The recent endorsement by Volkswagen CEO Oliver Blume of European Union proposals to bolster domestic industry against Chinese rivals should serve as a stark reminder to policymakers across the Atlantic: economic security is inextricably linked to national security. While Mr. Blume’s comments, made ahead of the Paris motor show, focus on the immediate competitive pressures faced by European carmakers, his call for "Made in Europe" rules that "must reward real value creation" speaks to a far deeper strategic necessity that America would be wise to heed.
For too long, the West has allowed a pursuit of short-term economic efficiencies to blind itself to the long-term strategic vulnerabilities being created. The rise of lower-priced Chinese brands, often heavily subsidized and operating under a different set of rules, is not merely an economic challenge; it is a geopolitical one. When critical industries, from automotive to advanced technology, become overly reliant on or outmaneuvered by state-backed competitors from rival powers, the foundations of national power begin to erode.
This isn't about protectionism for its own sake, as some might glibly assert. This is about strategic self-preservation. A nation, or indeed a bloc like the European Union, that cannot produce vital components, innovate in key sectors, or maintain a robust manufacturing base, finds its options limited when geopolitical tensions rise. The COVID-19 pandemic offered a stark preview of supply chain fragility, yet many seem to have forgotten those lessons as the immediate crisis receded. The current global environment, marked by increasing instability and great power competition, demands a more proactive and sober approach.
The Pentagon and our intelligence community have long understood that economic prowess underpins military strength. The ability to rapidly innovate, scale production, and maintain a technological edge is paramount for national defense. When our industrial base is hollowed out, or when critical sectors fall under the sway of potential adversaries, the uniform experts we rely on face increasingly difficult challenges in securing our interests abroad and protecting our homeland. This isn't theoretical; it’s a tangible threat to our future readiness.
Mr. Blume’s plea for "comparable conditions" reflects a fundamental unfairness in the global marketplace, where free market principles are often selectively applied. China’s economic model, with its state-owned enterprises, forced technology transfers, and vast subsidies, is not designed for fair competition but for strategic dominance. To ignore this reality, and to allow American industries to compete with one hand tied behind their back, is not just economically naive; it is strategically negligent.
The EU’s contemplation of "Made in Europe" rules should prompt Washington to re-evaluate and strengthen its own efforts. Initiatives aimed at re-shoring critical manufacturing, investing in domestic innovation, and fortifying supply chains are not simply economic policies; they are national security imperatives. This requires more than just rhetoric; it demands sustained, bipartisan political will and targeted investment.
America must foster an environment where its companies can thrive, innovate, and lead, not just in niche high-tech sectors, but across the breadth of its industrial landscape. This means recognizing that "real value creation" domestically is a cornerstone of national resilience. Without a strong industrial foundation, our ability to project power, deter aggression, and protect our interests both at home and abroad will inevitably diminish. The lessons from Brussels, and indeed from Beijing’s long-term strategy, are clear for those willing to heed them.