Strategic Technologies—Will They Divide or Unite?
The Biden administration made unprecedented efforts to upgrade transatlantic coordination on China policy, and cooperation on technology and economic security between the U.S.
The first Trump administration and the subsequent Biden administration made strategic technologies a cornerstone of their approach to competition with China, and tech cooperation became central to the United States’ relationships with allies and partners like Europe and India. As President Trump takes office for the second time, big questions remain on the administration’s overall approach to China and whether strategic technologies will be a point of contention or cooperation with allies and partners.
Garima Mohan, Senior Fellow, Indo-Pacific Program, German Marshall Fund of the United States
Latest Videos
It is clear that China and the United States are in a competition to shape the evolving global technological landscape, underlined in the previous administration’s approach to domestic legislation and its coordination with allies and partners.
Transatlantic Trade and Tech Debate
The Biden administration made unprecedented efforts to upgrade transatlantic coordination on China policy, and cooperation on technology and economic security between the U.S. and Europe became a fundamental pillar of this coordination. Despite Washington’s frustration with some European capitals’ willingness to prioritize short-term economic gains with China, the overall tone of the EU’s China policy shifted significantly during these years. The EU-China strategic rivalry has intensified manifold. We see some evidence of a move away from the traditional “partner, competitor, rival” framing to focus on the latter two aspects. The acknowledgement of China as a “decisive enabler” behind Russia’s capacity to sustain the war against Ukraine means that Beijing is seen as an outright threat. The incoming “China shock” has only increased the pressure on the EU to derisk from Chinese investment in critical sectors, including strategic technologies and telecommunications, and ensure the competitiveness of its industry.
It is no surprise that the EU set up Trade and Technology Councils (TTCs) with India and the United States—two key partners with which it seeks to coordinate and intensify ties in the face of China-related challenges. However, the U.S.-EU TTC met four times in total and made modest gains on AI, quantum, and green technology but could not make any progress on trade issues.
The path ahead for the EU and the United States is about to get murkier. With the US announcement of 20 percent tariffs, and the EU announcing the first package of countermeasures, the opening salvos of the U.S.-EU trade wars have been fired. U.S. tech companies view the EU as overly regulated, while the EU sees them as under-regulated. As these companies increase their impact on legislation in Washington, a constructive trade or technology conversation on China-related challenges seems almost impossible.
U.S.-India Convergence
Unlike transatlantic coordination on China that has historically been tense, India and the United States’ approaches to China were very closely aligned in the Biden administration. The border clashes of 2020 fundamentally altered the trajectory of India-China ties and sparked many policy decisions in New Delhi, including a clampdown of Chinese investments in critical sectors domestically and a diversification of partnerships internationally. Even under the first Trump administration, New Delhi was more ready to keep Huawei out of its 5G networks than Europe was. The Indian government’s adoption of Press Note 3 in the wake of the border crisis severely restricted Foreign Direct Investment from China, particularly direct and indirect investments in critical sectors, technology, startups, and public procurement.
In addition, India-U.S. defense trade and technology partnership expanded immensely over the years to include defense industrial collaboration, co-production, and co-development. The initiative on Critical and Emerging Technologies (iCET), now rebranded as TRUST, has led to the deepening of strategic cooperation in space, artificial intelligence, quantum, biotech, and clean energy. Advanced defense innovation through the India-U.S. Defense Accelerator Ecosystem focuses on promoting collaboration among defense startups. The United States is a partner in India’s semiconductor mission, and American companies are looking to invest in India’s semiconductor sector.
As President Trump took office for the second time, Prime Minister Modi was one of the first heads of state to visit Washington, D.C. The visit was successful and not only underlined the continuation of cooperation in the areas of technology, defense, and energy but also announced new initiatives. Particularly interesting is the TRUST, which will build on public and private sector partnerships between the U.S. and India, while focusing on “verified technology vendors to ensure sensitive technologies are protected”.
The above are important signals from the new administration but, like Europe, the question for India is the direction of the U.S.-China policy under this administration. Signals have been mixed so far, with the appointment of “China hawks” and simultaneous talks of striking a deal with China. What such a deal would entail and how it could impact U.S. partners in the Indo-Pacific remains to be seen. Finally, U.S. domestic debates on technology-related matters, including export controls, AI regulation, friendshoring, and reshoring, could also impact India.
Paths Ahead
While U.S.-India ties seem to be on firmer footing, Europe has seen a clear break in the transatlantic alliance. The incoming trade war will happen just as Europe becomes increasingly reliant on the U.S. market and as sales to China crater. Major shifts in Europe have been seen as a result of this shock, one being increasing defense spending. The second is a search for new partners. India has benefitted from this realignment in European foreign policy, as seen in the historic visit of the EU Commission president along with the college of commissions to New Delhi at the end of February. Trade and technology were highlighted as new strategic areas of cooperation between the EU and India.
********************************************************************
This article is part of a series exploring “Sambhavna”—opportunities in technology, the theme of Carnegie India’s ninth Global Technology Summit, to be held from April 10-12, 2025, with public sessions on April 11-12, co-hosted with the Ministry of External Affairs, Government of India. For more information about the summit and to register, visit https://bit.ly/JoinGTS2025AN.
subscribe to Asianet Newsable WhatsApp channel by clicking here.