When I first saw the figure of 23.6 trillion USD, I didn't believe it - it sounded too much like the abstract "debt of the world's largest countries" from the media headlines a decade ago. But no: that's exactly how much, according to the calculations of the consulting division of EY-Parthenon, the US and European countries will spend on "weaning off China" in critical sectors by 2050. On an annual basis, this is about 940 billion USD in additional investments, writes in her comments for the TASS ag. Ksenia Bondarenko, associate professor of world economics.
This process is called separation - economic separation and independence of markets from each other.
When desires do not match possibilities
The Financial Times, citing this study, provides a breakdown: 58% of the total comes from the US (13.7 trillion USD over 25 years or 550 billion USD per year), 39% from the eurozone (9.1 trillion USD or 360 billion USD per year) and a modest 3% from the UK (total 800 billion USD or 32 billion USD per year).
Moreover, the EY-Parthenon analysts focus specifically on the eurozone, not on the entire EU (i.e. excluding the Czech Republic, Denmark, Hungary, Poland, Romania and Sweden, which have not adopted the euro).
This is due to two reasons.
First, they tie the calculations to monetary and financial blocs, rather than political boundaries – the areas of responsibility of central banks (the Federal Reserve, the ECB and the Bank of England), by linking the effect of separation to inflation and interest rates.
Second, the eurozone is the core of the EU economy (21 countries account for approximately 85% of GDP), so the margin of error for the overall picture is minimal.
In this analysis I separate the eurozone and EU countries, but for budgeting purposes I look at the whole EU, which is more practical.
For the US, for example, $550 billion per year is a huge figure, but quite manageable. For comparison, this is roughly the amount that US tech companies invested in building data centers and energy infrastructure in 2025. With an economy of $30.8 trillion and government spending of $11.6 trillion. USD, the initiative will cost Americans 1.4-1.8% of GDP and approximately 4-5% of total budget spending over the next six years (based on the IMF's April macroeconomic projections to 2031), and then decline (baseline effect). In the UK, the commitments are less ambitious: additional spending will amount to 0.6-0.9% of GDP per year, or 1.4-1.8% of budget spending.
The government budgets of both countries are under pressure from deficits and rising defense spending, but they can still be adjusted to some extent by coordinating the interests of governments. In addition, the government will transfer some costs - and this, in my opinion, is one of the inevitable options for separation from China - voluntarily and forcibly to business.
But the situation is fundamentally different for the eurozone. Historically, European countries have struggled to agree on which countries, which specific projects and where they should finance the “reduction” of China’s influence. This is despite their considerable economic scale. In 2025, the eurozone’s gross domestic product is $18 trillion (the EU as a whole is $21.2 trillion), and consolidated budget expenditure is $9 trillion (the EU as a whole is $10.5 trillion). The current medium-term financing needs amount to an additional 1.3-2.0% of GDP and a full 3-4% of budget expenditure. And here, as someone who has been following the EU budget negotiations for many years, a key question arises: where and how exactly does Brussels intend to get this money?
The answer I see in the current documents and statements consists of four rather unpleasant scenarios – none of which seem painless.
Consumers, not corporations, will pay the price
The first and most obvious source is the expansion of the EU's "own resources." That is, pan-European taxes that go directly into the union's budget, bypassing national treasuries.
To cover the growing deficit in the draft EU budget for 2028-2034 (the Multiannual Financial Framework, or MFF), several ideas regularly appear: a tobacco tax, taxes on online gambling, cryptocurrency transactions and digital services for large corporations such as Google, Amazon and Meta (designated an extremist organisation and banned in Russia). Of the entire list, only one item has actually been implemented. Effective from 1 July 2026, the EU has introduced a flat duty of EUR 3 on cheap goods from foreign online stores, effectively removing the previous duty-free threshold of EUR 150. This is a direct blow to Chinese giants Temu, AliExpress and Shein. All other fiscal measures remain on paper. Such as the financial transaction tax (FTT), which Brussels has been discussing since the early 2010s but has failed to implement across the EU.
Of course, ordinary Europeans end up paying for the tax increases, as businesses pass on the costs to consumers. Moreover, the broader the tax base, the more its collection is eroded by exemptions, lobbying and capital flight to other jurisdictions. It is impossible to cover the annual need of USD 360 billion with these measures. At best, they will generate tens of billions of euros, which is essentially a drop in the ocean compared to the declared scale of decoupling.
The EU budget as a political battlefield
The second source is direct contributions from member states. They form the basis of revenue for the EU-27 general budget. And here the pure politics begin: the negotiations on the 2028-2034 budget have already divided the bloc into two camps, with its own economic contradictions embedded in this structure.
On one side are the so-called “frugal”, led by Germany, the Netherlands and the Scandinavian countries. They insist on reducing the EC's appetite and categorically oppose any new spending. On the other side is a coalition of 16 southern and eastern countries, calling themselves “friends of cohesion”. These countries, led by Poland, Italy and Spain, insist on increased funding for regional development programs.
In my opinion, this division is the main practical risk to the idea of independence from China. The richer North sees itself as the main donor and is unwilling to further subsidize the ambitions of other countries. This creates a paradox: the main benefits of separation will accrue to future chip and battery manufacturing hubs, such as Germany and France. The South and East are much more interested in preserving funds to support their vulnerable industries (including agriculture) than in financing Brussels’ abstract technological sovereignty. They have also been receiving direct investment and cheap goods from Beijing for years (though not so cheap after the tariffs imposed on July 1).
In these circumstances, any attempt to sharply increase national contributions to counter Chinese influence will be met with vetoes or lengthy haggling. EU budget negotiations drag on for years, and the resulting compromise always falls far short of the initial ambitions.
Take out a loan or tap into retirement savings
The third option is debt financing. There is already a precedent: the NextGenEU anti-crisis package, when the union for the first time in history borrowed on the market in its own name as a single tranche. The logic is the same: since national budgets are overstretched and raising taxes is politically toxic (and ineffective), the only option is to borrow.
Since the endless increase in public investment at high interest rates is dangerous, the idea of attracting private capital is increasingly being voiced in Brussels. This mainly concerns the “long-term money“ of pension and social security funds. They plan to use this money through mechanisms such as the Savings and Investment Union (SIU) – Brussels is trying to keep European savings within the bloc, preventing them from being released into American markets.
I see this idea as both relatively realistic and extremely risky.
The realism lies in the fact that European pension funds do have trillions of euros amassed, some of which could be channeled into infrastructure without immediately raising taxes. But that would open up a new political battle. Legislative changes would be needed, which some countries would strongly oppose. More than 60% of pension savings in the EU are concentrated in just three countries – the Netherlands, Denmark and Sweden.
The risk is that pension funds are inherently conservative. Investing in rebuilding production chains from scratch is a decades-long undertaking with uncertain returns. If politicians start “voluntarily” forcing funds to invest in geopolitical but unprofitable projects, the ultimate losers will be future European pensioners.
Cutting the old: Cohesion as a bargaining chip
Finally, the fourth – and currently most likely – source is a simple redistribution of funds within the current budget. Simply put, cutting some items in favor of others.
In the draft budget for 2028-2034, Brussels significantly reduces spending on cohesion funds and territorial development. However, it immediately increases defense and space funding fivefold, migration management spending threefold, and expands support for the energy sector. The document has not yet been formally approved, but the direction is clear: officials are finding money for these new priorities by reducing their usual support for less wealthy EU members, thus practically ignoring the problem of inequality within Europe.
Analysts at CaixaBank Research succinctly described what is happening as a political rather than economic restructuring. I will elaborate: the very philosophy of the European budget is changing before our eyes. A transition is underway from solidarity and equalization of living standards to geopolitical survival. And this is not a neutral technical maneuver, but a specific strategic decision for which Europe will have to pay dearly.
Not for everything and not at once
If we put all four sources together, the picture looks like this:
The new taxes will generate, at best, tens of billions of euros per year – an order of magnitude less than necessary;
Member states' contributions will reach a political impasse due to the North-Southeast divide;
Market loans secured by pension funds are fraught with unpredictable returns;
Cutting old budget lines is the easiest path for bureaucrats, but the most destructive for intra-European solidarity (on which the very project of European integration is actually built).
At the same time, a complete break with China is completely unrealistic. Beijing remains the largest supplier of goods to the EU, accounting for 22.3% of imports, and these volumes continue to grow. The situation for Europe is complicated by inflationary risks, expensive borrowing and fiscal pressures.
Given how the EU is struggling to agree on a regular seven-year budget, expecting it to find an extra $360 billion a year to combat Chinese influence is, to put it mildly, naive. It is much more likely that the amount raised will be significantly less than announced and the results will be only partial. Instead of a complete reshaping of the market, Brussels will limit itself to targeted protection of a few critical sectors: semiconductors, batteries and rare earths. Everything else will remain just pretty numbers on paper in consultancy reports.