Flashpoints | Diplomacy | East Asia

The EU is Forging a ‘Hedging Alliance’ With Indo-Pacific Middle Powers

By integrating defense industries and geoeconomic statecraft, Europe and its Indo-Pacific partners are jointly building risk-diversifying mechanisms to navigate the U.S.-China-Russia great power competition.

In April 2026, French President Emmanuel Macron stood before audiences in Tokyo and Seoul and delivered a blunt assessment of the shifting global order. Warning against becoming “vassals of two hegemonic powers,” he explicitly called on medium-sized nations to join forces, resist coercion, and form a “coalition of independents” to stand up to the U.S. and China. 

While it is easy to dismiss Macron’s rhetoric as classic French strategic culture — i.e., Gaullism, or the “Third Way” — his diplomatic tour illuminated a profound structural reality. Driven by the imperative to mitigate the dual risks of hegemonic vassalage and geopolitical abandonment, the European Union (EU) is actively forging a multilateral “hedging alliance” with a network of Indo-Pacific middle powers. 

This emerging coalition — spanning Japan, South Korea, India, Australia, and key ASEAN states — is not an “Asian NATO” designed for collective security, but an intricate web of defense-industrial synergies and geoeconomic pacts to maximize “strategic autonomy” and diversify risks from the volatile whims of Washington, the consequential leverage of Beijing, and the destabilizing aggression of Moscow.

The Catalyst: From Trump 1.0 to the “America First” Resurgence

This geopolitical awakening did not happen overnight. The seeds of this Euro-Asian strategic convergence were sown during U.S. President Donald Trump’s first term and the shockwaves of Brexit in 2016. In response, for example, the EU and Japan accelerated negotiations over their bilateral Economic Partnership Agreement (EPA) and Strategic Partnership Agreement (SPA), while European Commission President Ursula von der Leyen launched her “Geopolitical Commission” in December 2019. By 2021, key member states like France (2018), Germany (2019), and the Netherlands (2019), followed by the EU itself, had published official Indo-Pacific strategies to assert their relevance in the region.

Today, the return of a highly transactional, protectionist, and unilateralist “America First” doctrine has turbocharged these anxieties. Trump’s erratic interventions in global hotspots like Venezuela and the ongoing Iran conflict, coupled with his explicit public threats regarding the validity of NATO, have deeply unsettled American allies in both Europe and Asia. The realization that the United States might retreat from its role as the primary security guarantor has pushed European and Asian middle powers to double down on strategic autonomy, recognizing that they can no longer defer their own security planning to Washington.

Beyond the Trump administration’s unpredictability, this transcontinental alliance formation has also been accelerated by the rising threat perceptions of China and Russia. The EU’s official designation of China as a “systemic rival” now aligns seamlessly with the acute anxieties in Indo-Pacific states, such as Japan and India, over China’s military modernization and territorial disputes. Simultaneously, Russia’s war with Ukraine since 2022 shattered the post-Cold War illusion of permanent European peace, brutally exposing the continent’s military and energy vulnerabilities. For Indo-Pacific nations, the Ukraine crisis served as a stark, existential warning that the forceful alteration of the status quo is a present danger, reinforcing the widespread fear that “Ukraine today may be East Asia tomorrow.”

The Security Architecture: EU Security and Defense Partnership (SDP)

The institutional foundation of this hedging strategy lies in a novel diplomatic instrument deployed rapidly by Brussels: the Security and Defense Partnership (SDP). Departing from the rigid, legally binding mutual defense treaties of the Cold War era, these frameworks are designed to enhance military interoperability, intelligence sharing, and cyber defense without the risk of entrapment.

The EU laid the groundwork in November 2024 by signing its first two Asian SDPs with Japan and South Korea. The timing was driven by the merger of the Euro-Atlantic and Indo-Pacific security theaters — evidenced by North Korea supplying Russia with munitions and troops. South Korea has emerged as the “arsenal of democracy” for the West, filling critical artillery gaps.

Indo-Pacific leaders are actively welcoming this European pivot. During Macron’s visit, Japanese Prime Minister Takaichi Sanae emphasized that “cooperation with like-minded countries has never been more important for the peace and prosperity of our nations,” explicitly praising France as a “special partner” sharing values and principles. This formalizes what former Japanese Prime Minister Kishida Fumio articulated in 2022 following the outbreak of the Russia-Ukraine War, when he famously warned that “the security of Euro-Atlantic and the Indo-Pacific is inseparable.” Similarly, South Korean President Lee Jae-myung, who has championed a delicate foreign policy balancing act, hailed wider strategic cooperation with the EU in defense, technology, critical minerals, and other domains.

This momentum reached a crescendo in early 2026. In January, the EU signed a sweeping SDP with India, elevating dialogue on maritime domain awareness and securing critical submarine infrastructure. Two months later, Australia also signed its SDP with the EU. Notably, this agreement helps mend the deep diplomatic rift caused by the 2021 AUKUS submarine pact, which Paris famously condemned as a “stab in the back.” By formally adding the EU to its security matrix, Canberra is effectively diversifying its defense portfolio beyond its traditional reliance on the U.S. and the U.K. within the framework of AUKUS.

The Geoeconomic Glue: Weaponizing SAFE

Diplomatic agreements are merely paper without industrial backing. The financial engine of this hedging alliance is the EU’s Security Action for Europe (SAFE) regulation. Nominally a 150 billion euro loan-based financing instrument designed to accelerate European defense production, SAFE contains a highly strategic loophole engineered for coalition building.

Under the SAFE mechanism, non-EU countries that have signed an SDP with Brussels are eligible to participate in common procurement frameworks. This creates a massive centripetal pull. For South Korea’s booming defense sector, Japan’s transitioning military-industrial base, and Australia’s growing tech sector, SAFE offers a vital backdoor into the lucrative European defense market. By integrating their defense industries, the EU and its Indo-Pacific partners are actively increasing their collective bargaining power vis-à-vis Washington’s defense giants.

The hedging alliance is also focused on economic statecraft, specifically “de-risking” supply chains to break dependencies on external actors. The most glaring vulnerability for both Europe and developed Asian economies is China’s overwhelming dominance in the refining and processing of critical minerals such as rare earths (whose stricter export controls have been weaponized as geopolitical leverage against Japan).

To bypass Beijing’s grip, the EU has aggressively pursued trade liberalization with resource-rich ASEAN nations. In September 2025, after nearly a decade of negotiations, the EU and Indonesia finalized a Comprehensive Economic Partnership Agreement (CEPA) and an Investment Protection Agreement (IPA). This pact stabilizes the regulatory environment for European investments in Indonesia’s massive nickel reserves, securing the raw materials vital for the green transition and advanced military tech. Similarly, the India-EU Free Trade Agreement was also concluded alongside their SDP on January 27, 2026. By phasing out tariffs on 93 percent of Indian exports, the pact aims to provide New Delhi with the economic velocity required to counterbalance China’s regional influence, while offering European firms an alternative to the Chinese consumer market. Likewise, the “Comprehensive Strategic Partnership” upgrade between the EU and Vietnam on January 29, 2026, capitalizes on the exodus of multinational manufacturing from China, aiming to secure reliable export hubs for European electronics.

Limits and Implications of the “Hedging Alliance”

Despite the rapid institutionalization and converging threat perceptions of this “hedging alliance,” the strategy has fundamental limitations. The EU still lacks the expeditionary military capacity to serve as a primary hard-security guarantor in a high-intensity Indo-Pacific conflict (maybe except France, which possesses overseas territories and roughly 8,000 permanent military personnel stationed in the region). For frontline states like Japan and South Korea, the U.S. military presence and extended nuclear deterrence remain the irreplaceable cornerstone of their national survival.

Nevertheless, the geopolitical trajectory is undeniable. The era in which secondary powers passively accepted the dictates of hegemonic rivalry is ending. Macron’s “coalition of independents” is not merely a slogan; it is a structural reality taking shape from Brussels to Tokyo, Seoul, New Delhi, Jakarta, Hanoi, and Canberra. Previously, Canadian Prime Minister Mark Carney also captured this geopolitical zeitgeist at the 2026 Davos forum, bluntly warning that “middle powers must act together because if you are not at the table, you are on the menu.”

By binding their economic interdependence and defense-industrial bases together to forge genuine strategic autonomy, the EU and the Indo-Pacific middle powers are dramatically increasing the geopolitical costs and “audience costs” of great power coercion. In a multiplex world drifting toward chaotic fragmentation, this “hedging alliance” comprising middle powers may serve as the vital order shaper of the mid-21st-century international system. 

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In April 2026, French President Emmanuel Macron stood before audiences in Tokyo and Seoul and delivered a blunt assessment of the shifting global order. Warning against becoming “vassals of two hegemonic powers,” he explicitly called on medium-sized nations to join forces, resist coercion, and form a “coalition of independents” to stand up to the U.S. and China. 

While it is easy to dismiss Macron’s rhetoric as classic French strategic culture — i.e., Gaullism, or the “Third Way” — his diplomatic tour illuminated a profound structural reality. Driven by the imperative to mitigate the dual risks of hegemonic vassalage and geopolitical abandonment, the European Union (EU) is actively forging a multilateral “hedging alliance” with a network of Indo-Pacific middle powers. 

This emerging coalition — spanning Japan, South Korea, India, Australia, and key ASEAN states — is not an “Asian NATO” designed for collective security, but an intricate web of defense-industrial synergies and geoeconomic pacts to maximize “strategic autonomy” and diversify risks from the volatile whims of Washington, the consequential leverage of Beijing, and the destabilizing aggression of Moscow.

The Catalyst: From Trump 1.0 to the “America First” Resurgence

This geopolitical awakening did not happen overnight. The seeds of this Euro-Asian strategic convergence were sown during U.S. President Donald Trump’s first term and the shockwaves of Brexit in 2016. In response, for example, the EU and Japan accelerated negotiations over their bilateral Economic Partnership Agreement (EPA) and Strategic Partnership Agreement (SPA), while European Commission President Ursula von der Leyen launched her “Geopolitical Commission” in December 2019. By 2021, key member states like France (2018), Germany (2019), and the Netherlands (2019), followed by the EU itself, had published official Indo-Pacific strategies to assert their relevance in the region.

Today, the return of a highly transactional, protectionist, and unilateralist “America First” doctrine has turbocharged these anxieties. Trump’s erratic interventions in global hotspots like Venezuela and the ongoing Iran conflict, coupled with his explicit public threats regarding the validity of NATO, have deeply unsettled American allies in both Europe and Asia. The realization that the United States might retreat from its role as the primary security guarantor has pushed European and Asian middle powers to double down on strategic autonomy, recognizing that they can no longer defer their own security planning to Washington.

Beyond the Trump administration’s unpredictability, this transcontinental alliance formation has also been accelerated by the rising threat perceptions of China and Russia. The EU’s official designation of China as a “systemic rival” now aligns seamlessly with the acute anxieties in Indo-Pacific states, such as Japan and India, over China’s military modernization and territorial disputes. Simultaneously, Russia’s war with Ukraine since 2022 shattered the post-Cold War illusion of permanent European peace, brutally exposing the continent’s military and energy vulnerabilities. For Indo-Pacific nations, the Ukraine crisis served as a stark, existential warning that the forceful alteration of the status quo is a present danger, reinforcing the widespread fear that “Ukraine today may be East Asia tomorrow.”

The Security Architecture: EU Security and Defense Partnership (SDP)

The institutional foundation of this hedging strategy lies in a novel diplomatic instrument deployed rapidly by Brussels: the Security and Defense Partnership (SDP). Departing from the rigid, legally binding mutual defense treaties of the Cold War era, these frameworks are designed to enhance military interoperability, intelligence sharing, and cyber defense without the risk of entrapment.

The EU laid the groundwork in November 2024 by signing its first two Asian SDPs with Japan and South Korea. The timing was driven by the merger of the Euro-Atlantic and Indo-Pacific security theaters — evidenced by North Korea supplying Russia with munitions and troops. South Korea has emerged as the “arsenal of democracy” for the West, filling critical artillery gaps.

Indo-Pacific leaders are actively welcoming this European pivot. During Macron’s visit, Japanese Prime Minister Takaichi Sanae emphasized that “cooperation with like-minded countries has never been more important for the peace and prosperity of our nations,” explicitly praising France as a “special partner” sharing values and principles. This formalizes what former Japanese Prime Minister Kishida Fumio articulated in 2022 following the outbreak of the Russia-Ukraine War, when he famously warned that “the security of Euro-Atlantic and the Indo-Pacific is inseparable.” Similarly, South Korean President Lee Jae-myung, who has championed a delicate foreign policy balancing act, hailed wider strategic cooperation with the EU in defense, technology, critical minerals, and other domains.

This momentum reached a crescendo in early 2026. In January, the EU signed a sweeping SDP with India, elevating dialogue on maritime domain awareness and securing critical submarine infrastructure. Two months later, Australia also signed its SDP with the EU. Notably, this agreement helps mend the deep diplomatic rift caused by the 2021 AUKUS submarine pact, which Paris famously condemned as a “stab in the back.” By formally adding the EU to its security matrix, Canberra is effectively diversifying its defense portfolio beyond its traditional reliance on the U.S. and the U.K. within the framework of AUKUS.

The Geoeconomic Glue: Weaponizing SAFE

Diplomatic agreements are merely paper without industrial backing. The financial engine of this hedging alliance is the EU’s Security Action for Europe (SAFE) regulation. Nominally a 150 billion euro loan-based financing instrument designed to accelerate European defense production, SAFE contains a highly strategic loophole engineered for coalition building.

Under the SAFE mechanism, non-EU countries that have signed an SDP with Brussels are eligible to participate in common procurement frameworks. This creates a massive centripetal pull. For South Korea’s booming defense sector, Japan’s transitioning military-industrial base, and Australia’s growing tech sector, SAFE offers a vital backdoor into the lucrative European defense market. By integrating their defense industries, the EU and its Indo-Pacific partners are actively increasing their collective bargaining power vis-à-vis Washington’s defense giants.

The hedging alliance is also focused on economic statecraft, specifically “de-risking” supply chains to break dependencies on external actors. The most glaring vulnerability for both Europe and developed Asian economies is China’s overwhelming dominance in the refining and processing of critical minerals such as rare earths (whose stricter export controls have been weaponized as geopolitical leverage against Japan).

To bypass Beijing’s grip, the EU has aggressively pursued trade liberalization with resource-rich ASEAN nations. In September 2025, after nearly a decade of negotiations, the EU and Indonesia finalized a Comprehensive Economic Partnership Agreement (CEPA) and an Investment Protection Agreement (IPA). This pact stabilizes the regulatory environment for European investments in Indonesia’s massive nickel reserves, securing the raw materials vital for the green transition and advanced military tech. Similarly, the India-EU Free Trade Agreement was also concluded alongside their SDP on January 27, 2026. By phasing out tariffs on 93 percent of Indian exports, the pact aims to provide New Delhi with the economic velocity required to counterbalance China’s regional influence, while offering European firms an alternative to the Chinese consumer market. Likewise, the “Comprehensive Strategic Partnership” upgrade between the EU and Vietnam on January 29, 2026, capitalizes on the exodus of multinational manufacturing from China, aiming to secure reliable export hubs for European electronics.

Limits and Implications of the “Hedging Alliance”

Despite the rapid institutionalization and converging threat perceptions of this “hedging alliance,” the strategy has fundamental limitations. The EU still lacks the expeditionary military capacity to serve as a primary hard-security guarantor in a high-intensity Indo-Pacific conflict (maybe except France, which possesses overseas territories and roughly 8,000 permanent military personnel stationed in the region). For frontline states like Japan and South Korea, the U.S. military presence and extended nuclear deterrence remain the irreplaceable cornerstone of their national survival.

Nevertheless, the geopolitical trajectory is undeniable. The era in which secondary powers passively accepted the dictates of hegemonic rivalry is ending. Macron’s “coalition of independents” is not merely a slogan; it is a structural reality taking shape from Brussels to Tokyo, Seoul, New Delhi, Jakarta, Hanoi, and Canberra. Previously, Canadian Prime Minister Mark Carney also captured this geopolitical zeitgeist at the 2026 Davos forum, bluntly warning that “middle powers must act together because if you are not at the table, you are on the menu.”

By binding their economic interdependence and defense-industrial bases together to forge genuine strategic autonomy, the EU and the Indo-Pacific middle powers are dramatically increasing the geopolitical costs and “audience costs” of great power coercion. In a multiplex world drifting toward chaotic fragmentation, this “hedging alliance” comprising middle powers may serve as the vital order shaper of the mid-21st-century international system. 

Dr. Shao Jingkai is a lecturer at Shanghai International Studies University. He received his Ph.D. degree in International Relations from Waseda University in Tokyo, Japan.

EU Security and Defense Partnership (SDP)

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