41. Tough trade: The hidden costs of economic coercion
- Author:
- Jonathan Hackenbroich, Filip Medunic, and Pawel Zerka
- Publication Date:
- 02-2022
- Content Type:
- Policy Brief
- Institution:
- European Council on Foreign Relations (ECFR)
- Abstract:
- Chinese economic coercion against Europe is on a deeply worrying trajectory. Having moved from threats in 2020 to punishment of European companies in 2021, China is now interfering with the EU market as part of a diplomatic dispute with Lithuania. If Beijing pressures European companies to stop trading with Lithuania, businesses could face pressure to stop dealing with Taiwan, Slovenia, or other places when tensions rise. The threat of Russian energy coercion is real, too. The EU needs to develop an Anti-Coercion Instrument that acts as a powerful economic deterrent, but this alone will not sufficiently protect Europe against economic coercion. The EU also requires a comprehensive resilience architecture, including a strong agenda for improving economic strength and trade links, a Resilience Office, and a reformed Blocking Statute that can counter secondary sanctions with Chinese characteristics. A Resilience Office could provide strategic coordination of the EU’s response and evaluate the costs of economic coercion, while the Blocking Statute could allow for targeted countermeasures against companies based in third countries.
- Topic:
- Security, Economics, European Union, Trade, and Coercion
- Political Geography:
- Europe