Full Breakdown
Middle Powers Navigate the US-China Crossfire: From Coercion to Collective Resilience
5/13/2026, 11:30:04 PM
The Strategic Dilemma for EU and ASEAN Powers
EU and ASEAN powers must balance economic ties with China against U.S. volatility while preserving security.
Background: From Multipolar Hopes to Emerging Bipolarity
Optimism about a multipolar order (Tellis 2019; Elcano 2025) has shifted to analyses of effective bipolarity, with China and the United States as dominant poles (Nagy 2025; Mohan 2026a). Chinese white papers (2023) and the U.S. Inflation Reduction Act (2023) exemplify competing narratives.
Key Actors and Their Positions
- China: State Council white papers (2023) promote a “global community of shared future” and reject “hegemonism, power politics, and bloc confrontation.”
- United States: Inflation Reduction Act (2023) offers subsidies that shift green-tech investment.
- EU: Anti-Coercion Instrument (ACI) aims to counter economic pressure.
- ASEAN: Emphasizes “ASEAN centrality” while managing maritime disputes.
- Scholars: Yan Xuetong (moral realism), Cao Wei (hedging), Cui Wenxing (discourse power).
Data & Statistics: Coercion in Action
- 2021: Lithuania’s “Taiwanese” office led to a secondary boycott that forced German auto-parts firms to drop Lithuanian components from global supply chains (Goodman & Reynolds 2022).
- BRI projects tie Southeast Asian infrastructure financing to concessions on South China Sea claims (Hiep et al. 2022).
- Vulnerable supply-chain sectors: rare-earth minerals, active pharmaceutical ingredients, legacy semiconductors.
Impact
Chinese economic leverage and U.S. policy volatility threaten middle-power sovereignty, limit strategic autonomy, and raise forced-alignment risks, potentially eroding democratic institutions and destabilizing regional security.
Official Statements & Responses
- China’s State Council (2023) says its initiatives reject hegemonism, power politics, and bloc confrontation, and provide a benign, stabilizing contribution to global governance.
- The European Commission (2025) says the ACI will be operationalized with ASEAN partners to ensure “collective response…never isolates a target.”
- The United States, via the Inflation Reduction Act, notes that “subsidies are intended to secure supply-chain resilience for green technologies” (European Parliament 2023).
Criticism & Opposition
Analysts say China’s “secondary boycott” of Lithuania shows a willingness to weaponize supply chains, contradicting its benign partnership claim. European officials criticize the IRA for “drawing green-technology investment away from the continent,” exposing trans-Atlantic economic fragility.
Conflicting Reports & Gaps
Scholars differ on the system’s nature: some cite a “multipolar mirage” that offers hedging space (Tellis 2019), others describe an “enduring bipolarity” that limits middle-power agency (Nagy 2025). Evidence on the EU-ASEAN ACI’s long-term impact remains unavailable.
Verbatim Quotes
- “hegemonism, power politics, and bloc confrontation,” — State Council white paper, 2023.
- “moral realism,” — Yan Xuetong, 2023.
- “small yard, high fence” — policy recommendation, 2026.
What’s Next
The EU will pilot the ACI with ASEAN by late 2026 and both regions are drafting subsidies for alternative rare-earth and pharmaceutical suppliers. Diplomatic talks will test whether “hardened engagement” can replace the “strategic autonomy” model.
