Lithuania has become a battlefield between the US, the EU and China

The new German Foreign Minister Annalena Baerbock made her first visit to Washington, where she met with US Secretary of State Antony Blinken. The main issue of their negotiations was the potential "Russian-Ukrainian conflict". However, Blinken also introduced another topic, which Baerbock – unlike the discussion of Moscow - supported extremely reluctantly.

In his opening remarks at a joint press conference, the Secretary of State mentioned China and Lithuania. "We are directly concerned about the Chinese government's attempt to intimidate Lithuania, a country with a population of less than three million people,” he said. “China is forcing European and American companies to stop manufacturing products with components manufactured in Lithuania, or to risk losing access to the Chinese market, and all this because Vilnius has decided to expand cooperation with Taiwan.

And here we are talking not only about Lithuania, but also about the fact that every country in the world should be able to determine its own foreign policy, free from this kind of coercion. And the United States will work with our allies and partners, including Germany, to counter such intimidation from China."

As for Baerbock, in her response, she limited herself to the following: "It is obvious to us that the most important global issues, challenges, such as the climate crisis or the pandemic, can be solved only in cooperation with China. At the same time, we must steadfastly defend our values and uphold them. As the new German government, we focus on a joint policy towards China and in close coordination between the EU and the US, and we consider this a key and decisive factor."

The minister used the word "Lithuania" only after a direct question from a correspondent of the Washington Post, the unofficial mouthpiece of the US State Department. The journalist asked what Germany and the European Union can do to support Lithuania in its conflict with Beijing. Baerbock's answer: "We, the Europeans, stand in solidarity with Lithuania." Obviously, this is not at all the reaction that was expected from the head of German diplomacy in Vilnius and Washington. But in this case, Baerbock worked out a position prepared in advance in Berlin and could not have done otherwise.

Relations between Beijing and Vilnius began to deteriorate after the cabinet of Saulius Skvernelis resigned following the Lithuanian Seimas election in October 2020, and the new winners, the leaders of the Fatherland Union, the Liberal Movement and the Freedom Party agreed to form a ruling coalition. Ingrida Šimonytė became Prime Minister, and Gabrielius Landsbergis received the post of Foreign Minister.

The Šimonytė–Landsbergis alliance quickly began to pursue an anti-Chinese policy. In the winter of 2021, Lithuania withdrew from the "17+1" format, which unites the countries of Central and Eastern Europe (CEE) and China. After that, Vilnius announced the strengthening of ties with Taiwan. The culmination was the decision of the Lithuanian government to open an official representative office of Taiwan, after which China lowered the level of diplomatic relations with Lithuania and took a number of economic sanctions measures.

It was obvious that Vilnius was implementing the American policy aimed at squeezing Beijing out of the CEE, which also affected relations between China and the EU as a whole. All this time, the Šimonytė–Landsbergis alliance received direct support from Washington and Taipei. When Chinese businessmen began to terminate contracts with Lithuanian partners, Taiwan promised Lithuania that it would invest about $200 million in its industry and open a semiconductor manufacturing enterprise in the republic.

Thus, Vilnius could count on the fact that it would compensate for the losses from trade with China with Taiwanese injections. However, Beijing has taken unusual measures. It began to block the supply of European goods if they were produced in Lithuania or made with components from Lithuania. First of all, it hit German manufacturers, who started talking about the possibility of withdrawing their capacities from the republic.

The seriousness of the situation for Lithuanian business is evidenced by the fact that the Lithuanian Confederation of Industrialists (LPK) recently announced its intention to draw the attention of the Organisation for Economic Cooperation and Development (OECD) and the World Trade Organisation (WTO) to China's "illegal actions" against Lithuanian entrepreneurs.

According to the LPK, more than 130 companies cannot ship goods to China, hundreds of containers are stuck in Chinese ports and they cannot be redirected to other countries. Moreover, it is difficult for Lithuanian companies to buy raw materials in China, even if it is ordered by another European country, if it is known that Lithuania will be the final recipient. Chinese partners shy away from cooperation, cancel orders, do not renew contracts and do not sign new ones. Sales of Lithuanian products are falling, and China is putting pressure on international companies operating in Lithuania to stop cooperation with this country.

From a political point of view, the course of the Lithuanian Confederation of Industrialists suggests that Vilnius failed to get the approval of its anti-Chinese policy from the European Union. Neither Brussels nor the leading EU member states wanted to enter into serious dialogue with the Chinese leadership to resolve the conflict. As was previously noted by the RUSSTRAT Institute, "the Old World will not extract any geopolitical benefits from the enmity with the Middle Kingdom”. In addition, the adventurous course of the Šimonytė–Landsbergis alliance, separate and pro-American, split the Lithuanian political scene. Lithuanian President Gitanas Nauseda publicly criticises it.

However, Vilnius relies on Washington. And there they expect that they will be able to convince the European Union to rally around "little Lithuania", because if China manages to "defeat" it, then it will receive a master key for breaking into all of Central and Eastern Europe. In this situation, it is important for Beijing to pursue a subtle and cautious policy so that the bilateral conflict does not reach the stage when Brussels will be forced to bring it to the level of the entire European Union.