• ► Europe’s Strategic Autonomy is Strengthening: European nations are increasing defense spending, reducing energy dependence on Russia, and pursuing economic de-risking from China, primarily through NATO and EU frameworks.

• ► Limited European Military Role in Indo-Pacific Crises: In the event of a China-led escalation in the Indo-Pacific, Europe is unlikely to provide significant military support due to its own vulnerabilities and the need to deter potential Russian aggression.

• ► Opportunities for Indo-Pacific Allies in Europe’s Shift: Europe’s defense and green energy transitions offer strategic economic collaboration opportunities for Indo-Pacific democracies, especially in building China-free supply chains.

Before analyzing the implications of European policy shifts on strategic autonomy for U.S. allies in the Indo-Pacific, it is first necessary to assess what Europe is actually doing. For the purposes of this analysis, we can summarize this phenomenon in three specific segments.

First, European countries are urgently boosting their defense budgets in light of the increased military threat posed by Russia and fears of the United States reducing its military engagement in Europe. Most of these policies are implemented through NATO structures, with a few managed via EU channels, particularly in defense industry funding cooperation and research. European states are increasing their defense build-ups to levels comparable to the Cold War era as the Russian war in Ukraine continues. European policymakers are also closely monitoring the existential scope of Chinese political, material, financial, and technological support for Russia’s war of aggression in Ukraine.

Second, European countries are rapidly developing policies in response to China’s rising aggressiveness. Most such initiatives fall under the EU umbrella and focus on economic security and industrial policies aimed at countering Chinese strategic ambitions. The overall goal is typically described as “de-risking” from China. While this policy direction is now mainstream in most European national political discourses, the practical impact on the majority of European industries outside security-linked sectors remains to be seen, as such policies entail economic costs. Consequently, few European politicians are pushing for rapid de-risking from China, as their domestic industries and constituencies often fear Chinese economic retaliation, which could lead to job losses and, ultimately, electoral defeat at the national level.

Third, Europe is undergoing a broad energy transition, generally summarized as Green Deal policies. While the overarching aim is for Europe to become carbon-neutral, some of these initiatives have major geopolitical implications: from effectively decoupling much of Europe from fossil energy imports from Russia for security reasons, to transforming the bulk of European industries toward sustainable energy sources. One side effect is a strategic dependency of European countries on China in selected segments of green energy, which poses a significant risk by enabling economic coercion by Beijing in times of future contingencies.

#1 Impact of European Strategic Autonomy Efforts: European Role in a China-led Contingency

A common question among policymakers in Seoul, Tokyo, Taipei, Manila, or Canberra is: if China escalates in the Indo-Pacific, what would Europe do? Despite Europe’s economic security de-risking efforts so far, the continent remains deeply vulnerable to Chinese strategic economic blackmail. If China escalates against Taiwan or if a regional contingency involving joint Russian, Chinese, and North Korean aggression occurs, Europe would likely face two distinct pressures to act. The U.S. would probably withdraw most of its Navy and Air Force assets from Europe and redeploy them to the crisis area. Washington would almost certainly push European capitals to initiate severe EU economic sanctions on China to persuade the Chinese Communist Party leadership that further escalation would mean losing access to the European market, in addition to ending trade relations with the U.S. Such an economic warfare plan between Europe and the U.S. would threaten the survival of the Chinese Communist Party regime, as its economic stability would be badly damaged in the medium term. Simultaneously, China would likely use all its economic and technological leverage across European states to ensure that EU sanction packages are not activated, as many European capitals might reconsider due to their deep domestic vulnerabilities. Despite some European powers signalling intent through Freedom of Navigation operations in recent years, Europe would almost certainly not provide significant military assets to aid U.S. Indo-Pacific allies. The hard reality is that if China escalates in the Indo-Pacific, there is a high chance that Russia, as its de facto ally, would try to exploit the expected U.S. military withdrawal from the European theater to at least threaten European democracies with military escalation. Therefore, nearly all European naval and air force assets would be positioned around NATO’s Eastern Flank to ideally deter Russian hostilities or defend against them directly.

#2 Impact of European Strategic Autonomy Efforts: Coordinating Approaches to the U.S.

It is a fact that U.S. allies in Europe and those in the Indo-Pacific often compete for U.S. political attention, as well as for prioritization of military assets and materiel. All of these resources naturally exist in a zero-sum context. Since the Trump Administration appears to be oscillating between isolationist and prioritization strategies, competition among U.S. allies for resources is expected to intensify. While it might seem pragmatically beneficial for South Korea, Japan, or Taiwan to push Washington for absolute prioritization of their theater, such a stance may ultimately be short-sighted for their national security interests. If the U.S. were to swiftly withdraw from Europe in terms of military presence and reassurance to redeploy most of its assets to the INDOPACOM Area of Responsibility (or partly to CENTCOM, given interlinks in China-led contingency planning), such a geostrategic decision might signal to Russian leadership that a historic window of opportunity for invading the Baltic states could arise in the next two to three years. A Russian military attack on NATO might not seem so different from the current Russian war in Ukraine in the eyes of U.S. Indo-Pacific allies, but such a contingency would rapidly escalate into most European states being at war with invading Russian forces. The resulting geo-economic implications would severely impact all of Asia. While it is clearly in the interest of Indo-Pacific democracies to have as many U.S. strategic and military resources as possible available to deter Chinese escalation in Asia, strategic and operational re-shifting would, in effect, lead to a Russian war with NATO, with catastrophic geo-economic consequences for Asia. Such a European contingency might even prompt China to accelerate its escalation timelines in East Asia. Therefore, U.S. Indo-Pacific allies should coordinate directly with their European counterparts to balance the ongoing U.S. prioritization of the China threat and avoid appearing weak to Russian and Chinese dictatorships in both theaters.

#3 Impact of European Strategic Autonomy Efforts: Pragmatic Cooperation in Global De-risking from China

European rearmament efforts and massive energy transition initiatives provide pragmatic economic opportunities for strong, friendly economies such as South Korea, Japan, Taiwan, or Australia. Fears of future contingencies have led some states to push for China-free supply chains in specific industries, which is precisely where such cooperation would make strategic sense. Given the existing economic, material, and technological dependencies of European and Indo-Pacific democracies on China, urgent prioritization of the most vulnerable sectors should be placed on the agenda. While natural commercial competition often makes strategic policies of de-risking from China-led supply chains significantly difficult in practice, this is where governments must intervene and initiate industrial strategies with sufficient funding to incentivize industries to diversify away from China in favor of friend-shoring. Outside of military build-ups, there are no more pressing, survival-oriented priorities for national governments, as the China-Russia-Iran-North Korea axis is clearly preparing for a global conflict in the coming years. Protectionist policies of the Trump Administration make such geo-economic efforts more challenging, but this is precisely why U.S. allies in Europe and the Indo-Pacific should engage directly and strike compromises across these strategic industrial initiatives under the economic security umbrella.