Anchal Vohra is a Brussels-based international affairs commentator.
A few days after a Chinese ship was suspected of severing two telecommunication cables in the Baltic Sea last November, Lithuania expelled three Chinese diplomats. And this wasn’t the first time this small Baltic nation has stood up to the Asian giant either.
Over the last few years, amid accelerating global competition between Beijing and Washington, Lithuania has become a David daring Goliath. The country has been ready to reveal the dark side of overdependence on Chinese imports and investment, while major European economies tread more cautiously to not upset trade ties with the second biggest economy in the world.
It’s a “bold” policy “not quite aligned with other EU countries,” Raigirdas Boruta of Vilnius University’s Eastern Europe Studies Center told POLITICO. And a key objective of the policy is to keep the U.S. focused on European security.
Essentially, Lithuania’s hoping to curry favor and keep U.S. President Donald Trump committed to transatlantic defense by being the first to catch the mood in Washington and make its anti-China stance clear. But will the country succeed in winning him over — and converting its fellow EU members?
Lithuania has been in China’s crosshairs for several years now, perhaps since 2013, when it hosted the Dalai Lama and expressed solidarity with Tibet. Still, for a while, relations remained cordial and trade between the two countries multiplied. That is until 2019, when Lithuania worried its economic progress might be coming at the cost of national security.
Vilnius was worried that by giving Beijing access to its only deep water port, it would be handing a Russian ally a foothold in the country and strengthening an anti-European autocratic alliance. So, while China gained access to some of Europe’s key strategic assets by investing in ports all over the continent — from Germany and Belgium to Italy and Greece — Lithuania rejected a Chinese proposal to invest in the Klaipėda port.
The country’s politicians suspected Chinese money was a trap — a security threat to NATO. “We can’t afford that China controls Klaipėda port,” said then-Defense Minister Raimundas Karoblis. Beijing could “create obstacles for the arrival of military cargoes, military equipment, reinforcements” at times of crisis, such as a war with Moscow.
But the inflection point came later, in July 2021, when Lithuania approved the opening of a Taiwanese representative office in Vilnius, which China interpreted as a challenge to its claim over the island. In response, Beijing recalled its ambassador and downgraded diplomatic ties with Lithuania, while also deploying coercive economic tactics and imposing an unofficial trade embargo.
China deleted Lithuania from the customs list, delayed or refused to accept Lithuanian products — and even European products if they had Lithuanian parts. “Chinese customs statistics show that trade from Lithuania to China dropped 80 percent from January to October 2022 as compared with the previous year,” said Tomas Janeliunas, an international relations professor at Vilnius University.
“According to the EU, China failed to prove that these bans were justified,” so the bloc was quick to show Lithuania support, Janeliunas added. It launched a dispute at the World Trade Organization (WTO) against China’s coercive practices in response to Lithuania’s sovereign decision on Chinese investments.
Lithuanian experts also believe their country’s experience encouraged the EU to adopt a bloc-wide framework for screening foreign investments, as well as its Anti-Coercion Instrument, which allows for raising tariffs and imposing other restrictions to punish bullying. “The EU and its Member States have become the target of deliberate economic pressure in recent years,” the European Commission noted as it announced the instrument.
And yet the EU is far too reluctant to take on Beijing.
“It is quite unrealistic that any EU country would follow Lithuania’s example, if we take into account the economic interaction,” Boruta said. “Lithuania had minimal trade with China, but with other EU countries, the situation is different.”
Indeed, the EU and China carried out trade worth $762 billion last year, with most goods imported to the EU in 2023 made in China. And even with such a large dependence, which is subject to economic coercion, EU members are moving at a snail’s pace to diversify supplies.
According to a Rhodium group report, “China gained more ground in the EU’s import share than any other country between 2017 and 2023, rising from 22% in 2017 to a peak of near 27% in 2022, and then leveling off to 25% in 2023.” Though the report also noted EU diversification could pick up as “investment continues to flow to ASEAN and other “alt China” destinations, “increasing their production capacity and diversification in the longer run.”
The EU faces another conundrum too: It doesn’t yet know if adopting a harsher tone with China would please Trump or not — particularly since the U.S. president sees allies and enemies through the same lens, threatening to impose debilitating tariffs on both.
Meanwhile, in a recent phone call with European Council President António Costa, Chinese President Xi Jinping suggested it isn’t Brussels that Beijing is competing with.
According to Xinhua news agency, Xi said China and Europe have “no fundamental conflicts of interest or geopolitical contradictions,” and that he sought “common ground” to conduct business. “China-EU trade rises by 1.6% in 2024, largely resilient despite some trade spats,” read the caption of Chinese daily Global Times.
There’s even some dissatisfaction in Lithuania now over going it alone, and there have been calls to at least resume diplomatic ties.
Still, Vilnius hopes that at the end of the day, it’ll prove to have been prescient. But whether that’s the case will party depends on how Trump reacts. Will he reward Lithuania’s loyalty by offering assurances on any external threats it might face?
We’ll have to wait and see.