Over the last few years, and particularly since the Covid crisis, the concept of “European strategic autonomy” has become ever more prominent in the EU policy debate. At the heart of this debate is the idea that the EU should have the capacity to act independently and reduce critical dependencies on foreign powers in key areas like defence, economy, and technology.
A mistake often made here is to confuse strategic autonomy with economic self-sufficiency. Yesterday’s announcement that NVIDIA is buying Hugging Face illustrates this. Hugging Face is considered a French success story. It was founded by three Frenchmen and incubated in Paris, even if its headquarters and many of its investors are American. It enables developers to share, discover and test open source AI models. Despite the fact that a European success story is now US-owned, this still strengthens Europe’s strategic autonomy, given that European startups and SMEs will now be less dependent on Chinese open source models.
This kind of openness therefore strengthens European security. The EU should not just pursue deeper economic relations with the United States, but also with India, Japan, South Korea, Canada, Australia and other parts of the free world.
This is not anti-China. On the contrary. It reduces the risks of trading with China, which has not shied away in recent years from introducing restrictions on, for example, rare earth materials that were geopolitically motivated.
On the other hand, such a policy of openness still does not exclude introducing trade restrictions when there are genuine security concerns. It merely means resisting the temptation to turn every geopolitical problem into a trade barrier.
"AI, Semiconductors, and the Trap of Zero-Sum Thinking" – New article by @pietercleppe https://t.co/3b89UksbzJ
— BrusselsReport.EU (@brussels_report) November 27, 2025
“Made in Europe”
Also in the EU policy debate on goods trade, pursuing “strategic autonomy” features prominently. Earlier this year, the European Commission proposed a so-called “Industrial Accelerator Act” (IAA), meant to boost domestic manufacturing capacity, accelerate decarbonisation, and strengthen Europe’s economic security.
The “decarbonisation” part stems from its previous name – “Industrial Decarbonization Accelerator Act”. According to Politico, it is “a climate law in disguise”, as it proposes to require EU member states to spend their money for low-carbon materials and net-zero technologies produced in the EU.
It will require that a quarter of construction-related steel which governments purchase meet green criteria. The fact that so-called “green steel” projects have proved unprofitable for industry, for example by steelmaker ArcelorMittal, which last year suspended such an investment project in Dunkirk, is clearly overlooked.
Fundamentally, to strengthen Europe’s economic security is however a fine ideal. A major debate is under way between France and Germany on “Made in Europe” provisions that would be included in this EU legislation. Unsurprisingly, France is on the protectionist side here, pushing for public funds to be shifted to struggling economic sectors, but it has already made some concessions, and so has Germany.
Under the latest proposal, France would get its “Made in Europe” provisions, whereby it would be restricted which trading partners qualify for EU-equivalent “trusted partner” status in key public procurement and subsidy programs.
In return, France would concede to watering down the EU’s planned 2035 phaseout of new combustion-engine cars, something demanded by Germany. One would think that the carnage in Europe’s manufacturing industry would have made every EU member state agree to simply scrap this phaseout policy, which basically bans the types of cars which European car manufacturers are better at producing, but well.
A problem is that introducing “Made in Europe” requirements may well end up becoming an act of self-harm for the EU. That is the case because the EU risks losing some market access in its FTA negotiations as a result of the IAA. Evidently, trading partners would not let it go unpunished if they are not included. At least, the European People’s Party (EPP) is reportedly pushing strongly for them to be included.
Furthermore, it looks like “Made in Europe” will not just mean protectionism, but politicised protectionism. As Rob Francis, the editor of Borderlex, puts it: “MEPs feel they need to set the criteria for which third countries can be classified as ‘Made in Europe’ – why? Because the commission didn’t do it! Seems crazy to me. If this is done wrong can jeopardise entire trading relationships.”
In the past, a World Trade Organisation panel already found similar “Made in US” rules illegal. So much for the EU opposing the protectionist agenda of US President Donald Trump.
Zero-sum thinking will fuel resentment and scarcity https://t.co/GhMfo7HZPk | opinion
— Financial Times (@FT) August 29, 2026
Conclusion
The ongoing debates on restrictions on foreign investment and new “buy European” obligations are underpinned by too many unspoken protectionist assumptions.
It is true that the United States, China and many other jurisdictions aren’t exactly paragons of free trade. Then, often, for the sectors where it matters, they have been particularly open. Despite US President Donald Trump’s immigration restrictions, the United States continues to attract much of the top talent of the world to develop AI, many of them Chinese. And over the years, China has been able to build up a manufacturing base by opening up its economy to the world, even if it was still strongly guided by the Chinese state, and even if China has in recent years reversed this trend.
Whether it concerns services trade or goods trade, the EU does not become strategically autonomous by having fewer economic partners. It becomes strategically autonomous by having more of them.
