‘We Are Allied, but We Are Not Aligned’

Borrell is in Silicon Valley visiting tech leaders and Californian officials this week, a recognition of the growing importance of technology to geopolitics and Europe’s efforts to avoid being left out of the conversation. After meeting with the tech and artificial intelligence giant Nvidia’s CEO, Jensen Huang, Borrell sat down with Foreign Policy at the company’s headquarters to talk tech regulation, EU-U.S. relations, China, and the conflicts in Ukraine and Gaza.

 This conversation has been edited for length and clarity.

Foreign Policy: What response have you gotten from the tech industry to European regulation efforts? Have you faced pushback?

Josep Borrell: There has been a certain feeling that over-regulation can inhibit technological development and [that] one of the reasons why [Europe is] lagging behind is because of too much regulation. I don’t think so. I don’t think the problem is too much regulation, because if you look back 20 years ago, when the regulation was not there, we were already lagging behind. 

I think that it’s a matter of how our ecosystem has been working. Lack of capital markets, a lack of understanding of the trends of technological development. Maybe we concentrated too much on the economic sectors and technological sectors of the past, and we haven’t seen the new things coming, from electric cars to artificial intelligence. Now we discover that others have been investing and organizing much quicker in these key sectors of the future—here in California and in China also. 

Europe can be in the middle of these two giants and we can become a kind of collateral damage of this competition. If [the United States] closes the door to the Chinese electric cars by putting a levy of 100 percent on them, then where will those Chinese cars go? They’re going to go to other markets. Which are the other markets that could absorb this capacity? Well, it’s Europe.

FP: How have U.S. trade policies impacted Europe?

JB: It is clear that the U.S. is pursuing a strong policy in order to create incentives and give financial support to the firms who are investing in the U.S. in order to develop the new technologies to fight climate change. And it’s good for climate change. But it’s clear that these incentives can attract firms to invest in the U.S. better than in Europe, because in the U.S. they have strong financial support and because energy is much cheaper in the U.S. than in Europe. 

So when we talk about leveling the playing field inside the [EU’s] internal market, we also have to be worried about leveling the playing field with countries who are our friends but who, at the end, are also our competitors.

FP: What has the response been when you’ve conveyed these concerns to Washington?

JB: The response is: “You believe that it’s going to create an imbalance? [Then] do [what we’re doing].” 

The problem is that [the EU is] not a state—we don’t have a Pentagon, we don’t have a treasury. And when you say, “Give fiscal incentives,” who is going to do it? We have 27 different fiscal systems, and we don’t have a federal authority that could distribute these advantages. And if we do it at the level of each member state—and member states will be more capable to do it because they have a stronger financial capacity—then it is going to create an unlevel playing field inside our internal market.

Here in the U.S., it’s not Texas or Minnesota or Delaware who is doing this kind of fiscal incentive, it’s the federation. But we are not a federation, so we don’t have a central power that could disseminate these fiscal advantages for everybody around the union. So we cannot do the same thing.

Here in the U.S., you are fighting against climate change by distributing financial support that creates jobs—you’re using the carrot. In Europe, we have been fighting against climate change by using prices or taxes—a stick. Two different approaches.

FP: How much alignment is there on China between Brussels and Washington, and within the EU itself? Chinese President Xi Jinping just visited Europe and chose to travel to three countries that are probably the most divergent from Brussels in their attitudes toward China: France, Serbia, and Hungary.

JB: China has always tried to create a divide inside the European Union, trying to get closer to the eastern part of the European Union. But there are some member states, in particular Hungary, who are building a closer relationship with China than others, attracting Chinese investment and offering a much better political relationship. And the same thing can be said about Serbia, who is not a member [of the EU] yet but is a candidate. And it’s clear that the way that Xi was received in Serbia shows a degree of political linkage, which is for sure different than he would have had in other countries. In France also he was very well received, but in France everybody knows that there is a big question about the competition on electric car production.

But I think that we talk about two different things when you talk about the capacity of China to overflow us with cars. One thing is the excess capacity and another thing is the internal imbalance of the Chinese economy. The real problem is the structural imbalance of the Chinese economy, which makes internal demand weak with respect to production capacity, and the excess has to be evacuated or exported. 

So what China is doing is exporting to the rest of the world its internal imbalances. And to solve it, put in tariffs. The only thing that can be done is to transfer the product from one sector to another or from one market to another. The electric cars will not be sold in the U.S.; it will be [in] the rest of the European market [that they’re sold]. And if you put the tariff in one sector, other sectors will pay the price.

So the real problem that we have in our economic relationship with China is the internal imbalance of the Chinese economy, and this is something that is difficult to solve because it’s a matter of policy. China is implementing two different policies which are complementary. One is shrinking internal demand to have export capacity and the second is focusing on critical sectors, the sectors they have identified as the future sectors. They did that with the solar panels, and now they’re doing that with the car industry, investing massively in both. 

When they did that with the solar panels, they ruined our production capacity—80 percent of the solar panels that we are using in Europe are coming from China. I think the same thing happens in the U.S. And now the car industry, which is one of the hardcore parts of the industrial capacity in Europe, is under the same threat.

FP: Do Brussels and Washington see eye to eye on the threat of China?

JB: I think that we are allied, but we are not aligned.

It doesn’t mean that we are fighting each other, but in some cases it’s clear that we have different interests. We are not equidistant—we will always be closer to Washington than to Beijing. We share the same economic and political model. But it doesn’t mean that 100 percent we agree on everything, because there are different approaches, different interests.

With respect to our relationship with China on technology and trade, we should act in a better-coordinated manner. That’s why we created the Trade and Technology Council.

But at the end, [the Inflation Reduction Act] was presented by the U.S. without any kind of previous consultation, knowledge, and discussion with us. It was their own decision. In fact, it has a lot of consequences from the point of view of trade and technology with respect to us. And now, to put a levy of 100 percent on electric cars, it is also something that is decided by the U.S. without any kind of coordination with us. 

I think it’s important because in this triangle, the side effects are important, and I don’t think that the Europeans should be the adjustment variable of the confrontation between China and the U.S. At least, that’s what we should try to avoid.

Borrell speaks during a press briefing at the EU Military Assistance Mission center, where soldiers of the Ukrainian Armed Forces are trained by EU armed forces, near Brzeg, Poland, on Dec. 2, 2022. Bartek Sadowski/AFP via Getty Images

FP: I wanted to ask about Ukraine’s path toward EU membership. How is that going, and what does the road ahead look like?

JB: The war has had consequences. One is the fact that today Ukraine is being granted the status of candidate state in a record time. For sure, without the war and without the very challenging situation in which Ukraine is, this would have taken much more time, if ever. 

But it shows a political will of supporting this country, because the strongest security commitment that we can offer to Ukraine without being a military alliance—which we are not—is membership. We can supply arms to fight the war, and the financial support that we do more than the U.S. You add up the total amount of money that we have been providing to Ukraine, it’s about 96 billion [euros] already paid, which is more than the U.S. Certainly they are more concentrated on the military side than us, that is not the negligible sum, but the most important thing that we can offer to Ukraine is membership. 

This has been decided by unanimity because Ukraine is a country being attacked, we want to support Ukraine, and this should not be empty words. So Ukraine has to fight two battles at the same time—the battle of rejecting the Russian aggression, which is something that has to be done in the battlefield, and the battle of reforms that they have to do in order to fulfill all the conditions to become a member. And they have to do it at the same time because accession is a merit-based process—in order to become a member, you have to fulfill certain conditions. If we consider you a candidate, it means that we believe that you could fulfill these conditions, and we will support them in order to do it.

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FP: We saw the prolonged struggle to pass the latest aid package for Ukraine in the U.S., and as you said, Europe has given a lot of aid of its own. How much does that move the needle for the war effort?

JB: Russia continues attacking Ukraine. In these last hours we have seen stronger attacks opening new fronts. Russia has massed 450,000 soldiers. At the beginning of the war it was 150,000. I don’t see any intention on the Russian side to stop the war but [rather] to continue the war, and quickly, before the support that has been delayed for six months from the U.S. reaches the front line. So they are attacking quicker in order to take advantage of the relative weakness of the Ukrainians due to the fact that the U.S. support has been delayed, and even our support has not been as much as requested from the point of view of ammunition, for example. 

So I don’t see Russia stopping the war. They will continue pushing, and we have to continue supporting Ukraine. And this six-month delay will not come without consequences on the front line.

Borrell takes questions from the media on the situation in Gaza and other topics upon his arrival at the European Council in Brussels on Oct. 26, 2023.Nicolas Economou/NurPhoto via Getty Images

FP: On to the conflict in the Middle East, which you’ve been vocal about. The U.N. General Assembly recently voted in favor of Palestine’s membership bid, and multiple EU member states are set to officially recognize Palestine in the coming days. How will those actions impact the war in Gaza and global pressure on Israel?

JB: It’s clear that [while] we have been very united in front of Russia and its aggressions in Ukraine, we haven’t been united in our position with respect to the war in Gaza. The first thing I have to say when we talk about the war in Gaza is that it started with a horrific terrorist attack [by] Hamas. I’ve said many times that it was a horror that we condemn in the strongest possible terms, but one horror cannot justify another horror.

Everybody from President [Joe] Biden, [U.S.] Secretary [of State Antony] Blinken, all the leaders of the European Union, is telling the Israeli authorities that there are too many people being killed [in Gaza]. My question is: How many are too many? Is 45,000 too many? What is the standard? 

And at the moment, everybody is asking [Israeli Prime Minister Benjamin] Netanyahu not to attack Rafah, because in Rafah there are hundreds of thousands of people that cannot escape and they cannot protect themselves from the war. Despite this request, it seems that Netanyahu’s attacking Rafah, and we are all concerned by the degree of humanitarian catastrophe that this can produce. The problem is not to be concerned, but if you say something is unacceptable, it should not be accepted. So, what’s happening now? What’s next?

FP: And how much of that is at the door of the U.S.? Do you think the U.S. is using all the leverage that it can over Israel?

JB: I am not in a position to give advice to the U.S. But in 1982, when Israel was bombing Lebanon and Beirut, President [Ronald] Reagan decided to stop the supply of [U.S.] ammunition [to Israel], arguing that the number of civilian casualties was too high, and that it was unaffordable and unacceptable. He decided to stop the flow of munitions; they did. And in 1991, when Israel was reluctant to go to Madrid for the peace conference, [Washington] told the Israeli government: “If you don’t go to Madrid to start the peace talks, I will cut your funding.” So, there are leverages that have been used in the past.

FP: Do you think that U.S. support for Israel has undermined the West’s messaging on Ukraine to the global south?

JB: One of the complaints that I am hearing more is criticism about double standards. This is a strong criticism all over the world, and [it] certainly affects the perception of people.

I wonder what would happen if the Russian ambassador to the United Nations were to go up to the podium of the General Assembly and destroy the charter of the United Nations [as Israel’s U.N. ambassador recently did]. I wonder what our reaction would have been. Certainly, we would not have been happy. 

And many people around the world complain that what Israel is doing in Gaza, we would not accept Russia doing in Ukraine. This creates the accusation of double standards, and we have to be very careful because we can lose our credibility. That’s why we put pressure on Israel not to continue doing the military operation the way they have been doing, understanding very well their reaction to the terrorist attacks. For me, one horror doesn’t justify another, and what’s happening in Gaza is a horror.

Borrell attends the EU-China High-Level Strategic Dialogue in Beijing on Oct. 13, 2023. Pedro Pardo/AFP via Getty Images

FP: Moving to the Indo-Pacific, is there much discussion in Brussels on the possibility of a Chinese invasion of Taiwan? What would the EU do if a conflict were to break out there?

JB: We keep saying the same thing: We believe that we have to decrease tensions, we have to respect the statute of war, and we have to exclude any possibility of a military solution to the problem. Our fixed position is we don’t recognize the statehood of Taiwan and we will not do it. It’s one single China. It means that we are not going to recognize the statehood of Taiwan; we will have economic and cultural relations with this territory without recognition of statehood. And we call on everybody to understand that there is not a military solution to this problem.

FP: You have said that Europe must “learn to speak the language of power.” What does that look like in practice?

JB: It’s difficult to give an example, but we Europeans have been developing a foreign policy mainly based on trade. Today, everything is becoming a weapon—even trade has become a weapon. So we have to understand that we live in a more conflictual, a more transactional world in which you have to be able to say not only, “Please do it,” but [also to] have some leverage. We certainly have leverage, but we have to have the political will of using it.

Power is not only military power. Today, we talk about economic security, climate security, digital security. Everything can be understood from the security side, so everything can be used from the leverage side. 

FP: With the EU parliamentary election coming up, what are your hopes for Europe, and what should be the priorities for the next four years?

JB: I am not running for this election, not even as a candidate to become a member of European Parliament. But I think that the feeling is that Europeans have to be more responsible. I don’t want to talk about strategic autonomy; I want to talk about strategic responsibility—to be aware of the challenges of the world and to make European citizens aware that, yes, we make peace among us, but peace is not the natural state of things. The whole world is suffering wars. And now the war is on our borders, and we have to be able to face a situation in which we should react. For that, you have to have the capacity, and it’s clear that we don’t have it.