new administration, resulting in significant consequences for the region. The new US administration’s criticism of Kyiv resonates with positions held by Brazil, Mexico, Colombia, Cuba, and Nicaragua. Despite ideological differences, their alignment emerges from a mix of political affinities, geopolitical strategies, and historical connections. Putin’s explicit defiance of Donald Trump’s negotiation efforts raises questions about Latin America’s influence over the conflict, largely due to its initial reluctance to adopt a decisive stance against Putin. The lonely voice condemning Putin’s war of attrition continues to be Chilean President Gabriel Boric, in stark contrast to Lula DaSilva and Gustavo Petro, who remain in Putin’s corner, making it unlikely they can be viewed as honest brokers in a peace initiative. Trump’s policies have prompted Brazil and Colombia to voice limited concerns about US plans for Ukraine, although still refraining from outright condemnation of Russia. This stance appears less a genuine support for Ukraine and more an opposition to US involvement in peace processes, even blaming Ukraine as partially responsible. Meanwhile, ideology alone has proven insufficient to prompt unified condemnation of Russia or widespread support for Ukraine in Latin America. Previous efforts by the Biden administration to secure regional military assistance for Ukraine were met with firm rejection and reluctance. This distancing, interpreted as tacit support for Russia, contributes to concerns about increasing authoritarian tendencies in the region, reflecting a diminished commitment to emerging democracies in crisis. Effectively abandoned by the international community, Ukraine faces negotiations with nations seeking its valuable earth minerals in exchange for protection, essentially framing it within a debt relief context. The absence of significant Latin American critique of this neocolonial approach underscores a troubling shift where sovereignty and self-determination appear increasingly disposable, contingent upon geopolitical interests and contexts. Maria I. Puerta Riera is a Visiting Professor of Political Science at Valencia College in Orlando, FL., where she teaches U.S. Government and International Politics. She holds a PhD. in Social Sciences, with her research focusing on the crises of democracies in Latin America. She has a special interest in Venezuela, Cuba, and Nicaragua, and is currently working on the effects of the illiberal regimes of China and Russia and their use of sharp power in the region. This article is published under a Creative Commons License and may be republished with attribution.

Abstract We examine the roles of Gold and Bitcoin as a hedge, a safe haven, and a diversifier against the coronavirus disease 2019 (COVID-19) pandemic and the Ukraine War. Using a rolling window estimation of the dynamic conditional correlation (DCC)-based regression, we present a novel approach to examine the time-varying safe haven, hedge, and diversifier properties of Gold and Bitcoin for equities portfolios. This article uses daily returns of Gold, Bitcoin, S&P500, CAC 40, and NSE 50 from January 3, 2018, to October 15, 2022. Our results show that Gold is a better safe haven than the two, while Bitcoin exhibits weak properties as safe haven. Bitcoin can, however, be used as a diversifier and hedge. This study offers policy suggestions to investors to diversify their holdings during uncertain times. Introduction Financial markets and the diversity of financial products have risen in both volume and value, creating financial risk and establishing the demand for a safe haven for investors. The global financial markets have faced several blows in recent years. From the Global Financial Crisis (GFC) to the outbreak of the pandemic and uncertainty regarding economic policy measures of governments and central banks, the financial markets including equity markets around the world were faced with severe meltdowns. This similar behavior was observed in other markets including equity and commodity markets, resulting in overall uncertainty. In this scenario, the investors normally flock toward the safe-haven assets to protect their investment. In normal situations, investors seek to diversify or hedge their assets to protect their portfolios. However, the financial markets are negatively impacted when there are global uncertainties. Diversification and hedging methods fail to safeguard investors’ portfolios during instability because almost all sectors and assets are negatively affected (Hasan et al., 2021). As a result, investors typically look for safe-haven investments to safeguard their portfolios under extreme conditions (Ceylan, 2022). Baur and Lucey (2010) provide the following definitions of hedge, diversifier, and safe haven: Hedge: An asset that, on average, has no correlation or a negative correlation with another asset or portfolio. On average, a strict hedge has a (strictly) negative correlation with another asset or portfolio.Diversifier: An asset that, on average, has a positive correlation (but not perfect correlation) with another asset or portfolio. Safe haven: This is the asset that in times of market stress or volatility becomes uncorrelated or negatively associated with other assets or a portfolio. As was previously indicated, the significant market turbulence caused by a sharp decline in consumer spending, coupled with insufficient hedging opportunities, was a common feature of all markets during these times (Yousaf et al., 2022). Nakamoto (2008) suggested a remedy by introducing Bitcoin, a “digital currency,” as an alternative to traditional fiduciary currencies (Paule-Vianez et al., 2020). Bitcoin often described as “Digital Gold” has shown greater resilience during periods of crises and has highlighted the potential safe haven and hedging property against uncertainties (Mokni, 2021). According to Dyhrberg (2016), the GFC has eased the emergence of Bitcoin thereby strengthening its popularity. Bouri et al. (2017) in their study indicate that Bitcoin has been viewed as a shelter from global uncertainties caused by conventional banking and economic systems. Recent research has found that Bitcoin is a weak safe haven, particularly in periods of market uncertainty like the coronavirus disease 2019 (COVID-19) crisis (Conlon & McGee, 2020; Nagy & Benedek, 2021; Shahzad et al., 2019; Syuhada et al., 2022). In contrast to these findings, a study by Yan et al. (2022) indicates that it can function as a strong safe haven in favorable economic times and with low-risk aversion. Ustaoglu (2022) also supports the strong safe-haven characteristic of Bitcoin against most emerging stock market indices during the COVID-19 period. Umar et al. (2023) assert that Bitcoin and Gold are not reliable safe-havens. Singh et al. (2024) in their study reveal that Bitcoin is an effective hedge for investments in Nifty-50, Sensex, GBP–INR, and JPY–INR, at the same time a good diversifier for Gold. The study suggests that investors can incorporate Bitcoin in their portfolios as a good hedge against market volatility in equities and commodities markets. During the COVID-19 epidemic, Barbu et al. (2022) investigated if Ethereum and Bitcoin could serve as a short-term safe haven or diversifier against stock indices and bonds. The outcomes are consistent with the research conducted by Snene Manzli et al. (2024). Both act as hybrid roles for stock market returns, diversifiers for sustainable stock market indices, and safe havens for bond markets. Notably, Bhuiyan et al. (2023) found that Bitcoin provides relatively better diversification opportunities than Gold during times of crisis. To reduce risks, Bitcoin has demonstrated a strong potential to operate as a buffer against global uncertainty and may be a useful hedging tool in addition to Gold and similar assets (Baur & Lucey, 2010; Bouri et al., 2017; Capie et al., 2005; Dyhrberg, 2015). According to Huang et al. (2021), its independence from monetary policies and minimal association with conventional financial assets allow it to have a safe-haven quality. Bitcoins have a substantial speed advantage over other assets since they are traded at high and constant frequencies with no days when trading is closed (Selmi et al., 2018). Additionally, it has been demonstrated that the average monthly volatility of Bitcoin is higher than that of Gold or a group of international currencies expressed in US dollars; nevertheless, the lowest monthly volatility of Bitcoin is lower than the maximum monthly volatility of Gold and other foreign currencies (Dwyer, 2015). Leverage effects are also evident in Bitcoin returns, which show lower volatilities in high return periods and higher volatilities in low return times (Bouri et al., 2017; Liu et al., 2017). According to recent research, Bitcoins can be used to hedge S&P 500 stocks, which increases the likelihood that institutional and retail investors will build secure portfolios (Okorie, 2020). Bitcoin demonstrates strong hedging capabilities and can complement Gold in minimizing specific market risks (Baur & Lucey, 2010). Its high-frequency and continuous trading further enrich the range of available hedging tools (Dyhrberg, 2016). Moreover, Bitcoin spot and futures markets exhibit similarities to traditional financial markets. In the post-COVID-19 period, Zhang et al. (2021) found that Bitcoin futures outperform Gold futures.Gold, silver, palladium, and platinum were among the most common precious metals utilized as safe-haven investments. Gold is one such asset that is used extensively (Salisu et al., 2021). Their study tested the safe-haven property of Gold against the downside risk of portfolios during the pandemic. Empirical results have also shown that Gold functions as a safe haven for only 15 trading days, meaning that holding Gold for longer than this period would result in losses to investors. This explains why investors buy Gold on days of negative returns and sell it when market prospects turn positive and volatility decreases (Baur & Lucey, 2010). In their study, Kumar et al. (2023) tried to analyse the trends in volume throughout futures contracts and investigate the connection between open interest, volume, and price for bullion and base metal futures in India. Liu et al. (2016) in their study found that there is no negative association between Gold and the US stock market during times of extremely low or high volatility. Because of this, it is not a strong safe haven for the US stock market (Hood & Malik, 2013). Post-COVID-19, studies have provided mixed evidence on the safe-haven properties of Gold (Bouri et al., 2020; Cheema et al., 2022; Ji et al., 2020). According to Kumar and Padakandla (2022), Gold continuously demonstrates safe-haven qualities for all markets, except the NSE, both in the short and long term. During the COVID-19 episode, Gold’s effectiveness as a hedge and safe-haven instrument has been impacted (Akhtaruzzaman et al., 2021). Al-Nassar (2024) conducted a study on the hedge effectiveness of Gold and found that it is a strong hedge in the long run. Bhattacharjee et al. (2023) in their paper examined the symmetrical and asymmetrical linkage between Gold price levels and the Indian stock market returns by employing linear autoregressive distributed lag and nonlinear autoregressive distributed lag models. The results exhibit that the Indian stock market returns and Gold prices are cointegrated. According to the most recent study by Kaczmarek et al. (2022), Gold has no potential as a safe haven, despite some studies on the COVID-19 pandemic showing contradictory results. The co-movements of Bitcoin and the Chinese stock market have also normalized as a result of this epidemic (Belhassine & Karamti, 2021). Widjaja and Havidz (2023) verified that Gold was a safe haven asset during the COVID-19 pandemic, confirming the Gold’s safe-haven characteristic. As previously pointed out, investors value safe-haven investments in times of risk. Investors panic at these times when asset prices fall and move from less liquid (risky) securities to more liquid (safe) ones, such as cash, Gold, and government bonds. An asset must be bought and sold rapidly, at a known price, and for a reasonably modest cost to be considered truly safe (Smales, 2019). Therefore, we need to properly re-examine the safe-haven qualities of Gold and Bitcoin due to the mixed evidences regarding their safe-haven qualities and the impact of COVID-19 and the war in Ukraine on financial markets. This work contributes to and deviates from the body of existing literature in the following ways. We propose a novel approach in this work to evaluate an asset’s time-varying safe haven, hedge, and diversifier characteristics. This research examines the safe haven, hedging, and diversifying qualities of Gold and Bitcoin against the equity indices; S&P 500, CAC 40, and NSE 50. Through the use of rolling window estimation, we extend the methodology of Ratner and Chiu (2013) by estimating the aforementioned properties of the assets. Comparing rolling window estimation to other conventional techniques, the former will provide a more accurate representation of an asset’s time-varying feature. This study explores the conventional asset Gold’s time-varying safe haven, hedging, and diversifying qualities during crises like the COVID-19 pandemic and the conflict in Ukraine. We use Bitcoin, an unconventional safe-haven asset, for comparison. Data and Methodology We use the daily returns of three major equity indices; S&P500, CAC 40, and NSE 50 from January 3, 2018, to October 15, 2022. The equity indices were selected to represent three large and diverse markets namely the United States, France, and India in terms of geography and economic development. We assess safe-haven assets using the daily returns of Gold and Bitcoin over the same time. Equity data was collected from Yahoo Finance, Bitcoin data from coinmarketcap.com, and Gold data from the World Gold Council website. Engle (2002) developed the DCC (Dynamic Conditional Correlation)-GARCH model, which is frequently used to assess contagion amid pandemic uncertainty or crises. Time-varying variations in the conditional correlation of asset pairings can be captured using the DCC-GARCH model. Through employing this model, we can analyse the dynamic behavior of volatility spillovers. Engle’s (2002) DCC-GARCH model contains two phases; 1. Univariate GARCH model estimation2. Estimation of time-varying conditional correlation. For its explanation, mathematical characteristics, and theoretical development, see here [insert the next link in “the word here” https://journals.sagepub.com/doi/10.1177/09711023251322578] Results and Discussion The outcomes of the parameters under the DCC-GARCH model for each of the asset pairs selected for the investigation are shown in Table 1.   First, we look at the dynamical conditional correlation coefficient, ρ.The rho value is negative and insignificant for NSE 50/Gold, NSE 50 /BTC, S&P500/Gold, and S&P500/BTC indicating a negative and insignificant correlation between these asset pairs, showing Gold and Bitcoin as potential hedges and safe havens. The fact that ρ is negative and significant for CAC 40/Gold suggests that Gold can be a safe haven against CAC 40 swings. The asset pair CAC/BTC, on the other hand, has possible diversifier behavior with ρ being positive but statistically insignificant. Next, we examine the behavior of the DCC-GARCH parameters; α and β. We find that αDCC is statistically insignificant for all the asset pairs, while βDCC is statistically significant for all asset pairs. βDCC quantifies the persistence feature of the correlation and the extent of the impact of volatility spillover in a particular market’s volatility dynamics. A higher βDCC value implies that a major part of the volatility dynamics can be explained by the respective market’s own past volatility. For instance, the NSE 50/Gold’s βDCC value of 0.971 shows that there is a high degree of volatility spillover between these two assets, with about 97% of market volatility being explained by the assets’ own historical values and the remainder coming from spillover. Thus, we see that the volatility spillover is highly persistent (~0.8) for all the asset pairs except NSE 50/BTC. The results above show that the nature of the dynamic correlation between the stock markets, Bitcoin and Gold is largely negative, pointing toward the possibility of Gold and Bitcoin being hedge/safe haven. However, a detailed analysis is needed to confirm the same by employing rolling window analysis, and we present the results in the forthcoming section. We present the rolling window results for S&P500 first. We present the regression results for Gold in Figure 1 and Bitcoin in Figure 2   Figure 1. Rolling Window Regression Results for S&P500 and Gold.Note: Areas shaded under factor 1 represent significant regression coefficients. In Figure 1, we examine the behavior of β0 (intercept term), β1, β2, and β3 (partial correlation coefficients). The intercept term β0 will give an idea about whether the asset is behaving as a diversifier or hedge. Here, the intercept term shows significance most of the time. However, during 2018, the intercept was negative and significant, showing that it could serve as a hedge during geopolitical tensions and volatilities in the global stock market. However, during the early stages of COVID-19, we show that the intercept is negative and showing statistical significance, suggesting that Gold could serve as a hedge during the initial shocks of the pandemic. These findings are contrary to the results in the study by Tarchella et al. (2024) where they found hold as a good diversifier. Later, we find the intercept to be positive and significant, indicating that Gold could act as a potential diversifier. But during the Russia-Ukraine War, Gold exhibited hedge ability again. Looking into the behavior of β1, which is the partial correlation coefficient for the tenth percentile of return distribution shows negative and insignificant during 2018. Later, it was again negative and significant during the initial phases of COVID-19, and then negative in the aftermath, indicating that Gold could act as a weak safe haven during the COVID-19 pandemic. Gold could serve as a strong safe haven for the SP500 against volatility in the markets brought on by the war in Ukraine, as we see the coefficient to be negative and large during this time. From β2 and β3, the partial correlation coefficients of the fifth and first percentile, respectively, show that Gold possesses weak safe haven properties during COVID-19 and strong safe haven behavior during the Ukraine crisis. Next, we examine the characteristics of Bitcoin as a hedge/diversifier/safe haven against the S&P500 returns. We present the results in Figure 2.   Figure 2. Rolling Window Regression Results for S&P500 and Bitcoin.Note: Areas shaded under factor 1 represent significant regression coefficients. Like in the previous case, we begin by analysing the behavior of the intercept coefficient, which is β0. As mentioned earlier the intercept term will give a clear picture of the asset’s hedging and diversifier property. In the period 2018–2019, the intercept term is positive but insignificant. This could be due to the large volatility in Bitcoin price movements during the period. It continues to be minimal (but positive) and insignificant during 2019–2020, indicating toward weak diversification possibility. Post-COVID-19 period, the coefficient shows the significance and positive value, displaying the diversification potential. We see that the coefficient remains positive throughout the analysis, confirming Bitcoin’s potential as a diversifier. Looking into the behavior of β1 (the partial correlation coefficient at tenth percentile), it is positive but insignificant during 2018. The coefficient is having negative sign and showing statistical significance in 2019, suggesting that Bitcoin could be a good safe haven in that year. This year was characterized by a long list of corporate scandals, uncertainties around Brexit, and tensions in global trade. We can observe that throughout the COVID-19 period, the coefficient is showing negative sign and negligible during the March 2020 market meltdown, suggesting inadequate safe-haven qualities. However, Bitcoin will regain its safe-haven property in the coming periods, as the coefficient is negative and significant in the coming months. The coefficient is negative and shows statistical significance during the Ukrainian crisis, suggesting strong safe-haven property. Only during the Ukrainian crisis could Bitcoin serve as a safe haven, according to the behavior of β2, which displays the partial correlation coefficient at the fifth percentile. Bitcoin was a weak safe haven during COVID-19 and the Ukrainian crisis, according to β3, the partial correlation coefficient for the first percentile (coefficient negative and insignificant). According to the overall findings, Gold is a stronger safe haven against the S&P 500’s swings. This result is consistent with the previous studies of Triki and Maatoug (2021), Shakil et al. (2018), Będowska-Sójka and Kliber (2021), Drake (2022), and Ghazali et al. (2020), etc. The same analysis was conducted for the CAC 40 and the NSE 50; the full analysis can be found here [insert the next link in “the word here” https://journals.sagepub.com/doi/10.1177/09711023251322578]. However, it is important to highlight the respective results: In general, we may say that Gold has weak safe-haven properties considering CAC40. We can conclude that Bitcoin’s safe-haven qualities for CAC40 are weak. We can say that Gold showed weak safe-haven characteristics during the Ukraine crisis and good safe-haven characteristics for the NSE50 during COVID-19. We may say that Bitcoin exhibits weak safe haven, but strong hedging abilities to NSE50. Concluding Remarks In this study, we suggested a new method to evaluate an asset’s time-varying hedge, diversifier, and safe-haven characteristics. We propose a rolling window estimation of the DCC-based regression of Ratner and Chiu (2013). Based on this, we estimate the conventional asset’s time-varying safe haven, hedging, and diversifying properties during crises like the COVID-19 pandemic and the conflict in Ukraine. For comparison purposes, we include Bitcoin, a nonconventional safe-haven asset. We evaluate Gold and Bitcoin’s safe haven, hedging, and diversifier properties to the S&P 500, CAC 40, and NSE 50 variations. We use a rolling window of length 60 to estimate the regression. From the results, we find that Gold can be considered as a better safe haven against the fluctuations of the S&P 500. In the case of CAC 40, Gold and Bitcoin have weak safe-haven properties. While Bitcoin demonstrated strong safe-haven characteristics during the Ukraine crisis, Gold exhibited strong safe-haven characteristics during COVID-19 for the NSE 50. Overall, the findings indicate that Gold is the better safe haven. This outcome is consistent with earlier research (Będowska-Sójka & Kliber, 2021; Drake, 2022; Ghazali et al., 2020; Shakil et al., 2018; Triki & Maatoug, 2021). When it comes to Bitcoin, its safe-haven feature is weak. Bitcoin, however, works well as a diversifier and hedge. Therefore, from a policy perspective, investing in safe-haven instruments is crucial to lower the risks associated with asset ownership. Policymakers aiming to enhance the stability of financial portfolios might encourage institutional investors and other market players to incorporate Gold into their asset allocations. Gold’s strong safe-haven qualities, proven across various market conditions, make it a reliable choice. Gold’s performance during crises like COVID-19 highlights its potential to mitigate systemic risks effectively. Further, Bitcoin could also play a complementary role as a hedge and diversifier, especially during periods of significant volatility such as the Ukraine crisis. While Bitcoin’s safe-haven characteristics are relatively weaker, its inclusion in a diversified portfolio offers notable value and hence it should not be overlooked. Further, policymakers may consider how crucial it is to monitor dynamic correlations and periodically rebalance portfolios to account for shifts in the safe haven and hedging characteristics of certain assets. Such measures could help reduce the risks of over-reliance on a single asset type and create more resilient portfolios that can better withstand global economic shocks. For future research, studies can be conducted on the estimation of the rolling window with different widths. This is important to understand how the safe-haven property changes across different holding periods. Further, more equity markets would be included to account for the differences in market capitalization and index constituents. This study can be extended by testing these properties for multi-asset portfolios as well. We intend to take up this study in these directions in the future. Data Availability StatementNot applicable.Declaration of Conflicting InterestsThe authors declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.FundingThe authors received no financial support for the research, authorship, and/or publication of this article.ReferencesAkhtaruzzaman M., Boubaker S., Lucey B. M., & Sensoy A. (2021). Is gold a hedge or a safe-haven asset in the COVID-19 crisis? Economic Modelling, 102, 105588. Crossref. Web of Science.Al-Nassar N. S. (2024). Can gold hedge against inflation in the UAE? A nonlinear ARDL analysis in the presence of structural breaks. PSU Research Review, 8(1), 151–166. Crossref.Barbu T. C., Boitan I. A., & Cepoi C. O. (2022). Are cryptocurrencies safe havens during the COVID-19 pandemic? A threshold regression perspective with pandemic-related benchmarks. Economics and Business Review, 8(2), 29–49. 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In the Middle East, China seeks to appear neutral by engaging in dialogue with all actors, from Tehran to Tel Aviv, including Riyadh. Beijing's objective is clear: to establish itself as a guarantor of stability to secure its energy and commercial interests. The People's Republic of China's (PRC) commitment to the Middle East reflects a carefully calibrated geostrategic approach, aiming to preserve regional stability, ensure uninterrupted access to energy resources, and promote its famous Belt and Road Initiative (BRI), also known as the 'New Silk Roads.' In this region, the Sino-Iranian relationship is most often highlighted due to its political weight and military dimension; however, whether in economic, diplomatic, or strategic terms, Beijing's presence in this area certainly extends beyond its ties with Tehran. As elsewhere in the world, in the Middle East, China divides its diplomatic partnerships into several types, listed here in descending order of intensity: "global strategic partnerships" (in the Middle East: Egypt, Iran, Saudi Arabia, United Arab Emirates, and Bahrain); "strategic partnerships" (Iraq, Jordan, Kuwait, Oman, Qatar, Syria, Turkey, and the Palestinian Authority); "friendly cooperation partnerships" (Lebanon and Yemen); and finally, "innovative global partnerships" (Israel). China is redefining its priorities in the Middle East  Energy dependence is one of the essential drivers of China's policy in the region. Gulf countries, particularly Saudi Arabia, the United Arab Emirates, and Kuwait, are among the main suppliers of crude oil to the PRC—well ahead of Iran in terms of volume, as well as reliability and investment opportunities. This economic reality compels China to invest much more heavily in the Gulf Cooperation Council (GCC) countries, where financial stability, political predictability, and institutional openness promote sustainable strategic partnerships and infrastructure development, unlike in Iran. For these reasons, the Gulf countries have indirectly become essential nodes in the architecture of the BRI through trade, receiving nearly six times more Chinese investments than Iran. Although Iran has geographical interest as a potential corridor between China and Europe, the persistent effect of international sanctions, poor economic management, and regional adventurism severely limit its ability to attract sustainable Chinese investments. In contrast, Israel offers a functioning and favorable environment for investors, making it a preferred destination for Chinese capital and infrastructure projects. Its economy is based on solid infrastructure and a dynamic technology sector. Despite geopolitical shocks, including the recent clashes with Iran – which will undoubtedly impact the country's business environment – Israel, as a member of the OECD, remains attractive in terms of business environment and investment, mainly because the foundations of its economic environment are stronger than those of Iran or Saudi Arabia. The Hebrew state occupies an increasing place within the BRI – not due to the volume of Chinese direct investments, but because of its strategic position and ambitious infrastructure agenda. Its geographical location – straddling Europe, Asia, and Africa via the Mediterranean – makes it a key land and maritime connectivity point that provides an alternative option to Iran for linking China to Europe. In this context, China and Israel have made progress in their negotiations for a free trade agreement that has been discussed since 2016. Although discussions have been suspended since 2023, there remains hope that an agreement could be signed once stability returns to the region. China's trade with Israel and Iran: divergent trajectories China's commercial relations with Israel and Iran reveal two distinct economic approaches.  With Israel, trade is increasingly marked by imports of high technologies - particularly in the semiconductor field - reflecting a growing technological interdependence.  In contrast, trade with Iran remains focused on industrial goods and natural resources, illustrating a more traditional partnership based on access to raw materials. These contrasting dynamics reflect China's strategic flexibility, which relies on Israeli innovation while securing its supplies from Iran.  Tensions in the Strait of Hormuz are testing China's strategy in Iran  For nearly fifty years, Iran has turned to China for economic support. However, despite 21 Chinese greenfield investment projects between 2003 and 2020 – mainly in the energy sector – Beijing has gradually begun to disengage due to international sanctions and ongoing regional instability. Large companies such as CNPC and Sinopec have reduced their stake, or even abandoned some projects, while tech companies like Huawei and Lenovo have also scaled back their presence in the Iranian market. Between 2017 and 2019, Iran reportedly saw an outflow of Chinese capital estimated at $990 million. China views instability in the Middle East, particularly the confrontation between Israel and Iran, as a direct threat to its economic and commercial interests. As the world's largest buyer of Iranian oil, China is especially concerned about potential disruptions in strategic maritime routes, particularly the Strait of Hormuz. In June 2025, Chinese oil imports from Iran significantly increased, reaching up to 1.8 million barrels per day – a surge that occurred just before the military escalation between Israel and Iran, which raised concerns about the security of the Strait of Hormuz. A sign of the weight of the PRC in this region: after the reciprocal airstrikes between Israel and Iran, and Tehran's threat to close this crucial passage, U.S. Secretary of State Marco Rubio urged Beijing to intervene, emphasizing China's heavy dependence on this oil route. China–United States: strategic tensions in a transitioning Middle East China and the United States recently signed a trade agreement and established a 90-day tariff truce, aiming to resolve some key disputes and stabilize economic relations. Furthermore, on the military front, Iran and China signed a military cooperation agreement as early as 2016, reflecting their mutual desire to counter American influence in the region and secure trade routes. Historically, China has supported Iran through arms sales, technology transfers, and training programs. Moreover, despite the official rhetoric, some reports suggest that Chinese technologies have contributed to the development of Iran's ballistic program. The Sino-Iranian relationship in defense illustrates a two-level diplomacy: China discreetly supports Iran's military autonomy while ensuring it does not compromise its strategic relationships with other important regional partners, including Israel, with whom it also maintains top-level security dialogues. This highlights Beijing's broader ambition: to avoid regional polarizations and maintain a balance of power favorable to its interests. China's strategy in the Middle East towards the United States is based on a principle of equidistance: to increase its influence without direct confrontation, while drawing strategic benefits from Saudi Arabia, Israel, Iran, and Egypt. In this perspective, the People's Republic of China does not seek to replace the United States as the dominant power in the region, but rather to offer a multipolar presence focused on preserving stability. Maintaining the status quo, avoiding direct conflicts, and building a parallel system of influence through infrastructure, trade, and diplomacy are the pillars of China's position in the Middle East. This approach ensures Beijing secure access to energy, trade corridors, and sustainable geopolitical influence from Tel Aviv to Tehran.

France and New Caledonian stakeholders have agreed to start a one-year process that may reconfigure France’s relation to its former colony. However, materialising its goals will require a lot of political manoeuvring. One of Australia’s nearest neighbours, New Caledonia, may enter a new political configuration, short of independence. On 12 July, 2025, after ten days and nights of intense negotiations, representatives of the French government and six New Caledonian delegations signed the Bougival Accord, setting a one-year calendar to completely reconfigure New Caledonia’s politico-legal configuration, and also France’s constitutional system. Besides the media fanfare and President Emmanuel Macron hailing the agreement as “historic,” closer inspection shows a weakened pro-independence movement, and France leveraging a unique window of opportunity to consolidate its geostrategic presence in the Pacific; and with it, ensure a stable supply of nickel to France and Europe, while keeping Chinese influence at bay. This article provides some preliminary reflections on the Bougival Accord upon first reading. It does not intend to disparage the importance of the agreement and its commendable goal to advance self-determination in the region. Its main argument is that the Accord is a consensus made from concessions, but it seems to benefit France the most. Background The Accord follows a rushed independence referendum in December 2021, held during the COVID-19 pandemic, and a more turbulent electoral reform in 2024, which extended voting rights to 10-year residents and sparked fears of diluting Indigenous Kanaki influence. Civil unrest promptly resulted, and a brutal military response followed, with 14 dead, thousands of arrests, and independence activists sent to French prisons. The closure of the Kanaki-majority-controlled Koniambo mine, after Glencore’s withdrawal, caused one in six private sector workers to lose their job. Kanaki leaders had traditionally relied on “resource nationalism” to pursue economic autonomy, but economic hardship has diminished their negotiating power in this new agreement. Legal framework The Bougival Accord is not legally binding. It is a draft framework that will require further ratification through constitutional reform and a popular referendum scheduled for 2026. Notably, the Accord has no reference to terms such as “independence” or “referendum,” opting for the watered-down “emancipation” and “progressive decolonisation.” The preamble emphasises a “common destiny” between France and New Caledonia, portraying the latter as a benevolent partner and sole guarantor of democratic principles and the rule of law, in stark contrast to Chinese influence in the area. The Accord neatly aligns with France’s Indo-Pacific strategy, which outlines strategic pillars in defence and security, economic interests, rule of law, and ocean management. Power transfer amid political polarisation The Accord proposes a possible transfer of power from France to New Caledonia, but only in the areas of international relations, defence, currency, justice, and public order. Such transfer is not automatic, as it requires a qualified majority of 36 out of 54 seats (soon to be 56) in the New Caledonian Assembly. Under the current political fragmentation, 28 seats are held by the anti-independence parties and 25 by the pro-independence parties. Territorial configuration is the main hot topic in a deeply polarised political landscape, with both sides facing a tough time selling the Accord to their constituencies. Pro-independence supporters will likely be disappointed by the renouncement to any full-independence aspirations, whereas anti-independence groups may see a constitutional recognition of the new status quo as a defeat. Limited transfer of powers Even if the powers are transferred, France has ensured that it will keep significant control. New Caledonia’s ability to conduct international relations will now have to align with France’s foreign policy. On defence and security, New Caledonia has only obtained a mere consultative role. In regards to justice, Nouméa may develop rehabilitation and penitentiary policies, but the substantive criminal law will remain under French jurisdiction. The currency will remain the Franc Pacific, with a fixed exchange rate with the Euro, and New Caledonia will be given authority only to decide on its “symbolic designs.” This configuration is only novel to France’s paradigmatically centralised system, but is common in federal or autonomous states like Germany, Canada, or Spain. The new nickel strategy Nickel extraction may very well be the “de facto” central focus of the Accord. France explicitly links nickel to its, and Europe’s, industrial sovereignty. The Accord seems designed to limit Chinese influence, despite being New Caledonia’s primary nickel customer. After the closure of the Kanaki-controlled Koniambo mine, the Accord seems to resume ”business as usual.” With a weakened economic base, the pro-independence movement appears now more susceptible to concede to French demands. From all the potential infrastructure improvements that could have been proposed, only one is mentioned: improving energy production to ensure nickel production never stops. A new free-associated state? Many headlines focused on the novelty of creating “a state within a nation state.” Unprecedented as it may be under French law, it is not much different from territorial organisations elsewhere. British Overseas Territories keep a constitutional link to the United Kingdom and belong to their sovereignty territory. Cook Islands and Niue are self-governing states in free association with New Zealand, which cannot legislate for them, unlike France. Marshall Islands, Micronesia, and Palau are fully sovereign UN members that receive defence, funding, and social services by the US. In contrast, Puerto Rico is a US unincorporated territory that seems to share some similarities with New Caledonia’s proposed novel status (limited exercise of powers in exchange for federal funding and their citizens holding US passports). In conclusion, the Bougival Accord represents less a breakthrough in global governance than a shift in France’s approach to its former colonies. Most significantly, the Accord points demonstrates a moment of strategic weakness among the pro-independence forces, and a window of opportunity for France to consolidate its strategic presence in the Pacific. However, political gain should come second to protecting an exhausted local population, caught between quarrelling factions, and hoping that any Accord may lead to reconciliation. Their wellbeing is the true key to ensuring a peaceful and prosperous New Caledonia. Ignacio Portela Giráldez is a PhD Candidate at UNSW ADFA, researching the special territories of the European Union and British Overseas Territories. He holds a joint LLM in Comparative International and European Law by Maastricht University and Pompeu Fabra University and a Juris Doctor by the University of Puerto Rico. He is a Lecturer in Human Rights Protection and European Institutions for Criminal Justice at Pompey Fabra University, and is a former Institutional Relations Officer in the Cabinet of the Minister of Foreign Action and European Union of the Government of Catalonia. This article is published under a Creative Commons License and may be republished with attribution.

Analyse Suspended since the coups in Mali, Burkina Faso, and Niger, political parties are now banned by the ruling praetorians. However, the duration and severity of this democratic pause are difficult to predict. For the past four years, the military regimes in Burkina Faso, Mali, and Niger, now united under the Confederation of the Alliance of Sahel States (AES), have clung to power by closing the political space to traditional parties. Niger and Mali have begun procedures to dissolve these parties, while the Burkinabe government has banned all political activity since Captain Ibrahim Traoré came to power in September 2022. These measures, which unravel the achievements of the 1990s, are part of a coordinated strategy by the military aimed at consolidating their authority under the guise of political refoundation and the pursuit of national sovereignty. The authoritarian shift, which began subtly, is neither accidental nor isolated. It relies on a well-rehearsed narrative: political parties are responsible for political instability and economic underdevelopment and primarily serve the interests of corrupt elites. However, while banning traditional political groups might offer some apparent short-term stability, it doesn’t provide a viable and sustainable model of governance in societies where the culture of social and political struggles is deeply entrenched. Even if democratic institutions in Central Sahel were far from perfect before the recent coups, they guaranteed political pluralism, the principle of checks and balances, and the rule of law. According to official figures, Burkina Faso is said to have around 200 political parties, Niger 172, and Mali 300—an inflation accused of contributing to the fragmentation of the political landscape. In all systems, and the Sahel is no exception, parties play a key role in connecting the state and its citizens. However, instead of strengthening the social contract, their proliferation, in a context of electoral fatigue, has been perceived by some, including the military, as a factor of disorder and obsolescence of state authority. Towards “development dictatorships” On March 26, the Nigerien authorities officially announced the dissolution of all political parties, which had been suspended since the July 2023 coup d’état. During a televised address, General Abdourahamane Tiani, the head of the country, justified this decision as an act contributing to political refoundation. He cited national unity and the fight against jihadist insecurity and accused the parties of sowing division among citizens. This decision does not appear to have caused any major stir among the population, or the former political class excluded from managing the transition. The military in power in Bamako imitated this by ending political pluralism after a national dialogue that concluded at the end of April. Political pluralism, however, had been hard-won, particularly through the citizens’ struggle against the dictatorship of Moussa Traoré, who was overthrown in March 1991. The traditional political class opposed this and announced they would respond with demonstrations, despite threats of repression. This led General Assimi Goïta to first suspend all political parties and organizations, and then subsequently to formalize their dissolution. In neighboring Burkina Faso, political activities have been banned since the 2022 coup. On April 1st of this year, Captain Traoré unequivocally declared in a state media address to the nation that his country was experiencing a “popular and progressive revolution,” asserting that “never has a country developed through democracy.” This argument, which implicitly advocates for a “development dictatorship,” appeals to a segment of the population who see it as a credible alternative capable of driving modernization and progress. However, like Mali, Burkina Faso—which has previously experienced a one-party system—possesses a rich history of political and social struggle and resistance, making it difficult to reconcile with authoritarian tendencies. Faure Gnassingbé and the Civilian Coup The questioning of liberal democracy – never truly rooted in West Africa – is not the sole preserve of military regimes. In the region, with rare exceptions such as Cape Verde, Ghana, or Senegal (the latter two having sometimes experienced political transitions won through “sweat and blood”), the democratic picture remains broadly grim. While most governments have managed to hold regular elections, the consolidation of democratic practices is far from effective, creating conditions in some states for civilian leaders to manipulate constitutional texts to cling to power. Thus, after a controversial constitutional reform that shifted Togo from a presidential to a parliamentary system, Faure Gnassingbé, who has been in power since 2005, was sworn in on May 3rd as President of the Council of Ministers, now the highest executive office. Under this new system, he can remain in power indefinitely, if his party wins legislative elections. These controversial mandates, often described as civilian coups, are, moreover, leveraged by military governments in the Sahel as proof of the failure of electoral democracy. Although they have some specificities in their political trajectories, the countries of the Central Sahel have all experienced single-party rule and semi-democratic regimes. However, since the national conferences of the 1990s, political parties have never been as threatened as they are today. In Mali, immediately following independence in 1960, a single-party socialist regime was established under the leadership of Modibo Keïta. The 1968 coup d’état, led by the Military Com​mittee for National Liberation under General Moussa Traoré, then a lieutenant, installed an authoritarian police state. This regime, weakened by popular protest and international pressure, only collapsed in March 1991. This ushered in a period of political pluralism, which was tested by Tuareg rebellions in the north of the country and marred by the persistence of clientelist practices that inhibited the democratic promise. Five Unconstitutional Seizures of Power in Niger Burkina Faso’s recent political history, though marked by popular uprisings, remains dominated by a culture of coups d’état. Since gaining independence in 1960, eleven leaders have headed the Burkinabe executive. Of these, only three were civilians, collectively holding power for less than fifteen years. The remaining leaders presided over military regimes, even if some, like Blaise Compaoré’s, attempted to “civilianize” themselves. Like Mali, Burkina Faso’s history includes popular mobilizations that led to the downfall of its first president, Maurice Yaméogo, in 1966, and Compaoré in 2014. However, despite a highly active civil society advocating for the rule of law, democratic practices have struggled to take root. This persistent challenge allows the military to remain the eternal arbiter of the political game. Finally, in Niger, whose political stability has been praised by Western donors over the past two decades, General Abdourahamane Tiani’s coup against President Mohamed Bazoum’s administration on July 26, 2023, brutally highlighted the fragility of the political system. This event marks the fifth unconstitutional seizure of power by the military since independence in 1960. On several occasions, the Nigerian army — or certain segments of it — has intervened to “regulate” a political landscape characterized by clientelism and rent-seeking, demonstrating a praetorian culture deeply rooted in national governance. However, whether in Mali, Burkina Faso, or Niger, none of the preceding regimes had directly confronted political parties. Insecurity and corruption at the heart of discredit Insecurity has been a major factor in the widespread questioning of political parties in the Sahel. While democratic systems, theoretically based on deliberation and consensus-building, possess mechanisms for resolving crises, including in the security domain, none of the civilian regimes—all semi-democratic—have withstood the surge of armed terrorist groups. The worsening security crisis has discredited political parties. This is even though, with their territorial and national roots, they could have helped contain the threat by promoting social cohesion in electoral districts far from the capitals. Even worse, insecurity has largely legitimized the military’s entry into the political arena. This has come at the expense of political parties, which some segments of the public perceive as being more concerned with their electoral interests than with the territorial integrity of their states. As Burkina Faso and Mali crumbled, with vast portions of their territory eroded by jihadists, politicians were vying for the presidential seat, sometimes even at the peril of their own safety. For example, former Malian Prime Minister Soumaïla Cissé was kidnapped by terrorists during the campaign for the March 2020 legislative elections. By freeing themselves from the pressures of regional and international organizations advocating for a return to constitutional order, the military governments of the Sahel have succeeded in imposing the narrative that elections are no longer a national priority. Instead, the urgent need to reclaim Jihadist-held areas has taken precedence. In the current context, as long as the security crisis remains unresolved, liberal democracy appears to have little chance of flourishing in the Sahel. Long before the emergence and expansion of terrorist groups in the region, a disconnect between political parties and the popular masses of the Sahel was already evident. Too often concentrated in large cities, political parties, with rare exceptions, have little presence in rural areas, where they often only appear as elections approach. According to a 2024 survey published by Afrobarometer—a database that collects information on citizens’ political, economic, and social attitudes in over thirty African countries—the preference for democracy remains a minority view in Burkina Faso and Mali. Respectively, 82% and 66% of those surveyed stated they would favor a military takeover if leaders abused their positions for personal gain. As demonstrated earlier, even before the pre-insurrectional period, the democracies in Mali and Burkina Faso were already fragile and challenged with each sociopolitical crisis. 152,500 euros to create a political party However, the closure of political space and repression come at a cost. Silencing dissenting voices, as is currently happening in the three countries, may seem to strengthen the authority of the current regimes in the short term, but it also increases the risks of violent protest. Observing how military regimes in the Sahel operate, relying on popular mobilization, they don’t necessarily seek to abolish party politics but rather to control its parameters. The recommendations from the national dialogue in Mali even leave open the possibility for political actors to create new parties. However, these new formations will have to pay a deposit of 100 million CFA francs (approximately 152,500 euros) to exercise a right otherwise guaranteed by the Constitution. The official dissolution of existing parties in Mali and Niger, combined with stricter conditions for creating new ones, therefore doesn’t signify the advent of governance without parties; rather, it reflects a desire to control the political landscape. Indeed, the populist mode of governance promoted by the military is compatible with the logic of party disappearance, allowing them to maintain a direct relationship with their supporters. However, in Ouagadougou, Bamako, and Niamey, the military will need political intermediaries—parties or movements—to firmly establish their power. By delegitimizing traditional political parties in favor of civil society direction, often encouraged by Western democracies and international organizations in West Africa over the past three decades, the military now relies on organizations with opaque operations, thereby practicing politics by other means. Authoritarianism, even enlightened, is not enough The shrinking of political and civic space in the Sahel marks a decisive turning point, but it’s not unprecedented. Behind rhetoric of sovereignty, national unity, and reform, these decisions primarily aim to concentrate power in the hands of the military and sideline political figures who have been on the stage since the 1990s. By invoking the fight against terrorism, military powers seem intent on evading accountability mechanisms and equating any dissenting voice with a threat to national unity. Yet, the recent history of Burkina Faso, Mali, and Niger shows that the repression of political freedoms has never been a bulwark against dissent, nor has it guaranteed lasting stability. By refusing to address the true causes of the crisis – notably institutional fragility, identity cleavages, and the marginalization of rural areas in public policies – the military risks fueling the same dynamics of delegitimization that precipitated the fall of their predecessors. This is especially true given their difficulty in demonstrating greater effectiveness in managing the security crisis than the civilian leaders they overthrew on the grounds of incompetence. In the absence of an effective restoration of state authority across the entire territory, any ambition for democratic renewal appears illusory in the Sahel. While liberal democracy, often poorly applied in the sub-region, has not ensured sustainable economic and social progress, authoritarianism, even supposedly enlightened, cannot offer a credible response to the multidimensional crisis shaking the region. A Crisis of Intermediary Governance The current crisis is, above all, one of governance by intermediaries, whose limitations are now evident. To hope to reverse the trend, military regimes must focus on rebuilding the state, redeploying basic social services, and reconnecting peripheral regions, abandoned to violence, with urban centers. However, for the past four decades, successive governments in the Sahel have favored governance based on informal networks, often to the detriment of strong institutional anchoring in territorial margins. Today more than ever, the Central Sahel needs decentralized, inclusive, and participatory governance. Suppressing dissenting voices and excluding political actors from public debate will only deepen social fractures and plunge the region into a lasting night of despair, poverty, and violence.

Abstract European states currently lack a clear joint strategy on China and a coordinated approach to US–China competition. This article offers a novel perspective on the challenges for European approaches to this issue due to an omnipresent transatlantic component and the risk of an alliance dilemma. Illustratively focusing on France, Germany and the UK, it demonstrates that Europeans are facing a transatlantic alliance dilemma with the risks of abandonment and entrapment. It argues that Europe needs to strike a balance between its dependence on Washington, especially with regard to European security, while fearing entrapment by the US approach towards Beijing as it aims to maintain economic ties with China. The article concludes that the ramifications of this dilemma can be mitigated through a distinctly European approach to China, strengthening European coordination on China and bolstering European strategic autonomy. As a conceptual piece rather than a full empirical analysis, this article therefore unpacks the strategic challenge and lays the groundwork for further empirical works on the topic. Introduction Strategic competition between the US and China plays out in many realms of international affairs, ranging from global trade to security in the Indo-Pacific. European states are directly affected by this dynamic as they maintain critical ties with both sides. Albeit allies of the US through NATO, Europeans have been reluctant to align with the US on its approach to the Indo-Pacific and China, which is currently characterised by the quest to win the strategic competition with Beijing in all areas of international affairs (see Leoni 2023). Furthermore, Europe maintains close economic ties with Beijing, and imports from China to the EU have most recently increased (Lovely and Yan 2024). European governments certainly do not pursue an approach of maintaining equidistance between the US and China: not only do they regularly emphasise their strategic proximity to Washington, but more recent events, such as the willingness of European allies to publicly adopt the wording of the communiqué from NATO’s Washington summit (NATO 2024) describing China as an ‘enabler of Russia’s war effort in Ukraine’, clearly demonstrate that the tone is changing in European capitals (Politi 2023). However, Europeans still tend to emphasise China’s role in global affairs and the importance of including it in multilateral cooperation formats. With the re-election of Donald Trump as US president, European policy on China and its approach to US–China competition will increasingly be a focus of the US administration. While the exact approach of the new US government still remains to be defined, there are good reasons to anticipate a more hawkish China policy from Washington, through which the US might seek not only to further compete with China, but to actually win this competition (see Pottinger and Gallagher 2023). When designing their approaches towards China—which, among the key European states, only Germany has done so far, with the publication of its China strategy in 2023—Europeans always face a transatlantic elephant in the room. US–China competition, a structuring feature of international relations shaping the global order today through the increasing emergence of geopolitical blocs (see Leoni and Tzinieris 2024), and China’s rising global influence in almost all areas of international affairs—ranging from climate to economics, the rules-based order and security—are forcing European states to reflect on their approach vis-à-vis Beijing (for a full discussion, see Oertel 2023; García-Herrero and Vasselier 2024). As NATO members, European states also need to adapt their strategy in light of the partnership with the US as their key ally. This article argues that European approaches towards China, as shown in the examples of France, Germany and the UK, have a distinctly transatlantic component. It illustrates how these three European states find themselves in an alliance dilemma with the US, and how the risks associated with alliances also define European approaches to China and US–China competition more broadly. As the US administration regularly refers to China as a ‘challenge’ (US Department of Defense 2022), this article alludes to this formulation through the coining of the term ‘transatlantic China challenge’ to describe the strategic challenges Europeans are facing with regard to defining their approach vis-à-vis China and US–China competition more broadly. It offers a conceptual understanding of the strategic challenges for Europe in this context and thereby constitutes a basis for a more thorough empirical analysis. The alliance dilemma and European strategy in US–China competition Originating in realist international relations theory, the alliance dilemma generally describes a situation in which states face risks resulting from joining an alliance. As demonstrated by Snyder (1984), smaller allies especially face a parallel risk of abandonment and entrapment by a hegemon, that is, the dominating power, after joining an alliance. Abandonment, in these circumstances, implies that the hegemon has no further interest in defending or supporting the smaller allies, whereas entrapment refers to a situation in which a state is ‘dragged into a conflict over an ally’s interests that [it] does not share, or shares only partially’ (see Snyder 1984, 466–8). In the context of alliances, a small state is ‘the weaker part in an asymmetric relationship, which is unable to change the nature or functioning of the relationship on its own’ (Wivel et al. 2014, 9), and hence has more limited space for action than the great powers (Wivel and Thorhallsson 2018, 267). This definition arguably applies to Europe in its partnership with the US, as demonstrated by the excessive military and economic dominance of the US as compared to the European states (see Stockholm International Peace Research Institute n.d.; International Monetary Fund 2025). The re-election of Trump as US president now presents the risk of an increased alliance dilemma for Europeans. On the one hand, Trump has announced several times that he does not value the alliance commitments within NATO and potentially would not defend European allies (Sullivan 2024), threatening Europe with abandonment. This scenario is being taken seriously in European capitals, and reflections on how ‘defending Europe with less America’ (Grand 2024) could shape up have gained traction, especially in 2024. Similarly, defence initiatives within the EU to enhance the European contribution to the continent’s security have leapt forward in recent years (see Scazzieri 2025). On the other hand, even the Biden administration had pushed Europe to align with the US approach on China (see Lynch et al. 2023). However, France and Germany in particular, as the big EU member states, have been hesitant to do so, as reflected in France’s opposition to the opening of a NATO liaison office in Tokyo (McCurry 2023) and Germany’s vote against tariffs on Chinese electric vehicles, fearing reprisals from Beijing (Demarais 2024). Trump’s foreign policy might be strongly characterised by issue linkage, which means that policies in one area will be linked to those in another area. Through this strategy, the new US administration might force Europeans into alignment and thereby entrap them, making them accept policies they are not eager to support (see Barkin and Kratz 2025). The exact policies of the Trump administration vis-à-vis European allies remain to be seen, but it is not hard to imagine a scenario in which abandonment and entrapment could emerge or increase, namely when the threat of abandonment is used to entrap allies and force them to support certain policy decisions. The alliance dilemma could play out for Europeans specifically when designing their approaches towards China (see Barkin and Kratz 2025) and formulating their response to US–China competition more generally. As noted above, among the big European states, only Germany has formally adopted a strategy on China, in 2023 (The Federal Government of Germany 2023). However, China and the response to US–China competition takes a prominent place in France’s Indo-Pacific Strategy and its strategy review (Government of France 2021; Secrétariat général de la défense et de la sécurité nationale 2022), and the UK systematically included the dimension of strategic competition in its Integrated Review and its refresh (Government of the United Kingdom 2021, 2023) and has announced an ‘audit’ of its China policy under the new government (Taylor 2024). While these strategies emphasise their individual approaches towards China and the risks stemming from US–China competition, the US has increasingly pressured Europe to align with its approach (Lynch et al. 2023) and can be expected to continue this pressure (Barkin and Kratz 2025). Through the potential issue linkage of security (openly questioned by President Trump) and China policy, Europe therefore finds itself in a new form of alliance security dilemma. European approaches to US–China competition: strategic hedging How can Europe respond to the alliance dilemma of the risks of abandonment and entrapment when it comes to its approaches to China? Reviewing the theoretical literature on the alliance dilemma, one can imagine different strategies. According to Snyder, members of alliances can choose between strategies that strengthen or weaken their commitment to the alliance. To demonstrate commitment, actions could include reassurances for the ally or demonstrations of loyalty, whereas actions to weaken the commitment to the alliance could consist of restraining the ally (mostly to reduce the risk of entrapment in a conflict), increasing bargaining power over the ally or preserving options for realignment outside the existing alliance (for a full discussion, see Snyder 1984, 466–9). Alternative strategies include hiding from cooperation, that is, ‘seeking to maximize autonomy by opting out of specific aspects of the cooperation or by setting up “bastions” in the cooperation’, or bandwagoning, through which states pursue strategies of adaptation ‘to the more powerful actors in the cooperation’ (Pedersen 2023, 442). At the moment, it seems that France, Germany and the UK ‘drive on sight’ rather than approaching the question holistically. The following analysis aims to unpack how the three European states see US–China competition, the risk of the alliance dilemma and how these reflections have played out so far in their strategies. The strategies of France, Germany and the UK on China demonstrate that their approaches are influenced by a distinctly transatlantic component and reflect the transatlantic alliance dilemma. This is visible in their (1) high awareness of the risks stemming from great power competition, (2) approaches to managing the risk of short-term abandonment, and (3) hedging to mitigate the medium- and long-term risks of abandonment and entrapment. The empirical evidence for this analysis was gathered through a qualitative analysis of European strategic documents, statements and policy decisions taken mostly during the period of the Biden administration. However, in light of the risk of a scaling-up of the alliance dilemma under the Trump administration, sources and evidence accessible by the end of January 2025 were included to illustrate the European approaches. In addition to publicly available documents and the sources mentioned above, this paper draws on conversations with policymakers and experts under the Chatham House rule. Mitigating risks from US–China competition: multilateralism instead of alignment That France, Germany and the UK are close allies with the US is clearly visible in their respective strategies on China, not least because of references they make to the importance of the alliance and their descriptions of their own positions between the two great powers. Overall, France, Germany and the UK share the perception of US–China competition and the emergence of blocs as potentially harmful to their interests. As a consequence, all three call for an inclusive multilateral order instead of falling into a logic of blocs, as the increasing competition is seen as a risk for Europe (Secrétariat général de la défense et de la sécurité nationale 2022, 9–15; The Federal Government of Germany 2020, 24–6; Government of the United Kingdom 2023, 22–6). The response of all three European powers to the emergence of blocs is multilateralism: instead of clearly aligning with the US, the French, German and British strategies call for building broader multilateral coalitions, which should, eventually, also include China (The Federal Government of Germany 2020, 23–6; Government of the United Kingdom 2023). The tone in Paris, Berlin and London towards Beijing has clearly changed over recent years; accordingly, the European capitals were also willing to support strong wording on China in the 2024 NATO summit declaration, which describes China as a ‘critical enabler’ of Russia’s ongoing war against Ukraine (NATO 2024). Albeit also recognised as a critical partner for key issues such as climate policy and trade, European states openly describe China as a ‘systemic rival’ and occasionally call out China’s behaviour, as they did, for example, in the case of a note verbale on the South China Sea (UN 2020). Nevertheless, Europe has not (yet) given in to US pressure to align with Washington’s more confrontational approach towards China (Etienne 2024). Even if European states and Washington have moved closer to each other, especially on economic security (Meyers and Reinsch 2023), the European positions on US–China competition demonstrate that Europeans are not willing to fully endorse or follow Washington’s approach—not least because European imports from China have increased in recent years (Lovely and Yan 2024). Managing the risk of short-term abandonment Since Trump’s election, the risk of abandonment by the US has been seen as increasingly high in Paris, Berlin and London.1 This is not least because Trump has openly questioned his willingness to adhere to Article 5 of the North Atlantic Treaty in the case of an armed attack on Europeans (Sullivan 2024). Europeans are especially concerned about issue linkage in this context, meaning that demands in a policy area other than security could be used as a condition. Concretely, Trump could use the threat of abandonment as leverage to compel Europe to align with the US on China policy.2 Barkin and Kratz (2025) suggest that Europe adopt a ‘carrot and stick’ approach, whereby Europe could start with an offer to the US: buying more liquified natural gas, defence goods and agricultural products from the US could mitigate the risk of abandonment. However, there is awareness among European states that coercion from the US to align on US–China policy, especially when linked to the threat of abandonment, might best be mitigated through enhancing European military capabilities—which would still leave the continent exposed to these threats, though to a lesser extent.3 Addressing the risk of medium- and long-term abandonment and entrapment: transatlantic hedging However, the risk of at least partial abandonment is not a new challenge for European strategy, and had already infused earlier strategic thinking. The shift of US strategic priorities away from Europe and to the Indo-Pacific has already been demonstrated in the allocation of resources to the different theatres. Moreover, European states have increasingly become aware that US forces will be withdrawn from their territories in the future and have concluded that they will have to step up their own commitment to European security (see Grand 2024). In parallel, there is an awareness in European capitals that showing more interest in the Indo-Pacific and giving more importance to policy on China is also a way for Europeans to demonstrate an understanding of their ally’s strategic priorities.4 Accordingly, the approaches of France, Germany and the UK to China and the Indo-Pacific also have to be understood as a commitment to the priorities of the US in order to keep this ally engaged in the European theatre and mitigate the risk of abandonment; however, European states abstain from fully aligning with the US approach, as their capabilities and strategic goals are perceived as diverging from those of the US. In this way, Europe aims to avoid entrapment over the medium term through slightly distancing itself from US policy. While all three European states also call for de-risking from China and diversification of their supply chains, maintaining strong economic ties with Beijing is a key component of their respective approaches—which contrasts with the US calls for decoupling. Furthermore, these states have never formally endorsed the US policy on China (Etienne 2024). Nevertheless, enhancing European capabilities would not only send a signal to Washington, but also qualify as hedging, understood as an ‘insurance policy’ to avoid a deterioration in US–Europe relations if the US opted for abandonment, or even as part of a move towards emancipation to reduce strategic dependencies on Washington (see Fiott 2018, 4–6). Conclusion: a transatlantic China challenge Designing their approaches to China and to US–China competition more broadly constitutes a complex strategic dilemma for European states. Paris, Berlin and London do not fully align with Washington’s approach, and it remains to be seen whether they will be willing to do so under the second Trump administration. To manage the risk of abandonment and entrapment, European states pursue different individual approaches to strategic hedging: their strategies on China and US–China competition are designed in a way that allows them to mitigate the risk of abandonment which might stem from significant transatlantic divergence, and to avoid automatic entrapment through their slight distancing from the US approach. From a theoretical perspective, this article has demonstrated that the alliance dilemma, along with the parallel fear of abandonment and entrapment by the US, is a major factor accounting for Europe’s limited strategies on China and its hedging behaviour. This article offers a conceptual analysis of the structural forces explaining European strategies, but other strategic cultures and relationships with the US could offer important complementary insights. To further analyse how individual European states design their strategies vis-à-vis China in light of the alliance dilemma and potential domestic constraints and specificities, neoclassical realism could offer an interesting analytical concept. This approach posits that structural forces set the parameters for foreign policy and treats domestic factors, including strategic culture, as intervening variables (see Rose 1998). Accordingly, it appears well suited for foreign policy analysis, and has indeed gained popularity in the field in recent years (see, for example, Martill and Sus 2024; Meibauer et al. 2021; Weber 2024). Empirically, this article constitutes a conceptual starting point rather than an exhaustive analysis of the strategy-making processes of European states with regard to China and US–China competition and makes a more comprehensive assessment desirable. The findings of this article have broader implications for policymaking. First, they demonstrate the necessity for Europe to determine its place in the increasing US–China competition. European coordination on the respective approaches vis-à-vis the US—especially in light of potential coercion to align—and China is of paramount importance to ensure that foreign policy strategies are mutually reinforcing and not undermining European objectives. Second, the article demonstrates that Europe currently responds to the ‘transatlantic China challenge’ through transatlantic hedging: while this strategy seems to be promising in the short term, it is questionable to what extent the strategy is sustainable and could help European states to navigate the parallel challenges of abandonment and entrapment. Unless Europe decides to fully align with the US—and it is questionable whether this decision would be in its interest—European states would be well advised to develop a sustainable long-term approach to China. A transatlantic dialogue on China, in which Europe and the US openly discuss synergies and divergences, could help prevent misunderstandings and decrease the risk of coercion or issue linkage due to a misreading of European approaches in Washington. Third, as the risks of (at least partial) abandonment and entrapment are systemic challenges due to the current composition of the transatlantic alliance, a logical step for European states to decrease their dependence on the US as the hegemon in the alliance would be to significantly strengthen European capabilities. Stronger military capabilities could help mitigate the ramifications of abandonment, and the aforementioned distinctly European strategy could allow Europe to avoid strategic entrapment in relation to China imposed by Washington. As Europe remains the junior partner in the transatlantic alliance, the parallel risks of abandonment and entrapment, as well as issue linkage, are highly likely to influence its approaches towards China in the long term, but there are certainly ways to render this ‘transatlantic China challenge’ less challenging. ORCID iDGesine Weber https://orcid.org/0009-0008-2643-0400Footnotes1. Conversation with French, German and British experts in Berlin, January 2025.2. Conversation with French, German and British experts in Berlin, January 2025.3. Conversation with French, German and British experts in Berlin, January 2025; conversation with European experts and officials in Paris, January 2025.4. Conversation with officials from Germany and France in Paris, November 2024; conversation with French, German and British experts in Berlin, January 2025.ReferencesBarkin N., Kratz A. (2025). Trump and the Europe–US–China Triangle. Rhodium Group, 16 January. https://rhg.com/research/trump-and-the-europe-us-china-triangle/. Accessed 18 January 2025.Demarais A. (2024). Divided we stand: The EU votes on Chinese electric vehicle tariffs. European Council on Foreign Relations, 9 October. https://ecfr.eu/article/divided-we-stand-the-eu-votes-on-chinese-electric-vehicle-tariffs/. Accessed 25 January 2025.Etienne P. (2024). 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Abstract This analysis examines Ukraine’s integration into European defence cooperation through the SAFE fund, highlighting its unique status as a semi-integrated security partner (SISP) despite not being an EU member. Ukraine’s pursuit of NATO and EU membership is driven by security concerns, economic benefits, and cultural alignment with Europe, particularly in response to Russian aggression since 2014. NATO membership promises collective defence under Article 5, enhanced military capabilities, and political reforms, while EU accession offers economic integration, governance improvements, and strengthened defence capacities. Russia opposes Ukraine’s NATO aspirations due to security fears and the potential democratic contagion threatening its regime. Still, it is more accepting of Ukraine’s EU membership, viewing it as an economic rather than a military alliance. Historical assurances to the USSR against NATO expansion eastward fueled Russia’s objections. Ukraine’s integration into European structures symbolises a break from Russian influence but poses challenges of escalation and geopolitical tension. The SAFE fund’s inclusion of Ukraine reflects the evolving boundaries of EU defence cooperation amid the ongoing conflict. Key Words: SAFE, EU, Ukraine, Russia, Security Introduction In the first article on SAFE[EE1] , published once again in the World & New World Journal, the analysis concluded on a somewhat skeptical note: “It appears that despite some initial intentions to end the Ukrainian war as early as April 2022, it is the European elites, especially French, German and Polish, who stand for the prolongation, if not escalation, of the Ukrainian war, potentially at the expense of the security of the whole European continent and definitely at the expense of Ukrainians and their country”.[1] Moreover, the author, adopting a critical perspective, raised some questions about the consequences of the ongoing war. Firstly, the longer the war continues, the more destroyed Ukraine becomes and the greater the number of Ukrainians killed. Secondly, the longer the war continues, the greater the likelihood of escalation, which poses a threat to the entire European continent. Thirdly, despite mainstream media reports, the Russian Federation appears to have adapted to operating effectively despite the sanctions, which may strengthen its economy in the short to medium term and, more importantly, bring it closer to cooperating with China and North Korea. Finally, since every war serves as a testing ground for new technologies, the Russians, especially the North Koreans and the Chinese, are gaining invaluable insight into the nature of modern warfare, which is often referred to as the next Revolution in Military Affairs (RMA).The inclusion of Ukraine in the SAFE fund, despite its non-EU status, suggests a functional military alliance. This analysis will, therefore, explore how such an alliance redefines the line between EU and non-EU defence cooperation, specifically in the context of Ukraine as a semi-integrated security partner (SISP), and how this semi-integration is likely to influence Russia’s threat perception.  European Aspirations of Ukraine  Source: https://www.freeworldmaps.net/europe/political.html Ukraine’s pursuit of NATO and EU membership reflects a complex approach driven by security, economic, political, and cultural imperatives, particularly in the context of its ongoing conflict with Russia and its aspiration for a stable and prosperous future. Ukraine’s engagement with NATO began in the early 1990s, with formal steps toward membership marked by the 2008 Bucharest Summit, which decided that Ukraine would become a member.[2] This commitment was reaffirmed at the 2024 Washington Summit, emphasising Ukraine’s “irreversible path” to NATO integration. For the EU, Ukraine applied for membership on February 28, 2022, shortly after Russia’s full-scale invasion, highlighting the urgency driven by security concerns.[3]  The EU granted candidate status in June 2022, and accession negotiations opened in December 2023, reflecting strong political support. The primary rationale for NATO membership is security, particularly in response to Russia’s actions since 2014, including the annexation of Crimea and the 2022 invasion. Ukraine views NATO’s collective defence mechanism, especially Article 5, as a credible deterrent to further aggression. NATO has provided significant support, including EUR 50 billion in 2024, with nearly 60% of the funding coming from European Allies and Canada. The alliance has also established NATO Security Assistance and Training for Ukraine (NSATU) at the 2024 Washington Summit.[4] EU membership, although not primarily a military-focused endeavour, enhances political stability by reducing vulnerability to external threats through economic and diplomatic ties. Recent developments in June 2025, such as NATO Defence Ministers agreeing on new capability targets and statements from Baltic states calling for concrete steps at the upcoming 2025 NATO Summit in The Hague, underscore ongoing international backing.[5] However, challenges remain, with some ambiguity about explicit mentions in NATO communiques and concerns over U.S. political shifts, as noted by Estonian President Alar Karis on June 9, 2025.[6] EU membership is central to Ukraine’s economic aspirations, offering access to the European single market, financial aid, and investment crucial for post-war reconstruction. The EU has provided over €108 billion in financial, humanitarian, and military assistance since the war began, with the Ukraine Facility offering up to €50 billion from 2024 to 2027 for recovery and reforms.[7]  This support aligns with Ukraine’s goal of modernising its economy and institutions, including democratic governance and anti-corruption measures, as outlined in the EU’s 2022 Opinion and subsequent reports. NATO membership, while primarily security-focused, also implies a political alignment with Western democratic values, complementing European Union integration. Ukraine’s progress in aligning with NATO standards, as demonstrated by the removal of the need for a Membership Action Plan (MAP) at the 2023 Vilnius Summit, reflects its commitment to reforms that enhance both security and political stability.[8] Ukraine frames its European aspirations as a return to its historical and cultural roots, emphasising shared democratic values, human rights, and a rejection of Russian influence. This narrative is reflected in strong public support, with polls showing over 80% favouring NATO membership and 85-90% supporting EU membership.[9] The 2014 Euromaidan protests, sparked by the rejection of an EU Association Agreement and Russia’s subsequent actions, have solidified this national consensus. Constitutional amendments in 2019 formalised NATO and EU membership as strategic objectives, underscoring cultural alignment with Europe. To sum up, both NATO and EU memberships, according to Ukrainian society, represent a definitive break from Russia’s sphere of influence, ensuring long-term independence and countering Russian attempts to control post-Soviet states. This geopolitical strategy is evident in Ukraine’s legislative commitments, such as the 2017 parliamentary decision making NATO membership a strategic objective and the 2022 reiteration of membership requests following Russia’s illegal annexations.  Recent EU-NATO cooperation, highlighted in a May 28, 2025, meeting focusing on Ukraine, reinforces this alignment and highlights international solidarity.[10] Russian views on Ukraine’s NATO and EU membership Russia's objections to Ukraine joining NATO are driven by security, geopolitical, and ideological fears, with a particular emphasis on military alliances and democratic contagion. In contrast, Russia accepts Ukraine's EU membership, viewing it as an economic union with fewer security implications. Russia views NATO's eastward expansion as a direct threat to its national security. The potential inclusion of Ukraine would bring NATO's military infrastructure, including troops and missile defence systems, closer to Russian borders. This is seen as a violation of Russia's perceived security interests, especially given NATO's history of collective defence under Article 5. For instance, NATO's response to Russia's 2014 annexation of Crimea and the 2022 full-scale invasion has intensified cooperation with Ukraine, further heightening tensions. [11] Ukraine's historical ties to Russia, rooted in shared Soviet and imperial pasts, make its potential NATO membership a significant loss for Russia's sphere of influence. The shift toward Western alignment is perceived as a strategic defeat, as it reduces Russia's ability to exert influence in Eastern Europe. This is evident in Russia's actions, such as the annexation of Crimea and support for separatists in Donbas, which are seen as responses to Ukraine's NATO aspirations.[12] Russia specifically objects to the military aspects of NATO membership, fearing the deployment of foreign troops or advanced military systems near its borders. This concern is highlighted in statements from Kremlin officials, such as Dmitry Peskov, Press Secretary of the President of the Russian Federation, who have emphasised that military alliances pose a different threat compared to economic unions. [13] Western experts often claim that Russia's real objection is the democratic implications of Ukraine's alignment with the West. A successful, democratic Ukraine could serve as a model for democratic movements within Russia, challenging the authoritarian stability of Putin's regime. This fear is evident in Russia's reactions to democratic breakthroughs, such as the Orange Revolution (2004) and EuroMaidan (2013–14), which were met with military actions like annexing Crimea and supporting separatist conflicts in Donbas, resulting in over 14,000 deaths over eight years.[14] NATO Expansion: What Gorbachev Heard Russia often cites the alleged promise made during the fall of the Soviet Union that NATO would not expand eastward. This grievance is part of Russia's broader narrative of being encircled by Western institutions, fueling its opposition to Ukraine's NATO aspirations.  According to recently publicised documents, Western leaders gave Mikhail Gorbachev multiple assurances throughout 1990 and into 1991 that NATO would not expand eastward, particularly in the context of German unification and the broader European security architecture.[15] James Baker, U.S. Secretary of State, repeatedly assured Gorbachev in February 1990 that if Germany were to unify and remain in NATO, NATO's jurisdiction would not extend "one inch eastward" beyond its current position. Baker presented Gorbachev with a choice between a united Germany outside NATO or a united Germany in NATO with guarantees against eastward expansion. Gorbachev stated that any expansion of NATO would be unacceptable. West German Foreign Minister Hans-Dietrich Genscher publicly stated in January 1990 that NATO should rule out expansion eastward and proposed a special status for the former East German territory within NATO. This "Tutzing formula" became the basis of diplomatic discussions with Gorbachev, where the idea of no eastward expansion applied not only to East Germany but also to other Eastern European countries. British Foreign Minister Douglas Hurd and Prime Minister John Major also conveyed to Gorbachev and other Soviet officials that NATO expansion was not being considered and that there was no plan to include Eastern European countries in NATO at that time. Major personally assured Gorbachev in March 1991 that strengthening or expansion of NATO was not planned. French President François Mitterrand expressed support for gradually dismantling military blocs and emphasised the need to create security conditions favourable to the Soviet Union. He promised to detail guarantees to Gorbachev regarding his country's security. Margaret Thatcher emphasised the transformation of NATO into a less militarily threatening alliance and the role of the Conference on Security and Cooperation in Europe (CSCE) as an inclusive forum that would incorporate the Soviet Union into discussions about Europe's future security. She stressed the importance of giving the Soviet Union confidence that its security would be assured. NATO Secretary General Manfred Woerner told a Russian delegation in 1991 that the NATO Council and most member states were against NATO expansion and that isolating the USSR from the European community should be avoided. President George H.W. Bush assured Gorbachev on several occasions, including at the Malta summit in 1989 and the Washington summit in 1990, that the U.S. sought no unilateral advantage and that German unification within NATO would not be directed against the Soviet Union. He emphasised the significance of the CSCE process and the transformation of NATO in response to Soviet security concerns. Overall, these assurances created a "cascade" of promises emphasising that NATO would not expand eastward and that Soviet security interests would be respected as part of a new European security architecture. Gorbachev agreed to German unification in NATO based on these assurances and his belief in the potential for a "common European home" that would include the USSR. However, these assurances were mainly given in verbal form or memos rather than formal treaties, and subsequent NATO expansion in the late 1990s led to later Soviet and Russian complaints about being misled. In summary, the significance of these promises lies in their role in enabling German unification within NATO, shaping Soviet expectations of post-Cold War security, influencing European security architecture, and later contributing to disputes over NATO enlargement and Russia's perception of being misled by the West. EU Membership: A More Accepting Stance In contrast, Russia's stance on Ukraine's potential membership in the EU is markedly different. Official statements, such as those from Vladimir Putin, indicate that Russia has "nothing against" Ukraine joining the EU, viewing it as an economic union rather than a military alliance.  This acceptance is likely due to the EU's focus on economic integration, which does not pose the same security threat as NATO's military framework.[16] Dmitry Peskov's comments reinforce this distinction, noting that Russia "won't dictate" its approach to EU membership but has a different approach to military alliances. This reflects Russia's willingness to engage in economic partnerships while opposing military alliances. While Russia accepts EU membership, it remains wary of the broader implications, such as increased Western influence and potential democratic reforms in Ukraine. However, these concerns are secondary to its objections to NATO, as the EU does not involve military commitments. Public opinion in Ukraine, as noted in sociological surveys, shows strong support for NATO membership, with 64% in favour in January 2022, particularly in western Ukraine and Kyiv. This contrasts with Russia's position, highlighting the geopolitical divide. Additionally, former European Commission President Jean-Claude Juncker has cautioned against Ukraine joining NATO, suggesting that internal debates within the West may align with Russia's narrative that NATO expansion is premature. Ukraine - de facto NATO and EU member? – opportunities and challenges NATO Experts claim that Ukraine's membership in NATO would likely provide a strong security guarantee under Article 5, deterring Russian aggression by ensuring collective defence. This means that an attack on Ukraine would be treated as an attack on all NATO members, including major powers such as the United States and the United Kingdom. This could potentially stabilise the region, reducing the risk of further conflict.[17] Ukraine's large and experienced military, with significant combat expertise, would also strengthen NATO's overall defence capabilities, particularly in modern warfare, such as drone and cyber operations. Membership in NATO would likely enhance Ukraine's military capabilities through the organisation's training programs and exercises, thereby improving interoperability with allied forces. Programs like the NATO Security Assistance and Training for Ukraine (NSATU), established in 2024, coordinate equipment and training with hubs in Eastern Europe. This would align Ukraine's forces with NATO standards, enhancing operational effectiveness, as demonstrated by past contributions to NATO-led missions in Bosnia and Kosovo.[18] It seems likely that NATO membership would attract more foreign investment, especially in defence, with Western companies already coproducing munitions in Ukraine. Financial support, such as the €40 billion pledged in 2024, would aid reconstruction and economic recovery, as outlined in the NATO Pledge of Long-Term Security Assistance. Politically, it could drive reforms in governance and anti-corruption, with strong public support (75% in favour) ensuring commitment.[19] Finally, policy-makers in the West also hope that Ukraine’s NATO membership could curb or even end Russian imperial ambitions, sending a clear message that the subjugation of Ukraine is futile. However, it could also escalate tensions with Russia. “While there is widespread recognition that the outcome of Russia’s war in Ukraine will shape the future of international relations, […] the alliance appears to be deeply divided on the issue. Objections centre around the potential for a further dangerous escalation in the current confrontation with the Kremlin. Opponents argue that by inviting Ukraine to join, NATO could soon find itself at war with Russia. Meanwhile, many supporters of Ukrainian NATO membership believe keeping the country in geopolitical limbo is a mistake that only serves to embolden Moscow and prolong the war”. [20] The EU The alleged opportunities resulting from Ukraine’s already de facto EU membership are numerous. According to experts, Ukraine's potential EU membership would likely enhance economic integration by granting access to the EU's single market, facilitating the free movement of goods, services, capital, and people. This could increase Ukraine's trade by 40% to 140% between 2030 and 2040, compared to the 2010-2019 averages, driven by foreign direct investment (FDI) and governance reforms.[21] The Deep and Comprehensive Free Trade Area (DCFTA), which has been in force since 2017, would be further strengthened, thereby boosting economic ties with the EU.[22] The EU-Ukraine agreement improves the competitiveness of European businesses in the Ukrainian market and vice versa. Overall, for trade in goods, the agreement eliminated the majority of tariffs – 98.1% for the EU and 99.1% for Ukraine. For example, import duties on most agricultural goods imported into the EU were reduced to zero in 2016. Tariff rate quotas apply to the remaining farming goods that are not liberalised. The management of these quotas is done either on a first-come, first-served basis or via import licences. It seems likely that EU accession would drive reforms in governance, rule of law, and anti-corruption measures. Currently, Ukraine ranks poorly in governance metrics, performing worse than Russia and Belarus; however, EU conditionality could help elevate it to a well-governed state.  With 78% of Ukrainians supporting EU entry, there is strong public backing for these reforms.[23] Ukraine's membership is also likely to enhance EU security and defence capabilities. Ukraine's rapidly growing defence industry, including investments like Baykar's $100 million for drone production and a joint venture with Rheinmetall for artillery shells, would bolster the EU's defence ecosystem.[24]  With one of Europe's largest standing armies (around 1 million personnel) experienced in modern warfare, Ukraine could contribute valuable expertise.  The establishment of an EU Defence Innovation office in Kyiv further supports Ukraine's integration into European defence programs. There may be additional benefits in energy security, with Ukraine exporting low-carbon electricity and hydrogen to the EU, and technological advancements, particularly in drone and cyber capabilities, positioning Ukraine as a leader in tech R&D. Labour migration could help alleviate EU labour shortages, with projections of 3-6 million additional Ukrainian immigrants by 2029-2050. Conclusion In conclusion, Ukraine’s integration into European defence cooperation, particularly through NATO and the EU, represents a strategic shift that may strengthen European security and counter Russian influence. NATO membership offers Ukraine vital collective defence guarantees, enhances military capabilities, and could deter further Russian aggression, though it risks escalating tensions.  EU membership promises significant economic benefits, governance reforms, and deeper political alignment with Europe. Russia’s opposition centres mainly on NATO’s military threat, while it shows more acceptance of EU economic ties. Overall, Ukraine’s semi-integrated status in European defence frameworks exemplifies evolving security dynamics with profound implications for the regional security complex in Europe. References [1]  Sliwinski, K. (2025, July 7). Can SAFE make Europe safe? From civilian to military power Europe. World & New World Journal. https://worldandnewworld.com/safe-europe-military-power-3/[2] Relations with Ukraine. (2025, March 11). North Atlantic Treaty Organization. https://www.nato.int/cps/en/natohq/topics_37750.htm[3] Ukraine. European Commission. https://enlargement.ec.europa.eu/european-neighbourhood-policy/countries-region/ukraine_en[4]  Relations with Ukraine. (2025, March 11). North Atlantic Treaty Organization. https://www.nato.int/cps/en/natohq/topics_37750.htm[5] NATO Defence Ministers agree new capability targets to strengthen the Alliance. (2025, June 5). North Atlantic Treaty Organization. https://www.nato.int/cps/en/natohq/news_235900.htm[6] Estonian president: Ukraine’s NATO membership still possible despite Trump. (2025, June 9). European Pravda. https://www.eurointegration.com.ua/eng/news/2025/06/9/7213345/[7] Ukraine. European Commission. https://enlargement.ec.europa.eu/european-neighbourhood-policy/countries-region/ukraine_en [8] Vilnius Summit Communiqué. (2023, July 11). North Atlantic Treaty Organization. https://www.nato.int/cps/en/natohq/official_texts_217320.htm[9] Imagine that a referendum on Ukraine’s accession to the European Union (EU) is currently taking place. How would you vote? (2024, October 8). Statista. Https://Www.Statista.Com/Statistics/1284801/Ukraine-Opinion-on-Eu-Accession/. https://www.nato.int/cps/en/natohq/official_texts_217320.htm Also: Are you for or against Ukraine joining the North Atlantic Treaty Organization (NATO)? (2025, January 6). Statista. https://www.statista.com/statistics/1294468/public-opinion-on-ukraine-joining-nato/[10] NATO and the European Union unite for Ukraine at a NAC - PSC meeting. (2025, May 28). North Atlantic Treaty Organization. https://www.nato.int/cps/en/natohq/news_235693.htm[11] NATO’s response to Russia’s invasion of Ukraine. (2025, February 17). North Atlantic Treaty Organization. https://www.nato.int/cps/en/natohq/topics_192648.htm[12] Person, R., & McFaul, M. (2022). What Putin Fears Most. Journal of Democracy, 33(2), 18–27. https://www.journalofdemocracy.org/articles/what-putin-fears-most/[13] Körömi, C. (2025, February 18). Russia: Ukraine has a ‘sovereign right’ to join EU — but not NATO. POLITICO. https://www.politico.eu/article/dmitrt-peskov-kremlin-ukraine-sovereign-right-join-eu-not-nato/[14] Person, R., & McFaul, M. (2022). What Putin Fears Most. Journal of Democracy, 33(2), 18–27. https://www.journalofdemocracy.org/articles/what-putin-fears-most/[15] National Security Archive. (2017, December 12). NATO expansion: What Gorbachev heard. The George Washington University. https://nsarchive.gwu.edu/briefing-book/russia-programs/2017-12-12/nato-expansion-what-gorbachev-heard-western-leaders-early[16] Putin says Russia has “nothing against” Ukraine joining EU. (2022, June 17). REUTERS. https://www.reuters.com/article/world/putin-says-russia-has-nothing-against-ukraine-joining-eu-idUSKBN2NY0NK/[17]  Relations with Ukraine. (2025, March 11). North Atlantic Treaty Organization. https://www.nato.int/cps/en/natohq/topics_37750.htm[18] Sendak, C., & Timtchenko, I. (2025, January 16). Between Now and NATO: A Security Strategy for Ukraine. Center for European Policy Analysis (CEPA). https://cepa.org/comprehensive-reports/between-now-and-nato-a-security-strategy-for-ukraine/[19] Relations with Ukraine. (2025, March 11). North Atlantic Treaty Organization. https://www.nato.int/cps/en/natohq/topics_37750.htm  [20] Grod, P. (2024, July 11). Five reasons why Ukraine should be invited to join NATO. North Atlantic Treaty Organization. https://www.atlanticcouncil.org/blogs/ukrainealert/five-reasons-why-ukraine-should-be-invited-to-join-nato/[21] Darvas, Z., Dabrowski, M., Grabbe, H., Léry, L., Moffat, A., Sapir, G., & Zachmann, G. (2024, March 7). Ukraine’s path to European Union membership and its long-term implications. Bruegel. https://www.bruegel.org/policy-brief/ukraines-path-european-union-membership-and-its-long-term-implications[22] EU-Ukraine Deep and Comprehensive Free Trade Area. (2024, March 7). European Commission. https://trade.ec.europa.eu/access-to-markets/en/content/eu-ukraine-deep-and-comprehensive-free-trade-area[23] Darvas, Z., Dabrowski, M., Grabbe, H., Léry, L., Moffat, A., Sapir, G., & Zachmann, G. (2024, March 7). Ukraine’s path to European Union membership and its long-term implications. Bruegel. https://www.bruegel.org/policy-brief/ukraines-path-european-union-membership-and-its-long-term-implications [24] Khachatryan, A. et.al. (2024, June 19). The Benefits and Opportunities of Ukraine’s EU Accession. Tony Blair Institute for Global Change. https://institute.global/insights/geopolitics-and-security/the-benefits-and-opportunities-of-ukraines-eu-accession

In recent years, US leadership has embraced techno-nationalism amid geopolitical and technological rivalry with China, aiming to minimise reliance on imported chips from Asia. These components are crucial for producing consumer goods, military hardware, and AI systems. The United States set the ambitious goal of developing a self-sufficient semiconductor supply chain during Donald Trump’s first term, and continued under Joe Biden. There is consensus in the United States on the critical role of unfettered access to chips when it comes to ensuring economic and national security. It is unlikely that this technological policy dynamic will undergo significant shifts in the foreseeable future. Despite a shared objective among both Republicans and Democrats to revive the US semiconductor industry, their approaches diverge significantly. Donald Trump has his own vision for advancing this sector, one that contrasts sharply with Joe Biden’s strategy. For instance, Trump has criticised aspects of Biden-era initiatives, including the 2022 CHIPS and Science Act, which he has called counterproductive. Trump, on the other hand, favours a more aggressive tariff policy and a reduction in federal spending, arguing that major tech companies can do well without additional government support. The future balance of power—both technological and geopolitical—among the key global actors will be shaped by the development trajectory of the US semiconductor industry. Biden’s semiconductor legacy The United States holds a dominant position in chip design, but maintains a relatively modest share in global semiconductor manufacturing—just 10 percent according to SIA data in 2022, and slightly up to 11 percent according to 2025 data provided by TrendForce research firm. Major US tech giants like Nvidia or Qualcomm remain heavily reliant on chips produced in Taiwan. This dependency has increasingly been seen as unacceptable by US leadership, especially in the context of the ongoing tech war with China. Washington now views such reliance as a significant national security risk. During Donald Trump’s first presidential term, the decision was made to attract leading chip manufacturers—most notably Taiwan Semiconductor Manufacturing Company (TSMC), the world’s largest contract chipmaker—to set up operations in the United States. This initiative proved successful: in 2020, TSMC agreed to invest $12 billion to build a chip fabrication plant in Arizona (Fab 21).   The Biden administration continued Trump’s push to revitalise the semiconductor industry. In August 2022, the CHIPS and Science Act was passed, allocating about $53 billion in government subsidies for the semiconductor sector, along with tax incentives to encourage both foreign and domestic firms to establish chip manufacturing operations on US soil. Additionally, the CHIPS for America programme was introduced to address several key goals, namely, to secure a stable supply chain for both cutting-edge and legacy semiconductors, to reinforce US leadership in R&D, and to boost employment, as investment in the chip industry was expected to generate hundreds of thousands of new jobs in microelectronics-related fields. Biden’s programme has borne fruit. Major chipmakers have launched large-scale construction of fabs across the United States. In 2022, Intel started building a $28 billion facility in Ohio; Samsung initiated two plants in Texas worth about $40 billion; and TSMC decided to expand its Arizona site to three modules, increasing its total investment from $12 billion to $65 billion. According to TSMC CEO C.C. Wei, the Arizona facility began mass production in the fourth quarter of 2024 using its N4 (4nm class) process technology, with performance comparable to its fabs in Taiwan. This marks the most advanced semiconductor production facility currently operating in the United States. Plans are in place to launch a second module for 3nm chip production by 2028, followed by a third module by 2030, which will manufacture 2nm and 1.6nm chips and their variants. The Biden team aimed for the United States to capture 20 percent of global advanced chip manufacturing by 2030. Democrats have adopted a comprehensive approach to rebuilding the semiconductor industry not just focusing on building advanced fabs, but also investing in support areas such as chip testing and packaging, materials production, and R&D. A substantial $13 billion in federal funds has been earmarked for these purposes. For instance, grants and loans were used to support GlobalFoundries’ plans to build an advanced packaging and photonics centre in New York State. Arizona State University also received significant support from the US Department of Commerce, including a $100 million allocation for research and development in next-generation chip packaging technologies. Wide geographic distribution is a striking feature of the emerging US semiconductor supply chain (Figure 1). Key activities are being established across numerous states: Oregon (semiconductor manufacturing), Idaho (semiconductor and material manufacturing), Utah (semiconductor manufacturing), Montana (equipment manufacturing), Colorado (semiconductor and material manufacturing), New Mexico (packaging), Kansas (semiconductor manufacturing and packaging), Louisiana (equipment manufacturing), Missouri (materials), Minnesota (semiconductor manufacturing),Michigan (materials),Indiana (packaging and semiconductor manufacturing), Ohio (materials and semiconductor manufacturing), Vermont (semiconductor R&D and manufacturing), Pennsylvania (materials), North Carolina (semiconductor manufacturing), Georgia (materials and semiconductor manufacturing), and Florida (materials and semiconductor manufacturing). Among these, several states stand out for their significance and comprehensive involvement: California (semiconductor manufacturing and R&D), Arizona (semiconductor, equipment, and material manufacturing, packaging, R&D), Texas (semiconductor and material manufacturing, packaging, R&D), and New York (materials, semiconductor manufacturing, and R&D).   According to a 2024 study by the Boston Consulting Group commissioned by the Semiconductor Industry Association (SIA), over 90 projects have been launched in 28 states since the CHIPS Act was passed, totalling nearly $450 billion in private investment. However, the Biden administration did not pursue full semiconductor self-sufficiency as a goal. There was recognition that recreating the entire supply chain domestically would, even at the initial stage, require a vast amount of time and financial resourcesНадпись: MichiganНадпись: IndianaНадпись: Pennsylvania estimated at around $1 trillion. Therefore, US policymakers have advocated for a collective semiconductor supply chain among allies and partners by building international alliances. In 2022, the Unite States proposed creating the CHIP 4 alliance (United States, South Korea, Japan, and Taiwan), which, with coordinated efforts, could have become a dominant force in the semiconductor industry capable of influencing nearly every segment of the global value chain, with the exception of assembly and testing, where mainland China currently plays a leading role. In this way, Trump’s initiative to revive the semiconductor industry has not only continued under Biden, but evolved into a more ambitious and costly programme. The SIA, in its above report, painted an optimistic picture for the future of the US semiconductor sector. It projects that chip manufacturing capacity in the United States will triple over the next decade (2022–2032), growing by 203 percent. This expansion is expected to require $646 billion in investment, or 28 percent of global capital spending in the semiconductor industry. As a result, the United States could increase its share of global chip production from the current 10 percent to 14 percent by 2032. Additionally, experts estimate that the new projects will create over 58,000 new jobs in the semiconductor sector and hundreds of thousands more in related industries.   Despite its ambitious nature, the initial phase of Biden’s semiconductor programme has revealed several challenges. The industry has run into numerous internal obstacles slowing the construction of manufacturing facilities, including a shortage of skilled labour, high labour and construction material costs, bureaucratic hurdles (e.g., obtaining environmental permits), slow disbursement of promised subsidies by the US authorities, union-related delays, cultural differences, and more. These issues have caused delays in launching chip fabrication plants, thereby slowing the pace at which the US can achieve relative technological autonomy in the rapidly evolving semiconductor field. For example, TSMC postponed the start of mass production at the first module of Fab 21 from 2024 to 2025, and delayed the second module from 2026 to 2027–2028. Intel’s costly attempt to reclaim leadership in advanced chip manufacturing has strained its budget, forcing the company to delay its Ohio fab launch from 2025 to 2030. Samsung, initially planning to start production in Texas in the second half of 2024, pushed the timeline to 2025. These delays in fab construction also impacted the schedules of launching supplier plants, including chemical and material producers like LCY Chemical, Solvay, Chang Chun Group, KPPC Advanced Chemicals (Kanto-PPC), and Topco Scientific. The external component of the Biden administration’s technology policy has also failed to develop as envisioned. After several years of existence, the CHIP 4 has failed to become a multilateral coordination mechanism, and its potential members have not assumed any binding commitments. Only one virtual meeting was held in 2023. The reason lies in internal disagreements within the alliance and concerns about various risks, including geopolitical ones. Under the Biden administration, the United States made a strong start in the semiconductor sector, launching a wide range of fab construction projects and attracting billions of dollars in public and private investment. However, the process of reviving the US semiconductor industry has proven slower than anticipated. Government subsidies have been disbursed sluggishly, with some companies yet to receive their funding, and the construction of many high-tech industrial facilities has been postponed. Moreover, Biden overestimated the willingness of US allies and partners to join formal technological alliances. Trump’s radical approach To encourage both domestic and foreign chip suppliers to set up manufacturing in the United States, Donald Trump, in contrast to Joe Biden, chose coercion (tariffs) over incentives (government subsidies). Criticising his predecessor’s CHIPS Act, Trump argued that companies didn’t need money, but rather motivation in the form of import tariffs ranging from 25 percent to 100 percent. In his view, such measures would compel businesses to invest in US chip manufacturing, especially since these companies have the financial capacity and, therefore, don’t need to rely on government funding. Almost immediately after taking office, Trump threatened chip manufacturers with higher tariffs. At first glance, this move might seem economically illogical. Why, for instance, punish TSMC—a key partner of major US fabless companies like Nvidia, Apple, and Qualcomm—especially when there is no comparable alternative, either in the United States or globally? Even Intel, despite its struggles, depends on wafers from the Taiwanese firm (its import dependency is about 30 percent). Yet despite apparent lack of logic, the “stick” approach proved effective. In early March 2025, TSMC announced plans to invest approximately $100 billion to build three new fabs for high-performance semiconductor wafers, two advanced chip packaging plants, and one R&D centre. This raises the question: did the world’s largest chipmaker really get spooked by Trump’s tariff threats and, therefore, decide to make an unprecedented investment in the US economy? In theory, TSMC—sitting in the centre of the global microelectronics industry—could have passed tariff-related costs on to its American clients, who would have had little choice but to continue purchasing its products due to the lack of viable alternatives. Furthermore, a significant share of TSMC’s semiconductors is not shipped directly to the United States, but instead follows a supply chain tour through Asia, where the bulk of chip packaging, testing, and electronics assembly occurs (this infrastructure is only just beginning to take shape in the United States, and that process is anything but fast). Analysts at Bernstein suggest that political pressure, rather than tariffs themselves, drove TSMC’s decision. That assessment holds some merit, but it appears that a combination of factors was at play. First, TSMC itself is interested in expanding its global presence. Taiwan’s Minister of Economic Affairs Kuo Jyh-Huei commented on TSMC’s $100 billion investment in the US semiconductor sector by saying, “TSMC already has plants in the United States and Japan, and is now building a new one in Germany. This has nothing to do with tariffs. TSMC’s global expansion is a major development.” Similarly, in 2020 during Trump’s first term, company representatives said that the decision to build a plant in Arizona was “based on business needs.” Indeed, the move offers several benefits to TSMC, including increased company capitalisation and minimised risks in the event of conflict with mainland China or natural disasters (earthquakes are not uncommon in Taiwan). Second, the United States remains TSMC’s primary market, and the tariff threat did play its part. In Taiwan, there’s an understanding that when Trump talks about higher tariffs, he isn’t bluffing, because his seriousness was evident during his first term and was experienced first-hand by Canada and Mexico. On April 2, 2025, nearly the entire rest of the world—including Taiwan—faced a new wave of tariffs, with Taiwanese exports to the United States hit by a 32 percent duty (though semiconductors were not yet affected). A 100-percent tariff on semiconductors is unlikely, as it would significantly damage the market value of US tech firms. Still, protective barriers on semiconductors are expected—Trump’s administration has promised to implement them in the coming months. These measures aim to level the production cost of chips between the United States and Taiwan, thereby enhancing the competitiveness of US-made semiconductors. And finally, TSMC, together with the Taiwanese authorities, is not willing to mar relations with the United States for political reasons. This became evident from TSMC’s earlier decision to support US sanctions against mainland China by refusing to supply its most advanced chips manufactured using 7nm and more sophisticated process technologies even though that market had been a significant source of profit. After TSMC announced plans to expand its presence in the United States, the Trump administration decided to take more radical action and to scrap the CHIPS and Science Act, a signature achievement of the Biden administration. However, some Republican members of Congress are calling for the law to be preserved, albeit with certain amendments. Trump’s hands are not completely untied in this regard, so it is unlikely he can ignore Congress’s position. Even if the legislation gets amended, the process will likely be drawn out, as the CHIPS and Science Act received bipartisan support and has many supporters among Republicans. Another strategically important issue for the Trump administration is the competitiveness of domestic manufacturers. According to the Taiwanese leadership, TSMC will continue to expand operations in Taiwan, and the most advanced semiconductor technologies will not leave the country. For “the most powerful AI chips in the world to be made right here in America” efforts will be needed on the part of national champions—and soon. In 2025, the leader in producing the most advanced 2nm chips will be determined. The main contenders in this race are TSMC, Samsung, and Intel. Intel, however, finds itself in a difficult position. The company has been facing serious financial troubles for several years and lags behind competitors in mastering cutting-edge production processes. The year 2024 was one of Intel’s most challenging: it underwent a major restructuring (creating a separate chip manufacturing unit, Intel Foundry), posted record losses of $18 billion, and saw a significant drop in its stock price. As a result, about 15 percent of the workforce, including CEO Pat Gelsinger, was laid off; dividend payments were suspended; and a sweeping cost-cutting plan was launched, including deep cuts in capital expenditures over the coming years and a scaling back of global expansion plans. According to Intel Products CEO Michelle Johnston Holthaus, the company failed to capitalise effectively on the artificial intelligence boom and continues to fall behind its competitors technologically. Although Intel plans to begin 18A (2nm) chip production in 2025, there are no guarantees of competitiveness in power efficiency, performance, yield rate, cost, or timely mass production. In March, media reported that Nvidia and Broadcom began testing certain chip components, but such testing, of course, does not guarantee Intel will secure orders. Apparently, the Trump administration itself has doubts about the US company’s capabilities, as it has proposed that TSMC acquire shares in Intel Foundry. Negotiations with the Asian manufacturer began only in February 2025, meaning they are still at a very early stage.   What short-term challenges does the Trump administration face in revitalising the US semiconductor industry? Technological lag There is a high likelihood that the United States will continue to lag behind Taiwan for several years in the production of advanced semiconductors. TSMC plans to begin producing chips using a 1.4nm process by 2028, while on US soil—if deadlines aren’t pushed back again—the Taiwanese firm will only be producing 3nm chips by that time. Although some hope is being placed on Intel, there is no guarantee that the American champion will be able to compete with TSMC, or that a potential collaboration with TSMC (if it acquires a stake in Intel Foundry) will be successful. Inadequate production capacity Experts estimate that the output capacity of TSMC’s factories under construction in Arizona is less than one-fifth of the company’s 5nm and 3nm capacity in Taiwan. According to analysts at Bernstein Research, with the deployment of additional production in Arizona, the United States could raise its self-sufficiency in advanced chip production to 40-50 percent between 2030 and 2032. In the near term, this would only cover about half of the chip demand from US tech giants. Moreover, TSMC has not specified clear timelines or technologies for its US expansion. Intel could partly close the gap, but that depends on how competitive its chips are and how quickly it can overcome its financial difficulties. Slow rollout of production facilities TrendForce forecasts that the US share of global advanced chip production could grow from 11 percent to 22 percent by 2030. However, the construction of TSMC’s first Arizona plant took nearly five years, and there are no guarantees that future factories will be built fast enough to double US chip output by 2030. Labour shortage Developing a relatively self-sufficient microelectronics ecosystem requires a highly skilled workforce. However, the United States is facing severe staff shortages. By 2030, estimates suggest a shortfall of 67,000 to 90,000 professionals in the semiconductor field. China’s response to US sanctions The United States is not the only country leveraging interdependence in the semiconductor industry as a tool of pressure. China is responding in kind, though currently in a relatively restrained manner. In 2024, the Chinese government decided to completely ban exports of gallium, germanium, antimony, and ultra-hard materials to the United States even though the restrictions apply only to direct shipments. These actions not only drive up raw material prices (e.g., antimony prices more than tripled since early 2024), but also force US authorities to consider domestic mining and search for alternative suppliers abroad. High production costs According to the SIA, building and operating chip fabs in the United States is 30 to 50 percent more expensive than in Asia. Unofficial reports suggest that chips made at Fab 21 in Arizona cost 10 percent to 30 percent more than their Taiwanese counterparts (more precise figures are not publicly available). The high cost is attributed to expensive construction of facilities, high salaries (US engineers earn three times more than their Taiwanese counterparts, incomplete domestic semiconductor supply chains (some materials must still be imported)—TSMC CEO has complained about it—and complex logistics (finished wafers often need to be sent back to Taiwan or elsewhere for packaging).70 Even if tariffs eventually equalise chip pricing, US fabless companies like Apple or Nvidia may still find it more economical to source chips from Asia, where a properly functioning semiconductor ecosystem already exists—unlike in the United States, where such infrastructure is still in its infancy. Trump’s current tariff policy Imposing tariffs could lead to a significant increase in prices for components, equipment, and materials, while also injecting uncertainty into the semiconductor industry. For instance, it remains unclear how semiconductor manufacturers will operate under new tariffs on imported chip-making equipment sourced from the EU, Japan, South Korea, and Taiwan. The cost of such equipment can reach hundreds of millions of dollars—for example, the latest Low-NA EUV lithography machine from Dutch company ASML is priced at $235 million. If Intel, TSMC, and other firms are required to pay import duties of 20 percent or more, chip manufacturing in the United States will become prohibitively expensive, undermining investment plans of the manufacturers that have committed to building advanced fabs on American soil. Naturally, US officials understand that sharp moves in semiconductor policy—such as an aggressive tariff regime—carry significant risk and could spark a true technological crisis. In April 2025, the US Department of Commerce’s Bureau of Industry and Security (BIS) launched an investigation under Section 232 of the Trade Expansion Act of 1962 to determine the impact of semiconductor imports and related equipment on national security. Interested parties submitted comments, many urging extreme caution in this highly sensitive sector, which depends on a complex global supply chain split across multiple phases and countries. Thus, SIA recommended that any tariffs be phased in gradually to allow the US industry to continue functioning efficiently until domestic production capabilities are fully established. The US Chamber of Commerce called for restraint, warning that comprehensive tariffs on the semiconductor supply chain could damage US industry and undermine cooperation with allies and partners in achieving key national security goals. The Chamber also noted that foreign semiconductor companies have made long-term investment commitments to build capacity in the United States, and that political uncertainty and instability could jeopardise the stated goal of re-shoring semiconductor supply chains. *** As TSMC founder Morris Chang once said, America’s effort to ramp up its own chip production may well prove to be “a very expensive exercise in futility.” Microelectronics is one of the most complex industries in the world requiring not only massive financial investment, but also time. For decades, the industry developed within the framework of global division of labour. Now, building a relatively self-sufficient supply chain within a single country could take just as long. Yet, in the medium and long term, America’s push to revive its semiconductor industry may prove justified. The United States holds a strong position in the sector, and US companies control about 50 percent of the global semiconductor market. Furthermore, the United States remains a powerful magnet for talent, and possesses vast financial and political resources. Some experts believe that over time, the United States could weaken Taiwan’s dominance as the global hub of advanced chip manufacturing. The resurgence of the US semiconductor industry will reshape the global technological order in three key ways. First, it will trigger a transformation of the global semiconductor supply chain. Second, it will lead to greater US independence from imports of critical technologies, which means erosion of importance of some players in the industry, weakening their “technological shield”. Finally, it will cement US technological superiority in many critical industries, from AI to military systems, accelerating a global technological divide with profound geopolitical consequences. Indeed, America has the potential to become one of the world’s leading semiconductor production centres, provided that several key conditions are met, such as a favourable geopolitical environment, domestic political stability, and the absence of disruptive black swan events. However, Trump’s risky tariff policy could trigger unpredictable cascading effects, both domestically (e.g., higher prices for electronics and microelectronics products) and internationally (e.g., retaliatory tariffs by US trade partners), posing serious threats for the US semiconductor industry. First published in the Valdai Discussion Club.