The Summit of Three Crises: Europe’s Strategic Autonomy Push at a High-Stakes G7

In this week’s episode of What Comes Next, Host and TAG Senior Advisor Mira Rapp-Hooper sits down with TAG Managing Principal Belma Ambrose to unpack a consequential G7 summit unfolding amid three overlapping crises: the war in Iran, the war in Ukraine, and a fragile global economy. They explore how Europe is recalibrating its relationship with the United States, why energy security is overtaking climate as the dominant policy frame, and how China is shaping the summit’s economic agenda — from overcapacity to critical minerals and AI governance. Belma also explains where businesses should watch for opportunity as Europe moves faster on defense and trade diversification. 

What Comes Next with Mira Rapp-Hooper is produced by Rivan Dwiastono, executive produced by Lauren Dueck, with editorial input from Prashant Jha. It contains music by Cody Martin via Soundstripe. 

What Comes Next is a production of The Asia Group, and is powered by TAG AI, TAG's geopolitical decision engine for businesses.

Transcript

SPEAKER_00 0:00

So Evian now becomes uh the summit of three crises. You've got Iran, you've got Ukraine, and then more broadly than that, the global economy and the strains that we've seen from the uh war in Iran, of course.

SPEAKER_01 0:19

With the leaders of the G7 countries preparing to meet in Avian, France, my next guest is perfectly positioned to talk us through their agenda. Belma Ambrose has recently joined the Asia Group as a managing principal focused on European markets. Throughout her career, Belma has been a strategic advisor to major companies the world over with a focus on the European Union and the United Kingdom. Let's give a listen. Belma Ambrose, thanks so much for joining us on what comes next. Thank you for having me, Mir. I'm very excited to be here. Well, our conversation is aptly timed, and we're thrilled to have you on board with us at TAG as just a wellspring of Europe expertise. Because, of course, uh the leaders of the most developed economies are getting ready to meet once again in the G7 format. It's of course been an incredibly consequential year in transatlantic relations, um, often with some difficult spots. Uh of course, the two sides had to move through some significant trade friction. Um, there was then sort of a standoff over the issue of Greenland and how the United States was asserting rights to it. And of course, um, they've since found themselves uh in the throes of a US war with Iran that has significant implications for Europe and European markets. Uh, but there are also uh some real sort of political and legacy issues looming as we head towards this next G7. Of course, it's Emmanuel Macron's final G7 summit as the leader of France. Um, and Europe, amidst all of these changing dynamics, seems to be on a real push towards strategic autonomy from the United States in a way that resonates with things that Macron has been saying for much of his political career, but now seem to be coming more true in reality. Talk to us a little bit about the dynamics that you're expecting to see when Trump meets with these other leaders of the G7 and what they are looking to get out of this meeting.

SPEAKER_00 2:18

Thank you so much, Mara. Um, so I'll begin in 2003, if that's all right. Um so that's the last time that Evian hosted um what was then the G8. Um, but there are some commonalities to what we're seeing today that we saw in 2003, which is the Iraq War was a few months into uh happening. You had President Chirac at the time seeing himself as someone who could bring President Bush back on side in what was a particularly um uh unpopular uh decision by the then administration. So you fast forward to today, to 2026, and you know there are certain parallels, not just physical. Um, we're all in the same town, the same hotel. Um, but once again, an American war in the Middle East, um, an unpopular one, um, not uh agreed to or for that matter consulted with European allies. Um, and once again a French president trying to do some damage control um on behalf of uh the group. The difference is that the job seems to be harder this time. Um, France is weaker, Europe is more divided, and as you say, Macron's last as president. Um, so he's certainly going into this, thinking about um his legacy, the legacy of the G7. Um and uh with those two points in mind, he really needs to make it work. So, what's the core dynamic that Trump is walking into? Um, well, one, if he walks into it. Um I would say that you know, you know, Europe has stopped debating um where it stands or what the relationship with America can be and whether it can be fixed, but it needs Trump in the room. And so what we found is that the summit itself, um particularly with Macron at the lead, is very focused on pleasing uh President Trump, ensuring that um the dates work for him, uh, his birthday, the UFC uh fight. Um, you know, we've all seen the scaffolding go up at the White House. Um, you know, Macron may host uh dinner at Versailles, there might be a golf trip somewhere uh in there as well. Um, this isn't just about protocol now. This is certainly about um how the French team, how Paris has made a calculation that um without Trump there is no G7 worth holding. Um and the main concern at this point um with regards to what they want to achieve and what needs to happen, it's not simply about the communique. It is that Trump shows, Trump stays, and we don't have a repeat of Canada, which we saw the president depart early last year. Um the stakes are further stacked, Zelinski is uh expected to attend. Um Evian now becomes uh the summit of three crises. You've got Iran, you've got Ukraine, and then more broadly than that, the global economy and the strains that we've seen from the uh war in Iran, of course. Um the autonomy push, as you as you rightfully mentioned at the top, um, Europe has certainly moved faster on defense than it has since the Cold War. Um, we've seen that Germany has now published its first standalone military strategy. Um, the EU is putting real money behind uh rearmament. Um, and then beyond the transatlantic dynamics, kind of the concerns around Trump and what can be achieved with him in attendance, is that there's an effort by this pres by President Macron to change the frame of the G7 by inviting India, um, South Korea, um uh Brazil, Kenya to attend. And this is a deliberate multilateral strategy, bringing multilateralism back to the table. So we're seeing kind of a widening of the bench, um, some of something of a G7 Plus uh alliances to correct what is in so many ways being seen as a uh you know a set of issues that maybe the seven members can no longer address uh solely. And it certainly mitigates the other risk, which we talked about at the start, which is um around President Trump's attendance. If the transatlantic talks fail, or if there's a decision whichever way to depart, or or whatever you want to say on this, um, you've still got space for outcomes um to be achieved through these alternative um options here.

SPEAKER_01 6:52

The the G7, oh, so first of all, that was a great lay down, and I love your calling this G7, the sort of the summit of three crises. It's a it's a great frame. Um I also really like the way you're talking through Belma usefully, the sort of G7 Plus framework in this context. Um, because just to take us back several years ago, this was something that Boris Johnson really pushed for under his leadership of the G7. Um when I was serving in the Biden administration, we were very enthusiastic about this format. Yeah. Um, we're very encouraging a fellow G7 members to keep it up. Um, and I know for some of those members who've been invited fairly consistently to be among those plus, such as South Korean India, there's a hope that this structure itself could be made permanent in the sense that maybe there's a standing set of invitations to plus members, or that, you know, there could be a consideration eventually given of expanding the membership. But of course, the conversation I'm referring to took place in the context of significant US leadership and enthusiasm for the G7. What you're talking about now is in some ways a strategy that looks quite a bit like what we were doing a few years ago, but it is in some ways a hedging strategy, um, both for and against the United States, right? If you have the throwaway of a Naranda Ramotti in the room, then the percentage of global GDP that remains, even if President Trump departs early, is significantly more. But it also introduced maybe some free radicals into the system. Of course, we know that there's been a storic downturn in US-India relations over the course of the last year after kind of a 30-year investment in building those ties. Um, so there is a possibility that there could be additional friction uh introduced, or at least um considerations introduced by those plus members. But I think really useful to think about multilateralism as a hedge against unpredictability in this moment.

SPEAKER_00 8:49

Absolutely. And I think one of the other points to watch, directly linked to your point about the hedging, um, is the the 4P, so the Paris Pact for People and Planets. So that's France's push on overseas development assistance, which you know, we've seen some real decisions impacting what's available and what is being distributed from the United States point of view. Um the UK in particular has also made decisions to cut its aid funding in support of defense spending. Um and I think with India, Brazil, uh, and some other countries kind of at the table, it does bring uh potential outcomes. Uh, again, when we look at what will be achieved when the summit wraps up, what's been agreed, that hopefully there is something that comes about from having those free radicals in the in the room and um where the G7 can be relevant. Um there's one point that I actually had planned on getting, which I'm gonna get to now, which is uh Sam Altman is going to be at the at the summit.

SPEAKER_01 9:56

Of course, yes.

SPEAKER_00 9:57

And so, you know, we talked about uh AI. You have um India, as I say, just hosted the summit. South Korea was the first out of the gate after the the Bletchley um uh summit. So the first AI summit, which was held in the UK, was subsequently co-hosted by South Korea and the UK in the following year. So you have some real players in the room where there are outcomes that uh we can really kind of watch out for when the summit does wrap up, because those radicals are coming in and um presenting some interesting dynamics to absolutely.

SPEAKER_01 10:31

So on that great point, Bama, what do you think we can expect on AI?

SPEAKER_00 10:35

Uh that is a great question. I I don't quite know, other than we should frame it in context of China. China's not in the room. Um so having one of the biggest, um, not American, but global AI companies in the room, um, alongside uh major players like India, like South Korea, like the US, discussing AI governance, discussing uh energy and um energy exposure and data centers and everything that needs to come into uh come online. I think the interesting point is that it's being done outside of a conversation with um with China.

SPEAKER_01 11:12

Absolutely.

SPEAKER_00 11:13

I have so many caveats, so we'll we'll but I'll add one more because we were talking about this at the at the start before we started recording, which is you know, what Macron wants out of all of this. Um Macron always likes center stage, so we'll we'll kind of we know that that's part of it. Um but certainly, you know, when he speaks for Europe, he speaks for France. Um whether he likes that perception or not, um, that is how it plays amongst his uh other leadership, other collaborators in Europe. Um, and so it'll be interesting to see how the the summit can how his leadership at the summit continues to play with leadership in Rome, leadership in Berlin, um, and and of course with the EU there as an observer.

SPEAKER_01 12:01

Well, it it's a great um point. And and you actually just mentioned a moment ago, you know, the issue of um discussions with Sam Altman, including about energy, not just in the AI context, but I want to pick up the energy thread and ask for your take on how you think the Middle East energy crisis is going to play at this G7 and what the sort of key considerations are for the European leaders. Of course, as you already mentioned, um, there is a lot of agitat over the ongoing war with Iran, which of course is very much ongoing. Um, you know, declarations of uh sort of an end to the world war were clearly premature. Um, and we've seen hostilities um continue to erupt in recent days. The fact of this energy crisis, of continued European dependency on the Middle East for uh oil and gas, and the fact that there isn't an easy way to replace uh those commodities that flow through the Strait of Hormoons and they have an effect on secondary and tertiary commodities and inputs as well, um, is quite a conundrum for Europe, has kind of accelerated this push for strategic autonomy, even though I think uh, you know, there are countries in the world where the crises are actually far graver, such as in South Asia or Southeast Asia. Talk to us a little bit about what the conversation has been like in Europe in the last couple of months on energy and what you think this G7 is reasonably positioned to try to say on the question.

SPEAKER_00 13:36

Yeah. The dependence has certainly exposed um the sorry, the dependence has been exposed for some time, I would say, um, just from an energy uh point in Europe. Um, but we now see that there's kind of further incentive to move as quickly as possible towards autonomy. If we keep on kind of the energy shock and the relationship with the US, um, you know, European gas prices have gone up about a third uh since the start of the war. Um that's coming off of a cold winter, uh gas shortage, kind of five-year lows on um uh gas storage. Um we can say what we like about the impact on the European economy from there. Uh but it's it's a much far deeper problem for the Europeans. Um, Europe traded Russian dependency for American dependency uh on American LNG following the start of the war in Ukraine. Um and you know, at current prices, uh, Europeans are paying a whole lot more for what it would have otherwise been uh you know, priced in from a US perspective. Um so in many ways, those European consumers are paying the budget for this administration's efforts in the Middle East, and they're not particularly happy uh about that. I think in the short term, it's there's not going to be much change on Europe's dependence on Washington, whether that's in relation to responding to policy or certainly when it comes to energy. Um, they will buy more American gas this year rather than less. I think in the medium term, and this plays into uh I think some of the some of the other con the rest of the conversation that we're going to delve into, which is uh it's changed the language in Europe when it comes to energy. Leaders no longer talk about climate or climate change or climate leadership. They talk about energy security. And uh that includes renewables, grids, nuclear, storage. Um, and those are being treated as security projects rather than climate projects. And I think that's just something that we're going to keep watching from here.

SPEAKER_01 15:43

This is a great point, Bellman. I just want to underscore it for a moment because I do think that's actually something that's already happened here in the United States as well, and is likely to be with us for a long time to come. I think there's both um an understanding uh that some of the targets that we set through multilateral uh climate diplomacy are increasingly difficult to reach, but also a sense that the whole issue of climate change and being bought into it as an existential crisis has been politicized across the developed world in some really fundamental ways. And that what kind of sells across major political parties most of the time is energy and energy security. Um, and especially the critical role that the private sector plays in all of that. Uh so I think you're absolutely right to footstomp the kind of move away from climate as the headline and move to energy security as a fundamental security issue. So that's helpful to look out for in the context of the G7. In staying with sort of the security push and questions about European autonomy for a minute, um, you know, we know that Emmanuel Mekron has said for years that he doesn't want the G7 to become an anti-China club. Um, but as you mentioned, uh, of course, it is the meeting of major developed economies that does not include China. And over the course of the last many years, uh it has gone from a venue in which China was kind of sotovoche as an objective of much of what was being discussed, uh, to becoming quite explicit in terms of G7 members doing things like creating an economic coercion mechanism that's very clearly intended to push back against China's excesses. The whole summit's economic agenda this year, whether we're talking about trade rebalancing, critical minerals, industrial overcapacity, AI governance, all has a significant China component without naming China. And you've already spoken about this in the context of AI. On top of that, over the course of the last year, since the United States has had its new tariffs against China in place, Europe is now facing another onslaught of Chinese overcapacity. Um, and I heard recently um when I was traveling through the region, European leaders referring this to this as sort of the second China shock. Um, because there's a feeling of so many Chinese goods flooding European markets anew and potentially really endangering uh critical European industries, including uh industries that contribute to energy security, as we were just talking about, right? So there is now, as I understand it, this real push amongst many EU leaders and within the European Commission to take quicker action on China in the economic space. And I wonder if you can tell us a little bit more about what you think is over the horizon when it comes to European policy in general on the economic challenges coming from China, as well as how you think this G7 is going to address those issues.

SPEAKER_00 18:53

Yes. Um, so I'd say, you know, just on kind of trade, if we just start there, um, Washington has become a damage control strategy always. Um, but for the rest of the world, their European leaders are really looking at where can we find the next trade deal, where can we reach an agreement quickly. As you say, speed is is now part of the agenda. Um, we've seen lots of this kind of happening over the last six months. Um we start in January. You've got first Mercosur, which took 25 years of talks to uh to get wrapped up quite quickly and to go into provisional application um just this past May 1st. Um January again, you had the deal with India, which uh Ursula von der Leyen called you know momentous, uh I don't or some version of uh of uh of that. The mother of all deals, sorry, there we go. I remember it now. It's even better. It's even better. Um and uh you know, you've got Australia where conversations have just been wrapped up uh and uh you know it then moves into kind of further triage. So I think as far as the Brussels that we've come to know when it comes to trade deals, I think the last couple of months are have a few data points that we can really turn to as to the seriousness of the commission in particular to hedge on both fronts. One, America as an uncertain partner, sorry, and then of course China, as you say, and overcapacity and um the issues that are playing out on the ground when it comes to autos, when it comes to uh, as you say, kind of on the energy side and in many other ways. Um so there's the speed aspect. Um, but then there's also, with no surprise, when it comes to the EU, which is you know an effort to be more open abroad, but certainly not so much uh more locally. And so I think uh with the commission signing kind of the deal, uh signing a doubling steel tariffs uh on uh Chinese uh overcapacity, I think you're just going to see a development around openness abroad and uh ensuring uh coverage uh at home. So for businesses, I think the takeaway from I'd say the G7, but more broadly on European strategy is finding growth corridors where Europe hadn't potentially moved as quickly as possible in the past. Um we mentioned India, uh mentioned Australia, uh, but Southeast Asia as well, the deal with Indonesia, which was announced at the end of last year, um, and then of course South America with Mercosur, which again, 25 years later, here we are. Remarkable. Um I think on more broadly on anti-China and what to, or the anti-China club and what to expect um in EVAN. Uh overcapacity, as you say, is on the table. We're talking about global imbalances, we're talking about non market practices. Um, and so I think in in so many ways we would expect some language on trade rebalancing uh when the summit uh comes to a wrap on critical minerals. Um, I think this is an area where. Trump and the Europeans do agree. So we can expect some joint initiative perhaps on sourcing or stockpiling or financing. AI governance, we've talked already about, but I think one of the more interesting things, again, looking at it from a European perspective, is what Brussels does after the summit. So the overcapacity instrument, a tool to restrict Chinese access to whole sectors. We'll expect an economic security package in September, so we'll have to see how hard that lands after after Avion. I guess the last point and the fear for Europeans is a G2, Trump and Xi cutting deals above European uh leadership's head. Um it can cut two ways. And uh I think for many European leaders out of this summit, it's really about how do you uh set up for the enforcement, but how do you watch your language and ensure that um you're you're communicating uh your position in the most diplomatic way between two quite uh volatility, maybe on one side, um, but certainly two quite strong and uh well-placed uh leaders to to act on anything that they don't uh they don't agree on.

SPEAKER_01 23:19

Absolutely. It's a it's a fascinating set of dynamics. Um and again, this was sort of a key theme in the conversations I recently left in Europe. Of course, if you rewind just several years, it was the United States sort of perpetually pushing European partners and the EU to do more on China to get tough. Um and I would say Europe really did and has stepped up, and and the EU itself, I think, um, has really played an admirable role, uh, none more so than Ursula von der Leyen personally. Uh but in a world in which the United States is seeking a rapprochement with China, evidently, um, and even if it's only in the short term, that raises some real questions for Europe as to what their posture should be. We've, of course, seen a significant number of European leaders parade through Beijing this year, trying to figure out what their own calibration is going to be. And you might expect in this environment potentially some significant softening in Europe. But then at the same time, you see this influx of additional overcapacity and all these measures being taken by the commission in Brussels, at least in principle, that are really quite significant. Um, so I think this will just be fascinating to watch the calibration and recalibration over the course of the next many months, um, because there will clearly be a lot of European eyes on Washington and Beijing, um, but also a lot of focus at home and sense that even if the United States appears to go a little bit wobbly on China, Europe has to deal with the economic threats that are already inside its borders. Yeah, that's right. So, with that, I think, you know, you've given us so much to think about. And we've talked about some really big important trends, you know, namely this push towards European autonomy, which I think is more um more articulated, and many in Europe are much more resolved about the idea of relative autonomy from the United States. As you say, they've sort of passed the conversation in which they evaluate their common interests and how workable things are with the United States, and they're really trying to move together. But there are still a huge number of stumbling blocks and issues of implementation when it comes to further European integration and prioritization of shared sectors like the defense sector. When you think about Europe in the next few years, uh what are the sectors and the geographies that you think pose the most opportunity to business? You've already shared with us, I think, a great insight, which is to look for new corridors of cooperation where they didn't exist before, as in through new trade deals like EU, Europe, strikes me as a great one to think about. But of course, there are entire sectors where we're likely to see big action. You know, for my money, I think the European defense sector is super interesting. Um, and one of the things that I know I'm watching for is how European leaders begin to sort through what it means to do European defense collaboration according to comparative advantage. For example, it does not make sense for, you know, many European countries to be making tanks, but Europe does have a lot of potential when it comes to the drone industry and applications of AI in defense technologies. And of course, we now know from both the Ukraine war and the Iran war that this is the new way of war. So when you think about sectors including defense, what really lights up for you as opportunities in this space?

SPEAKER_00 26:46

I, you know what, if it says strategic anywhere in the in the in the titling, um, I think uh position for that. Um I think defense, as you say, it's not it's not so much should I be in European defense as where? Um so drones, uh defense AI, defense tech, um, ammunition capacity, the supply chains behind them. Um I think for American firms, it's a very interesting time uh to try to navigate your European rearmament, um, particularly because of the bi-European rules. Um, you know, we've always talked about Americans in Europe in particular, we've always talked about American firms need needing to Europeanize. Um well, now's the time uh to have a European footprint. Um for American firms, it's about acting now and not later. That said, um even the British are having a hard time getting into that, into that space. Um so uh British firms now are being uh positioned as minority suppliers to um EU-funded projects. So really those by European rules are very real. And um, even if the Brit the British can't get in, I think for American firms it's going to be another another hurdle to really think about. Um and and also for those partners, for those um uh in those trade agreements, kind of really thinking through where did they plug in and how does that play out. Um I think energy, of course, uh we started uh we started the conversation in some ways there. Uh it's all about cutting import dependence. Um so if you're a uh a business, you're really thinking about where you can plug into grids, where you can plug plug into nuclear, where you can plug into renewables. Um, so really treating this as a very strategic security sector. And um, you know, that means faster permits, that means more public money. Um we talked about critical minerals, I think mapping out your minerals exposure now. Um and you know, again, if that is an area where there is policy agreement between Europe and DC, then that is certainly a space to really think about how to um how to plug in as the rules are tightening. Um we talked about overcapacity, autos, steel, chemicals. Um European protection kind of cuts both ways on this. Um, so trade policy is a huge issue. It's a board issue as we've all come to think about uh trade in the last, I would say few years, but decade, decade and a half, longer than that. Um, and then geography. Um, money is flowing into frontline Europe when it comes to defense. So to kind of start there and end there, um, Poland, the Baltics, um, the Czech Republic, even Germany, uh really thinking about those markets and where the opportunity might come from from there. So I'd say every client has their, or every company that, you know, Asia Group works with, and um every company out there that has exposure from a geopolitical risk perspective, you know, there's there's a lot happening across the EU 27. Um, I think the G7 summit is another point of context to keep in mind as you're navigating your uh exposure in those markets, or opportunity for that matter. Um, and so we'll we'll kind of see what comes from here.

SPEAKER_01 30:11

Belma Ambrose, terrific discussion. We look forward to debriefing with you on the other side of the G7.

SPEAKER_00 30:16

Thank you so much.

SPEAKER_01 30:18

As I reflect on my conversation with Belma, I'm struck by just how much European leaders have on their plates as they determine what to prioritize in their push for relative strategic autonomy from the United States. Of course, we know that they're prioritizing their defense sector and other strategic sectors like the energy sector. But when it comes to pushing back and shielding their economies from threats that are still inbound from the PRC, this is a momentous task that it will be challenging for the EU to take up if, of course, it does not have perfect consensus from all of its member nations. I'm also struck that European leaders are juggling the question of how to push for strategic autonomy and independence, all while they're watching a rebalancing of the US-China relationship. For them to get this right, this is going to take intense calibration, focus, and coordination over the course of the next many months. What comes next is produced by Rivan Duyastino and executive produced by Lauren Dewick. It contains music from Cody Martin via Soundstripe. What comes next is a production of the Asia Group and is powered by TAG AI, Tag's geopolitical decision engine for business. We'll see you on the next episode.