The latest details of the US-EU trade agreement framework indicate that the European Union is increasingly aligning itself with the United States in the fields of technology, security, and trade. One core arrangement is adopting US security standards to restrict the flow of artificial intelligence (AI) chips to China to prevent advanced technology from falling into potentially harmful uses.
On Thursday (August 21), a joint statement confirmed that the agreement reached by the US and EU in July stipulates that the EU will accept a 15% tariff on 70% of its exports to the US. At the same time, the EU will consider exempting certain US products from broad climate regulations and lowering tariffs on US products, including industrial goods. The statement positions this as a “framework” towards a more comprehensive trade agreement.
While the 19-point terms of the joint statement did not directly mention China, the wording in several places effectively points to Beijing. The statement mentions that the EU will purchase $40 billion worth of AI chips from the US and “adopt” US security standards to prevent technology from flowing to “worrisome destinations,” widely seen as a reference to China.
The US has revoked a Biden-era restriction that determined which EU countries could purchase US AI chips. However, the announcement indicates that the US still aims to control the ultimate destination of these chips to prevent them from being transferred to sensitive regions.
Maros Sefcovic, the EU’s trade chief, stated at a press conference in Brussels that the EU is committed to ensuring that semiconductors “do not fall into the wrong hands.” He said, “We want to make sure that once these AI chips enter Europe, they stay in Europe to benefit the European economy, rather than being shipped elsewhere.”
The joint statement also indicates that the US and EU will restart previously suspended economic security cooperation, including investment reviews, export controls, with the aim of preventing China from further gaining access to cutting-edge technology.
In recent years, China has repeatedly used economic means as a political weapon. In April of this year, Beijing restricted rare earth exports, causing a serious supply crisis for European companies, leading to a tougher stance from several EU countries. Sefcovic reflected, “We experienced several dramatic moments this spring and summer, with sudden shortages of permanent magnets, rare earths, and other critical raw materials, which severely impacted European companies.” He emphasized that there is now more consensus among member states that joint action must be taken.
The agreement also stipulates that the EU commits to an additional $600 billion investment in the US in strategic areas by 2028 and “significantly increase” purchases of American military and defense equipment. Supporters believe that this will not only help strengthen European security but also solidify the transatlantic alliance to maintain the Trump administration’s support for Ukraine’s war.
However, the agreement has also sparked internal controversies in Europe. Critics question whether Europe, after months of debate on “de-risking” its position towards the US, has further deepened its technological and military dependence on the US.
In addition, the statement mentions that the US and EU will work together to address issues such as “non-market practices, unfair competition, and lack of reciprocity in public procurement,” widely seen as targeting China’s industrial policies and trade practices.
(Translated and adapted from an article by South China Morning Post)