In the power struggle between the two countries, where China is trying to advance its positions, the US is becoming increasingly protectionist and relocating its production, away from China. It works for a large country with a lot of resources, according to Mikael Wigell, research director at the Finnish Institute of International Affairs. However, it is difficult for smaller countries to do the same.
– Sweden does not have that luxury. Our economy has been built on free trade and an open economic climate. That makes it difficult in a situation where we see that free trade is going backwards, he says.
While the US is withdrawing, many countries are dependent on China’s raw materials – as they have great control over the metals and minerals that are fundamental to the transition to green technology.
– Their dominance is a strong weapon against the EU and makes us very vulnerable, says Mikael Wigell.
Raw materials in Sweden can reduce dependence
Cecilia Malmström, former EU Commissioner for Trade, explains that there is an ongoing discussion within the EU about how to become less dependent on China’s raw material resources.
– Many of the minerals are actually found in Sweden. But large investments, environmental tests and permits are required for that, she says.
However, it is a possible long-term solution. In the short term, partnerships with other parts of the world, such as Africa and Latin America, may be an option. It is where the minerals in question are found and extracted. The EU is also discussing how to deal with the changed trade patterns – in the wake of a more protectionist US.
– There is an ongoing discussion about the need for the EU to become more self-sufficient. At the same time, there are many countries outside Europe that are also affected by the actions of the United States, which makes it important that we work together, says Cecilia Malmström.
See the latest section of the Financial Services Agency “The power struggle” on SVT Play.