As one of the world’s three biggest economies — and its largest single market — the European Union has the size and capacity to act as a major geoeconomic power.

Among its strengths, the EU accounts for around one-sixth of global trade and economic activity and has deep investment ties with the other two biggest economies, the United States and China.

Yet this level of interdependence is both an asset and a risk. While it has allowed Brussels to punch above the weight of individual European capitals vis-a-vis Washington and Beijing, it also leaves the EU dangerously exposed to the fallout from heightened U.S.-China economic tensions.