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Abu Dhabi, UAEThursday 19 July 2018

China and the US are the two elephants in the world and Europe risks being trampled

Merkel decided to run for another term to defend her values against Trump. She might have overplayed her hand, writes Alan Philps

US President Donald Trump and German Chancellor Angela Merkel. Kevin Lamarque / Reuters
US President Donald Trump and German Chancellor Angela Merkel. Kevin Lamarque / Reuters

One of the defining characteristics of Donald Trump's presidency is his relish for fighting wars on two or more fronts at the same time. His key battles at the moment are with China and Germany. With Xi Jinping, his Chinese counterpart, it is over which country from 2020 will dominate the high-tech industries that have been a huge source of wealth and power for the United States.

As for Germany, the battle is for moral leadership of what used to be called the free world. In Mr Trump’s world, this issue is defined by migration and his opponent is German Chancellor Angela Merkel, who in 2015 opened Germany’s borders to a million immigrants. She is the embodiment of globally minded liberalism which, in his apocalyptic view, has allowed migrants to violently change European culture and way of life.

As Mr Trump prepares for a trade war with China, it would be logical to gather around his European allies who share his concerns about the rising power of state-backed Chinese companies and their attempts to acquire western technologies. Germany, France and Britain would surely support the US president in some of his goals. But that is not the way of politics in Mr Trump’s second year in power. His operating method is maximum disruption to try to change the power balance abroad while at home distracting his supporters and overwhelming his critics.

To understand how these two leaders have ended up as Mr Trump’s antagonists it is worth looking back to the days after he was elected in 2016. We now know that Mrs Merkel was considering quitting politics and not running for a fourth term. During a three-hour heart-to-heart with Barack Obama, she revealed that she would have hung up her hat if Hillary Clinton had won. But she felt obliged to seek another term to defend her values against Mr Trump, according to a new memoir The World As It Is, by the Obama adviser and speechwriter Ben Rhodes.

If all politics is domestic, then Mrs Merkel’s decision was quixotic indeed. Given the trend of politics towards populism, it will no doubt be seen in future as a sign of hubristic over-confidence. The idea of the German chancellor as Mr Trump’s steadfast opponent in the war of ideas is hardly new but it became a reality – at least in digital terms – at the Group of Seven summit in Canada earlier this month. The defining photograph showed Mrs Merkel standing over the US president, hands pressed firmly on the table, as Mr Trump sat defiantly with his arms folded across his chest.

Many other pictures were taken at that summit, some of them showing the leaders of Germany and the US smiling together. But it was that shot of Mrs Merkel as leader of the western world which symbolised the encounter. No doubt it stuck in the mind of Mr Trump, who has been on an anti-German Twitter campaign since.

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Mrs Merkel is now beleaguered, with her coalition threatened with collapse by a row over migration policy. Her interior minister Horst Seehofer wants to close Germany’s borders to migrants who have registered in other European countries, such as Italy or Greece, while Mrs Merkel insists on pursuing an elusive “European solution” to the problem. This is not likely to happen in the face of opposition from countries such as Poland and Hungary, which reject the idea that they should take a share of Europe-bound migrants who actually want to live in Germany or Sweden.

It is not outlandish to imagine that Mr Trump’s far-right advisers are hoping that Mrs Merkel will soon be forced from power. This would be a major blow for European security but a victory for the right in the US culture wars, where the European liberal consensus on migration and socialised healthcare is cast as the enemy of the American way.

Mr Xi, by contrast, seems more comfortable. At the same time as Mrs Merkel was revealing her ambition to defend European values against Mr Trump, the Chinese leader had a more robust plan of action. Again, according to Mr Rhodes’s memoir, Mr Xi told the outgoing US president that a strong relationship with Washington was good for the world. “But every action will have a reaction. And if an immature leader throws the world into chaos, then the world will know whom to blame.”

He seems to have stuck to this plan of action, first by cultivating a relationship with Mr Trump, strongman to strongman, then by stepping in as the guardian of the environmental agenda after Mr Trump abandoned the 2015 Paris climate change agreement and now, with the White House ramping up its tariff war with China, as the injured party reluctantly forced to retaliate.

It must have been clear to the Chinese leadership for some time that a bust-up with the US was coming. The years when the two countries’ economic interests were complementary – China used its cheap labour to build up an advanced manufacturing base and US companies got the profits from the finished products – could not last. Their economies are now becoming directly competitive.

Will this mean a full-blown trade war? Or is Mr Trump scaring US companies into putting more investment in the US? In any case, Mr Xi is determined for his country to rise up the value chain from manufacturing to the commanding heights of tech.

The result might be a split in the global market, with the US dominant in its own hemisphere and China the leading economic power in Asia. That long-term view does not provide any comfort for Mrs Merkel and her successors. Today China and the US are the two elephants in the world and Europe risks being trampled. With hindsight it is clear that her decision to stand again was motivated by an overestimate of her own and European power in influencing the world in the time of Mr Trump and Mr Xi.

Alan Philps is editor of The World Today magazine of international affairs