The European Union’s summit produced consensus on “Buy European” policies aimed at reversing Europe’s competitive decline relative to the United States and China. Leaders from all 27 member states agreed that strategic sectors require protection through targeted and proportional European preference measures.
The policy shift reflects painful lessons learned from recent crises. The 2022 cutoff of Russian gas exposed dangerous energy dependencies that European leaders had rationalized as economically efficient interdependence. Germany in particular had built its industrial model around cheap Russian gas, dismissing warnings that this created vulnerabilities to Russian political manipulation. When Russia weaponized energy supplies, German industry faced existential threats as energy prices spiked. The crisis forced rapid diversification toward liquefied natural gas imports, renewable energy, and energy efficiency, but at enormous economic cost that is still being absorbed.
Donald Trump’s trade policies demonstrated that even close allies might suddenly turn hostile on economic issues. Trump imposed tariffs on European steel and aluminum, threatened tariffs on European automobiles, and demanded that Europeans buy more American products or face consequences. While some of these threats weren’t fully implemented, they revealed that European dependence on American markets and American security guarantees creates vulnerabilities that American presidents might exploit. The possibility of Trump returning to power has intensified European concerns about strategic autonomy—the ability to defend European interests even without American support.
China’s industrial policies pose perhaps the most fundamental challenge to European competitiveness. China’s state-directed capitalism involves massive subsidies to strategic sectors, enabling Chinese companies to sell below cost, capture global market share, and eliminate foreign competitors. Once Chinese companies dominate a sector, they can raise prices and exercise market power. This pattern has played out in solar panels, where Chinese manufacturers destroyed most American and European production capacity. Similar dynamics threaten batteries, electric vehicles, and advanced manufacturing equipment. China’s approach violates World Trade Organization principles of market-based competition, but enforcement mechanisms have proved inadequate.
António Costa’s identification of defense, space, clean tech, quantum, artificial intelligence, and payment systems as strategic sectors requiring European preference reflects a comprehensive view of economic security. These aren’t just industries but foundations of technological sovereignty. Defense and space are traditional national security concerns where European capabilities ensure independent decision-making. Clean tech, quantum, and AI represent emerging technologies that will shape future economic and military power. Payment systems provide financial infrastructure that could be weaponized if controlled by potentially hostile foreign powers. In each case, European weakness would create dangerous dependencies that could be exploited for political leverage.