But when it comes to assessing Meloni, the transatlantic community would be well advised to do its homework and embrace her leadership. Her actions have clearly demonstrated a pragmatic and unambiguous values-based commitment to the transatlantic relationship. It is what she does that matters, not what others say about her.

On July 27, Meloni will travel to the White House to meet with US President Joe Biden. Her visit comes as Italy prepares to take up the presidency of the Group of Seven (G7) next year, a critically important role given today’s geopolitical events. So what can Biden expect from the Italian leader on the important issues of the day?

Italy backs Ukraine’s fight for freedom and democracy

Meloni has kept Italy clearly committed to the pillars of the EU and the transatlantic community. She has been unambiguous in her stance against autocracies. Even more notable, she has been vocally supportive of Ukraine and clearly holds Russia accountable for its unprovoked aggression. The clarity of her position contrasts with the sometimes more ambiguous positions of other Italian coalition parties.

Under Meloni’s leadership, the Italian government has continued to back Ukraine against Russia with military aid. Indifferent to low public support for military aid for the effort—just 39 percent of the Italian public voices support for increased military aid for Ukraine—she has underscored the just cause. During a speech in the Italian Senate in March, she said, “The Ukrainian people are defending the values of freedom and democracy on which our civilization is based, and the very foundations of international law.” She added, “military aid was needed to help a nation under attack.” Meloni’s Fratelli d’Italia party, along with center-right coalition parties Lega and Forza Italia, have voted consistently in support for Ukraine, even when in opposition during the government of former Prime Minister Mario Draghi.

Will China’s Belt and Road continue to lead to Rome?

Another important area of Italy’s strategic dialogue with the United States will be the issue of transatlantic coordination on China. Italy became the first and only G7 member of the Belt and Road Initiative (BRI) in 2019, when it signed a Memorandum of Understanding with China. The populist coalition government promised new trade and investment, a well-received message at the time, but the economic benefits have not come to fruition. 

Calling Italy’s membership in the BRI “a big mistake,” Meloni has indicated that she may not extend the agreement in 2024. With 51 percent of Italians holding a negative feeling about China, it may be easier for Meloni to join in a coordinated transatlantic decision on BRI.

The 2008 global financial crisis created massive opportunities for Chinese investors targeting stressed companies in search of technologies, innovation, and markets. In 2022, Italy was the second-largest import partner in Europe (behind Germany) for importing Chinese products, to the tune of more than fifty billion dollars. On the flip side, Italian exports to China make up less than 3 percent, or only eighteen billion dollars. Clearly, Italy’s optimistic vision for the BRI didn’t deliver.

Moreover, Meloni has been a strong voice in defending democratic values and criticizing China’s authoritarian crackdowns from Xinjiang to Hong Kong. She has criticized China’s mismanagement of the COVID-19 pandemic and dismissed the idea that China supported Italy during the depths of the crisis. Amid criticism of Chinese military exercises in the Taiwan Strait, she said last year that “the EU is an important market for China, that risks to be closed if Beijing decides to attack Taiwan.”

The importance of US-Italian economic relations

Beyond geopolitics, economic issues will also likely be on the agenda in the Biden-Meloni meeting. Here they have a strong base to build on. Trade between the United States and Italy has almost doubled from $52 billion to $100 billion in the last decade. Unlike with China, Italy’s trade balance with the United States has always been positive. Last year, for example, Italian exports to the United States reached $73 billion. The United States is the second-largest export market for Italy, making up 11 percent of all exports and more than 20 percent of non-EU exports. Similarly, Italy is the third-largest market in the EU and the eighth largest in the world by nominal gross domestic product; with a population of about sixty million it is the sixteenth largest export market for the United States, with significant trade and investment opportunities concentrated in high-value sectors.

Italian stock of investment in the United States has totaled more than $41 billion, supporting almost one hundred thousand American jobs. To put this it into perspective, Italian foreign direct investment in the United States is almost four times its investment in China. On the horizon, as part of the EU’s post-COVID recovery program, Italy will be the recipient of a more than $200 billion National Recovery and Resilience Plan focusing on three strategic axes: digitalization and innovation, ecological transition, and social resilience aimed at fixing structural economic challenges and inefficient infrastructure to invite serious investment from the United States. Italy ranked ninth among EU destinations for US foreign direct investment in 2022, with a stock of around $26 billion.

When Biden and Meloni meet at the White House, they will share a strong commitment to transatlantic cooperation on major geopolitical issues. The big areas of discussion will likely focus on cooperation to face global challenges, from economic growth to common security, where Italy has a very important role in North Africa and the Sahel that meets Biden’s strategy to create new diplomatic alliances in Africa and a Western alternative to China’s BRI. Strengthening economic cooperation should also be a priority, going beyond the traditional sectors in which US investments are mostly concentrated, such as manufacturing, electronics, telecommunications, and services. Washington and Rome should, for example, help facilitate new collaboration in industries working on artificial intelligence, the energy transition, and defense.

Meloni and Biden are more aligned than many observers may think. Biden should take this chance to build on her promising start.

Valbona Zeneli is a nonresident senior fellow at the Atlantic Council’s Europe Center and chair of strategic engagements at the George C. Marshall European Center for Security Studies.

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Representative Pramila Jayapal (D-WA), who chairs the Congressional Progressive Caucus, called Israel a “racist state,” touching off a controversy about America’s views toward the world’s only Jewish state.

Ahmed Charai is a Moroccan publisher and an Atlantic Council Board Director. He is also an international counselor of the Center for a Strategic and International Studies, a board of trustees member of International Crisis Group, and a member of the Advisory Board of The Center for the National Interest in Washington and Global Board of Advisors at The Jerusalem Institute for Strategy and Security in Jerusalem.

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Below, Atlantic Council experts explain what happened and what to expect next.

Click to jump to an expert analysis:

Markus Garlauskas: Success will require reaching beyond the officials in the NCG

Robert M. Soofer: On the agenda was the unthinkable—what to do if deterrence fails

Bee Yun Jo: The NCG was a success, even if it didn’t address all of South Korea’s security concerns

Jessica Taylor: The US and South Korea doubled down on ending the Kim regime if it uses nuclear weapons

Thomas Cynkin: Would the US trade Los Angeles for Seoul? South Koreans want to know.

Ryo Hinata-Yamaguchi: Watch what impact the NCG will have on Japan

Success will require reaching beyond the officials in the NCG

The inaugural meeting of the US-South Korea NCG is an important step in improving the assurance of South Korea, deterrence of North Korea, and the alliance’s military response capability. That senior representatives from the White House and South Korea’s presidential office led the delegations should signal the importance both sides place on following through with the Washington Declaration and set the stage for robust follow-through. However, the NCG’s engagement outside of high-level government channels may be even more pivotal to its success going forward.

The brief joint readout set out an ambitious and logical agenda of quarterly meetings to advance on several workstreams, which include some very practical measures focused not just on reassuring South Korea, but also on improving deterrence of and responses to a North Korean nuclear attack. Such a brief public readout, of course, cannot capture the full scope and detail of what has been and will be discussed at NCG meetings. Such meetings will inevitably touch upon issues that are politically sensitive, involve classified operational and intelligence information, or both. The unfortunate tendency by some South Korean and US officials, as a result, will be to keep the proceedings very “close hold” and the public readouts very brief and selective. Meanwhile, issues deemed too politically sensitive by one or both sides might not even make it on the agenda, for fear of derailing the meetings or that such discussions might leak to the press. Such an approach would not be helpful for the NCG’s goals.

The United States and South Korea should be as forthcoming as possible about the results of NCG discussions in future sessions, and they should engage outside experts extensively in a broader effort to advance the NCG’s workstreams. The benefits of such an approach, if executed, will outweigh the risks. The NCG’s proceedings should take a cue from Director of National Intelligence Avril Haines’s latest efforts on transparency, including the wise and bold step of publicly releasing the recent National Intelligence Estimate on North Korea. Ultimately, exchanging insights with a wider group of experts in parallel with official NCG meetings will help to reassure more South Koreans across the political spectrum, aid in getting the message to North Korean elites, and help to make the best use of the capabilities of government and nongovernment experts inside South Korea and the United States to achieve the NCG’s objectives.

—Markus Garlauskas led the US intelligence community’s strategic analysis on North Korea as the national intelligence officer for North Korea, after serving as the chief strategist at the US-South Korea Combined Forces Command. He is the director of the Indo-Pacific Security Initiative at the Scowcroft Center for Strategy and Security of the Atlantic Council, and tweets at @Mister_G_2.

On the agenda was the unthinkable—what to do if deterrence fails

The North Korean intercontinental ballistic missile (ICBM) test just days prior to the inaugural meeting of the NCG must have been a poignant reminder to the participants about why they were there. North Korean belligerence and the expansion of its nuclear arsenal have been sowing doubts among South Koreans about the reliability of the US nuclear umbrella. The purpose of the NCG is for the United States to satisfy its ally that it has the capabilities and the resolve to counter North Korean nuclear threats—and that Washington will take South Korean security interests into account when deciding how and when to use nuclear weapons.

On the agenda for the meeting were discussions about measures, some already in place, to share information on the nuclear threat, improve understanding about the role of nuclear weapons, and think through the unthinkable: what to do if nuclear deterrence fails and the United States and its allies are forced to respond to an initial North Korean nuclear use. Perhaps more important than the exchange of information was the establishment of protocols and processes for consultation between the two countries during crisis and conflict.

The nuclear dimension of any conflict will be unique, and how the United States responds will depend on the president and the circumstances (including the concerns of allies), regardless of preexisting plans. South Korean officials should appreciate this when they request ever-more detailed briefings of US nuclear plans that the Department of Defense does not provide even, for example, to its NATO allies. Tabletop exercises examining how the two sides could react after nuclear use are foundational, as are exercises conducted by US nuclear forces with potential South Korean conventional support.

Visits to South Korean ports by US nuclear submarines and overflights by US strategic bombers may not fully address the underlying security dilemma for South Korea, which is whether the United States would be willing to run the risk of North Korean nuclear retaliation against a homeland that is becoming increasingly vulnerable to Pyongyang’s long-range missiles. The United States today is protected against North Korean ICBMs due to the US national missile defense system, which should put South Koreans at ease. But the future of US homeland defense must share space in future NCG agendas along with nuclear and integrated strategic deterrence more broadly.

—Robert M. Soofer is a senior fellow in the Forward Defense practice of the Atlantic Council’s Scowcroft Center for Strategy and Security, where he leads its Nuclear Strategy Project.

The NCG was a success, even if it didn’t address all of South Korea’s security concerns

The inaugural NCG meeting was a success, highlighting substantial developments in combined efforts to thicken the United States’ nuclear umbrella. First of all, the meeting afforded a visible reaffirmation of the United States’ commitment to provide a full range of US capabilities, including nuclear. Along with reaffirmed words of commitment in the joint readout to “a swift, overwhelming, and decisive response” against “any nuclear attack by North Korea,” the United States and South Korea succeeded in coordinating the first port call of a US nuclear submarine in four decades. 

The NCG meeting was also successful in conveying the seriousness to both the South Korean and US governments in the implementation of the new bilateral consultations. Upgrading the first meeting to be held at deputy-level, South Korean President Yoon Suk Yeol also made a brief appearance at the beginning of the meeting. Reifying the Washington Declaration, the first NCG meeting laid out concrete steps, including the development of security and information sharing protocols, nuclear consultation and communication processes for contingencies, and the development of joint planning, operations, exercises, simulations, trainings, and investment activities, particularly on the execution of South Korea’s conventional support to the United States’ nuclear operations. 

Lastly, the NCG meeting reasserted South Korea’s commitment in nonproliferation. As Kim Tae-hyo, Seoul’s principal deputy national security adviser, stated during the joint press briefing, “There is no need for South Korea to consider separate nuclear armament.”

What the first NCG meeting achieved may not fully address South Korea’s security concerns. Disappointments and criticisms can be swift and easy. Yet, an important caveat here is that the Washington Declaration and implementation of the NCG rest on the conviction of the “importance, necessity, and benefit” of enduring maintenance of the United States’ nuclear umbrella. The implementation of the NCG and strengthening of the United States’ nuclear umbrella have succeeded in taking South Korea’s nuclear path again off the table. The combined efforts derive not from naïveté about an impermeable nuclear umbrella, but from realistic assessments on the risks, if not infeasibility, of South Korea’s nuclear path. 

—Bee Yun Jo is a nonresident senior fellow in the Indo-Pacific Security Initiative at the Atlantic Council’s Scowcroft Center for Strategy and Security and an associate research fellow in the Defense Strategy Division at the Center for Security and Strategy at the Korea Institute for Defense Analyses.

The US and South Korea doubled down on ending the Kim regime if it uses nuclear weapons

A US soldier’s crossing into North Korea and subsequent detainment significantly complicates matters for the US-South Korea alliance and a Korean Peninsula that is experiencing a precarious ratcheting up of tensions. The soldier’s crossing comes amid South Korean and US efforts to strengthen deterrence through its new NCG, and it follows North Korea’s most recent launching of an ICBM. As this situation unfolds, the US-South Korea alliance will have to face the delicate balancing act of strengthening deterrence and assuaging tensions while also hoping to renew dialogue. Notably, despite the NCG and the deployment of the USS Kentucky nuclear submarine being planned for months, media coverage tied the events to North Korea’s missile launch rather than tying alliance actions to the evolution of Pyongyang’s capabilities. Thus, alliance actions pose the risk of being interpreted as retaliatory and escalatory if not properly communicated.

What was also notable about the NCG readout was the alliance’s doubling down on the threat to end the Kim regime in the event of any North Korea nuclear use. This would have to mean that the alliance intends to possibly further escalate a conflict even in the event of North Korean low-yield nuclear use. By making this threat, the alliance restricts its freedom of maneuver to de-escalate a conflict. 

While the US-South Korea alliance at this time likely intends to make good on that threat, it is questionable whether this promise will hold for subsequent US and South Korean administrations. Polarization in both US and South Korean politics make for a questionable trajectory as both countries have pivotal elections in 2024. South Korea’s legislative election in April 2024 has the potential to significantly derail Yoon’s ability to further his foreign policy approach toward North Korea and strengthen the alliance. If the left-leaning Democratic Party of Korea were to, for instance, gain a supermajority (as they did in 2020), then it’s likely that the party will move to thwart Yoon’s approach to North Korea for the remainder of his one-term presidency.

Likewise, the outcome of the US presidential election is far from certain. The election has the potential of leading to another Trump administration or an administration with similar views about alliances. Notably, there has been diminishing support among US Republicans for NATO over the course of Russia’s invasion of Ukraine. This phenomenon will likely further international concerns surrounding the endurance of other US alliance commitments, particularly amid potential conflict escalation scenarios. 

But in the near term, we are likely to see an increasingly recalcitrant North Korea amid US-South Korean efforts to strengthen the alliance. Ahead of the seventieth anniversary of the Korean War armistice on July 27, a robust US-South Korea military exercise schedule, and the 2024 elections in South Korea and the United States, and with the complication of a US citizen now detained in North Korea, Pyongyang is unlikely to be swayed to change course without substantial concessions on the US-South Korea side. Both Seoul and Washington will likely vehemently oppose any such concessions ahead of their elections.

—Jessica Taylor is a nonresident fellow in the Indo-Pacific Security Initiative at the Atlantic Council’s Scowcroft Center for Strategy and Security. Taylor has served in the US Department of Defense in both military and civil service capacities for nearly twenty years.

Would the US trade Los Angeles for Seoul? South Koreans want to know.

The Washington Declaration, which reaffirmed the strength of the US nuclear umbrella covering South Korea, was further reinforced this week with strong signals in the form of the NCG and a rare and highly visible port visit by a US nuclear submarine to South Korea. While these moves were welcome, they did not represent a significant shift in US policy. Rather, they were a more concrete and visible manifestation of existing US extended deterrence policy and related US-South Korea strategic stability consultations. They were aimed as much at building confidence among the South Korean public in the US nuclear deterrent—and ameliorating domestic pressure within South Korea to “go nuclear”—as at deterring North Korean aggression.

With the growth of the North Korean nuclear weapons program, now comprising enough fissile material for an estimated forty-five-to-fifty-five nuclear weapons and an expanding arsenal of missiles, North Korean capability to hold US cities at risk is increasing and the credibility of the US strategic deterrent is concomitantly being corroded. French President Charles de Gaulle famously asked US President John F. Kennedy whether the United States would trade New York for Paris. Similarly, Yoon and the South Korean public must be questioning whether the United States would trade Los Angeles for Seoul. Exercises in confidence building are useful but insufficient to resolve such doubts.

Moreover, deterring a North Korean attack is critical but not the only issue. North Korea’s capacity to sell nuclear materials, missiles, components, or even nuclear weapons poses a grave proliferation threat. Also, as the North Korean nuclear threat continues to grow, so will the pressure on regional countries, including South Korea, to go nuclear themselves. While the Washington Declaration and connected developments are a useful step, they are no substitute for a fundamental review of existing US strategy to actively contain North Korea in the face of the shifting strategic balance of forces on the Korean Peninsula.

—Thomas Cynkin is a nonresident senior fellow in the Indo-Pacific Security Initiative at the Atlantic Council’s Scowcroft Center for Strategy and Security and the practice lead, Japan and Northeast Asia, of the Transnational Strategy Group, a global consulting firm operating at the nexus of policy and business.

Watch what impact the NCG will have on Japan

The inaugural NCG meeting focused much on confirming the details of how the group will operate, including the formation of workstreams to make the United States and South Korea more effective in their deterrence and response readiness against the threat posed by North Korea. The meeting was also packaged well to express the United States’ strong bilateral commitment to extended deterrence, timed with the port call by the USS Kentucky to Busan. 

Indeed, there is still much to see regarding the actual effects produced going forward, which pivots on how the United States and South Korea operationalize and execute the workstreams to prove that the NCG is essential, effective, and mutually beneficial. Moreover, there are also questions concerning the group’s sustainability considering the delicate domestic politics—particularly in South Korea, where the strategic debates and security dilemmas are still real. Should the NCG prove to be merely symbolic, this could very well boost the arguments for indigenous nuclear armament in South Korean. 

Another key area to watch going forward will be the impact the NCG has on Japan. While the NCG has to focus on making the bilateral framework effective, the continuously growing nuclear threats in the region and any proven success of the NCG will underscore the need to expand the group to a trilateral framework, or at the very least to establish a separate US-Japan NCG.

—Ryo Hinata-Yamaguchi is a nonresident senior fellow in the Indo-Pacific Security Initiative, an assistant professor at the University of Tokyo, and a research fellow at Pacific Forum.

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In the June 2023 Issue of Longitude, Forward Defense Nonresident Senior Fellow Marco Tantardini published an article on the complexity of recovering manned spacecraft from orbit and landing them on other bodies in the solar system.

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Marco Tantardini

Nonresident Senior Fellow

Forward Defense Scowcroft Center for Strategy and Security

Italy Space

Forward Defense, housed within the Scowcroft Center for Strategy and Security, generates ideas and connects stakeholders in the defense ecosystem to promote an enduring military advantage for the United States, its allies, and partners. Our work identifies the defense strategies, capabilities, and resources the United States needs to deter and, if necessary, prevail in future conflict.

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But that wasn’t the case this week. The NATO Summit in Lithuania will be remembered both for the public fireworks over Ukraine’s aspirations for Alliance membership and outcomes that included a breakthrough on Swedish membership, the most detailed and robust defense plans since the Cold War, and unprecedented Group of Seven (G7) defense commitments to Kyiv.

Let’s start with the fireworks, unusual in a consensus-driven Alliance that values decorum and discretion, and end with the historic outcomes.

Tensions began simmering long before the summit among Biden administration officials and other NATO allies—with Ukraine lobbing arguments from the outside—over just how far to go in committing the Alliance to a time-linked invitation and roadmap for Ukraine’s membership.

For the Biden administration, it was a matter of geopolitical prudence to oppose any fixed timeline for an invitation for fear it would draw NATO, and hence the United States, into a direct conflict with Russia. With one eye on the 2024 US presidential election and the other on Russian President Vladimir Putin’s nuclear capabilities, why take the risk, particularly as full Ukrainian membership wasn’t likely to come before the war ended anyway?

For Ukraine’s more impatient supporters—particularly, but not exclusively, those geographically closer to the Russian threat—it was a matter of strategic imperative and moral obligation to draft language that provided more clarity on the pathway and potential timing of a NATO membership invitation than Washington considered acceptable. Several of those supporters had previously been occupied and repressed by Moscow, so they understand the value of NATO security guarantees.

Even if membership itself wouldn’t come for some time, they wanted to demonstrate maximum common cause for a people who miraculously and at enormous human cost are countering Russia’s war and revanchist ambitions.

The behind-the-scenes simmer boiled over when Ukrainian President Volodymyr Zelenskyy, apparently having read a draft of the summit communiqué about to be released, threw a Twitter bomb into the negotiating room.

What he objected to was text at the end of paragraph eleven, which read: “We will be in a position to extend an invitation to Ukraine to join the Alliance when allies agree and conditions are met.”

Zelenskyy shot back before the draft could be released:

“It’s unprecedented and absurd when time frame is not set neither for the invitation nor for Ukraine’s membership. While at the same time vague wording about ‘conditions’ is added even for inviting Ukraine. It seems there is no readiness neither to invite Ukraine to NATO nor to make it a member of the Alliance. This means that a window of opportunity is being left to bargain Ukraine’s membership in NATO in negotiations with Russia. And for Russia, this means motivation to continue its terror. Uncertainty is weakness. And I will openly discuss this at the summit.”

Before long, word spread in Vilnius that at least one ally had “broken silence,” which in NATO-speak means that during an agreed period after the communiqué has been finalized and before it is publicly released, any ally may come back with an objection and reopen negotiations.

Though it’s unclear what transpired next, officials involved in the negotiations described scenes during the summit in which US President Joe Biden and National Security Advisor Jake Sullivan stood over the document and hand-drafted changes. In the end, the US stance on Ukrainian membership proved immovable, even resisting attempts by at least one other ally to at the very least state that it was NATO’s intention to explore ways to invite Ukraine to join the Alliance as soon as the seventy-fifth-anniversary summit in Washington next July.

Given all that, there was more than a little buzz when Biden, in his fiery speech in Vilnius—in which he hailed the “unbroken” Ukrainian people—neglected to mention or encourage their NATO  membership aspirations. 

Even after NATO made the communiqué public, tensions still simmered.

At the NATO Public Forum, (a side event for the summit that the Atlantic Council co-hosted), Daria Kaleniuk, a Ukrainian anti-corruption activist, provocatively asked Sullivan how to explain to her young son, who is sleeping in their corridor due to air raids, that Biden isn’t ready to accept Ukraine into NATO. She suggested it might be “because he is afraid of Russia, afraid of Russia losing, afraid Ukraine winning,” or even suggested, “because there are back-channel negotiations with Russia” that ostensibly had Ukraine’s NATO hopes as a bargaining chip.

Sullivan was warm but firm to his questioner, acknowledging that the world stands in “awe” at the way Ukrainians have made sacrifices with “hell raining down from the skies” around them. At the same time, he scolded Kaleniuk for making “insinuations” that were “unfounded and unjustified” and asked that those insinuations “get checked at the door, so that we can talk to one another in goodwill and good faith.”

Beyond that, Sullivan added, “I think the American people do deserve a degree of gratitude” from both the US government and the rest of the world “for their willingness to step up” to provide such plentiful military assistance to Ukraine.

With tensions high, British Defense Minister Ben Wallace hit a similar theme, “providing a slight word of caution” that Ukraine should express more appreciation to its supporters.

When asked by reporters for his response to Wallace, Zelenskyy replied, “he can write to me about how he wants to be thanked.”

Were it not for the fireworks, the world’s focus would have been more singularly on the summit’s results.

Turkish President Recep Tayyip Erdoğan dropped his objections to Sweden’s membership, opening the way for it to join the Alliance. That leaves Putin facing a bigger and more unified NATO, strengthening defense in the Baltic states and the High North.

Real progress also came through a pledge by G7 countries (all in NATO except Japan), although it is not binding, to provide Ukraine “enduring” support—which each country will determine individually—including more defense equipment, increased intelligence sharing, and expanded training, dramatically reducing the likelihood of eroding resolve.

There was plenty more in the NATO Summit communiqué on defense plans, strengthened commitments to defense investment, and deeper global partnerships, particularly with leaders on hand from Australia, New Zealand, Japan, and South Korea; there was also robust language on China and warnings not to provide lethal support to its Russian friends for their Ukraine war.   

By summit’s end, and by the convening of the renamed and reconstituted NATO-Ukraine Council, tempers had calmed some and diplomacy had intervened on the Ukraine issue, though some bad blood will likely linger.

Zelenskyy went home not with a NATO invitation but with family photo-like pictures alongside NATO leaders, as mentioned in my Inflection Points column last week, and a dramatically different tone than his earlier missive, as shown in a video he tweeted from his train ride home to Kyiv:

“We are returning home with a good result for our country and, very importantly, for our warriors… For the first time since independence, we have formed a security foundation for Ukraine on its way to NATO. These are concrete security guarantees that are confirmed by the top seven democracies in the world. Never before have we had such a security foundation, and this is the level of the G7… Very importantly, during these two days of the [NATO] Summit, we have put to rest any doubts and ambiguities about whether Ukraine will be in NATO. It will! For the first time, not only do all the allies agree on this, but a significant majority in the alliance is vigorously pushing for it.”

At a closing session for the NATO Public Forum, I asked Lithuanian Foreign Minister Gabrielius Landsbergis how history would remember the Vilnius summit.

“Strategically, we won,” he said. “We committed ourselves to Ukrainian membership in NATO.” Unlike the 2008 commitment at the Bucharest NATO Summit that had no follow up, Landsbergis said the Alliance and Ukraine this time won’t waste another day, because of the urgency that Putin’s war had placed on everyone.

The Vilnius summit “was not the last stop,” he said. “We have to see it as a bridge. And the next stop is Washington. So, we have a full year. Lots to do…. Washington can actually be even more historic than Vilnius.”

Frederick Kempe is president and chief executive officer of the Atlantic Council. You can follow him on Twitter @FredKempe.

THE WEEK’S TOP READS

#1 NATO’s promises to Ukraine mark real progress
ECONOMIST

The Economist reports that although NATO allies could have done more at this week’s summit in Vilnius, they dealt a number of blows to Putin that went far beyond Ukraine.

“Putin’s first defeat was over a different expansion of NATO,” the Economist writes. “Turkey’s president, Recep Tayyip Erdoğan, said he is dropping his objections to Sweden’s membership, enabling it to follow its Nordic neighbor, Finland, into the alliance. That will strengthen the Baltic states and the High North, and tie up more of Putin’s resources should he attempt mischief against NATO anywhere along its frontier.”

Further, with increased military assistance from G7 countries, it will become harder for Putin to maintain his resolve. “The G7 members promise that this will be an ‘enduring’ commitment, and that each country will, individually, craft its own security guarantees for Ukraine that will give it a ‘sustainable force capable of defending Ukraine now and deterring Russian aggression in the future.’… This matters because it helps disabuse Putin and his elites of the belief that Western resolve will crumble if only Russia clings on.”

Although delaying Ukraine’s NATO membership process until after the war will likely give Russia incentive to prolong the war, the Economist argues, the additional military assistance should prevent that from happening. “That is where the summit made real progress.” Read more →

#2 The ‘Israel Model’ Won’t Work for Ukraine
Eliot A. Cohen | ATLANTIC

In this important Atlantic piece, Eliot Cohen argues that the “Israel model”—in which the West would arm Ukraine to the teeth to guarantee its ability to defeat any credible military threat—is a poor policy choice based on flawed reasoning.

Cohen writes that the main difference between 1973 Israel and 2023 Ukraine is that Israel had a military edge over its neighbors, which Ukraine currently lacks over Russia. “Israel staged bombing raids against targets deep in Syria and Egypt, including their capitals, from the 1960s forward, and unlike the Ukrainian drones flying to Moscow, these were not mere symbolic strikes. The Six Day War, in 1967, was an overwhelming Israeli victory, which involved the annihilation of its neighbors’ air forces and the advance of Israeli armor and infantry across the de facto 1949 border. The 1973 war similarly ended with Israeli forces within artillery range of Damascus and on the verge of destroying half the Egyptian force that had crossed the Suez Canal.”

Most provocatively, Cohen writes about the difference between an Israel with a nuclear arsenal and a Ukraine that gave up its nuclear weapons in 1994 in a deal under which Moscow promised to safeguard its sovereignty and security. “Unless, of course,” Cohen warns in his conclusion, “[Biden] prefers to be the father of the Ukrainian atom bomb.” Read more →

#3 Russia’s Nuclear Option Hangs Over Ukraine and NATO
Robbie Gramer | FOREIGN POLICY

To gain an understanding of how fears of nuclear conflict played into this week’s decision, read Robbie Gramer in Foreign Policy.

“The nuclear question is an existential one for the alliance,” he writes, “one that’s driven Washington’s calculations on what military aid to send to Ukraine and when, and it has also influenced the debate on when and how to allow Ukraine to join the military alliance as a full-fledged member.”

According to Gramer, US and allied officials are divided over the validity of Russian threats. “Some US and other NATO defense officials believe there could be an increased risk of Russia launching a limited nuclear strike with a low-yield tactical nuclear weapon to stave off a major battlefield defeat if its forces look to be on the verge of a rout, or if Ukraine appears poised to capture Crimea and large swaths of occupied territory in southern and eastern Ukraine. Others say that Russian President Vladimir Putin’s nuclear saber-rattling won’t go further than that, and bowing to such threats will only embolden Russia to use such ‘nuclear blackmail’ in the future.”

“At the same time, Ukrainian and Western officials also fear that Russia could mount an attack on Ukraine’s Zaporizhzhia nuclear power plant to attempt to trigger a major radiological event, irrespective of whether it launches a nuclear strike—though it’s unclear how successful those efforts would be.” Read more →

#4 Biden Pledges Long-Term Backing for Ukraine, but a U.S. Election Looms
Zolan Kanno-Youngs | NEW YORK TIMES

For insight into the role of US domestic politics on the NATO summit and Biden’s decision making, look no further than Zolan Kanno-Youngs’s reporting in the New York Times.

“Despite Biden’s repeated promises of staying by Ukraine’s side in its war against Russia, questions about the shelf life of support among American people and lawmakers hung over the summit of Western allies,” Kanno-Youngs writes. “Even as the US president was giving a long-term commitment, a group of far-right Republican lawmakers in Washington was pushing legislation that would scale back aid to Ukraine, exposing fractures in the Republican Party and raising doubts about its commitment should it capture the White House next year.”

According to Kanno-Youngs, to sway domestic public opinion to favor providing aid to Ukraine, Biden has framed the war as an existential battle between democracy and autocracy. In Vilnius, Biden was determined to address the doubts about continued US support for Ukraine. “We will not waver,” Biden said. “I mean that. Our commitment to Ukraine will not weaken.” Read more →

#5 Should Ukraine Negotiate with Russia?
Dmytro Natalukha; Alina Polyakova and Daniel Fried; Angela Stent; Samuel Charap | FOREIGN AFFAIRS

In dialogue with Samuel Charap, who previously urged the use of diplomacy as a tool to end the war with Ukraine, Dmytro Natalukha, Alina Polyakova and Daniel Fried (an Atlantic Council distinguished fellow), and Angela Stent argue that negotiations with Russia are bound to fail. Read this multifaceted analysis to understand the pros and cons of negotiation with Russia.

Natalukha claimed that the only way to secure Ukraine’s future is to remove Putin from power. “If the goal is to prevent Russia from threatening democracies around the world, allowing it to reach an armistice with Ukraine won’t do much good,” he writes. “Ukraine and its allies must aim to make Russia less anti-Western. Regardless of what happens at the negotiating table, therefore, Putin cannot remain in power.”

Polyakova and Fried believe that although negotiation will most likely happen, the battlefield is Ukraine’s best position from which to win the war: “A military stalemate is indeed possible. And at some point, negotiations with Russia will be needed to end this war. But Ukraine should start negotiating only when it is in the strongest possible position; it should not be rushed into talks when Russia shows no interest in any settlement terms other than Ukraine’s surrender. Starting negotiations now would mean accepting Putin’s maximalist terms. If Russia suffers further setbacks on the battlefield, however, talks could proceed from a better starting place.”

Polyakova and Fried continue, “The most important point, which Ukraine’s allies agree on, is that Ukraine must define the right moment for negotiations. That may or may not be when all of Ukraine’s territory is liberated. The key is for Ukraine to maintain flexibility in its decisions about its territory and the path toward a just peace.” Read more →

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The war in Ukraine exposed bluntly once more the appalling state of European defense capabilities—as seen in former Yugoslav republics in the late 1990s—and how Europe still depends on the United States to fight a war on its own continent.

Under US President Joe Biden, Washington has demonstrated its indispensability to NATO and European security at the very moment of the Russian invasion of Ukraine. But the present situation is unsustainable.

To stay safe against Russian and other aggression in the future, Europe will need a convincing conventional and nuclear deterrent of its own, and Germany will be key. The invasion of February 24, 2022 opened many eyes, but the biggest awakening took place in Germany.

Moscow’s assault on a European neighbor caused an epiphany in Berlin’s decades-long, complacent foreign and energy policy, as well as in its free-riding security and defense posture under Washington’s nuclear and NATO’s conventional umbrella. Chancellor Olaf Scholz understood the urgency for his country as he declared in his famous speech a Zeitenwende (time for change) for Germany’s foreign, security, defense, and energy policy, which was well received in Europe and the United States. Scholz pledged a one hundred billion euro special fund to rebuild the German armed forces that had decayed under the sixteen-year-long chancellorship of his predecessor, Angela Merkel. Berlin’s selfish post-1989 mantra—essentially “make peace without spending money for weapons”—became history almost overnight.

Today Germany is one of Ukraine’s biggest weapons providers after the United States. It is about to increase its defense budget of fifty-one billion euros to fifty-three billion euros. But Berlin needs to understand that the moment of truth has arrived for the Euro-Atlantic community of democracies.

After the US presidential election next year—no matter who makes it into the White House—Europe will need its own capabilities to defend European territory and borders from an outside aggressor. If Donald Trump returns to the White House or another Republican president takes office, we could see a shrinking of defense support for NATO, as the US military may concentrate its forces toward Asia and the Indo-Pacific.

Former US Secretary of Defense Jim Mattis admitted during his confirmation hearing in 2017 that the US military is not strong enough to meet the challenges it faces around the globe. Or in the words of Elbridge A. Colby, former deputy assistant secretary of defense, “if we have to leave Europe exposed, so be it… Asia is more important than Europe.”

Therefore, to make Europe safe for peace and democracy in the future, NATO needs to strengthen its conventional and nuclear pillars. Russia’s aggression today against Ukraine and tomorrow perhaps against Poland or the Baltic states makes the Europeanization of NATO imperative. In the words of former US Secretary of State Henry Kissinger: “Europe has to play a special role in American thinking… But I could understand in a modified arrangement that Europe could play a more important role in some areas. I am not offended by autonomy in my definition of it.”

For the past twenty years, US presidents from both the Democratic and Republican parties have been asking European allies to take burden-sharing seriously. Here are four ways to start: 

1. It is imperative to strengthen the competitiveness and innovativeness of Europe’s military technological and industrial complex and to harmonize its procurement base. Buying off-the-shelf US equipment can go hand-in-hand with buying European equipment—and this should apply to all NATO members.
2. Not only must NATO forces be interoperable—allowing them to use each other’s platforms seamlessly while fighting alongside each other—but this should extend to potential future NATO members like Ukraine, Moldova, and Georgia. 
3. For the United Kingdom, France, and Germany, a permanent increase of their defense spending to beyond the NATO target of 2 percent of gross domestic product should be seen as an obligation. Emerging from the Vilnius summit, where a new push is under way to get all allies beyond 2 percent, it is the responsibility of the biggest European economies to upgrade their conventional forces in order to protect European soil—when Washington might be too busy in Asia.
4. Europe needs a credible nuclear deterrent of its own, under NATO command. Only a trilateral British, French, and German nuclear umbrella, combined with a US umbrella, all under the command and control of the Supreme Allied Commander Europe (SACEUR) will be a credible deterrent for Russia. This would require that France and Germany find a solution for equipping their joint Future Combat Air System—a new generation of advanced fighter jets—and the German F-35 dual capable aircraft with French nuclear weapons. Germany would not have its own nuclear weapons, so this arrangement would not violate the Nuclear Non-Proliferation Treaty. The NATO command structure must be tailored in such a way that Europe can fight a conflict in which neither Americans nor Canadians may wish to get involved, while taking advantage of NATO commands and systems. To this end the deputy SACEUR has to be European, and a headquarters-based Combined Joint Task Force must serve as his or her operational command.

Today it is clear that the main threat to European security does not come from Russia’s conventional forces, but from its tactical nuclear weapons and its sophisticated hybrid warfare. For Germany to be a full and equally strong part of a new European pillar of NATO, it needs to break the ultimate taboo and accept that a wider shared European nuclear deterrence should now be part of Berlin’s Zeitenwende defense thinking.

Of course, an outcry will arise: A stronger nuclear role for Germany will sound unthinkable to many. But so was Russia’s full-scale invasion and war in Europe only last year.

There have been strategic debates in Bonn since the 1950s about whether the Article 5 joint defense pact would really be implemented by Washington in case of an attack—whether a US president would sacrifice New York for Berlin or New Orleans for Munich. Today 62 percent of Germans are in favor of spending more money to modernize the Bundeswehr properly so that it can defend its country. Meanwhile, 47 percent of Germans agree with their government’s heavy support of the Ukrainian military—with another 16 percent wanting it to go further.

This, then, is the moment to start a debate in Berlin, Paris, and London about a trilateral French, British, and German nuclear European Defense Initiative, and the responsibility of those three powers to protect Europe if Article 5 is invoked in a worst-case-scenario.

Adm. Jacques Lanxade was joint chief of staff of the French Armed Forces and served as a defense advisor to French President Francois Mitterrand.

Denis MacShane is a former UK minister of Europe and a former UK delegate to the Parliamentary Assembly of NATO.

Margarita Mathiopoulos is a defense expert and professor emerita of US foreign policy and international security at Potsdam University. She also served as a foreign policy advisor to the former chairman of the German Free Democratic Party, Guido Westerwelle.

Gen. Klaus Naumann served as chairman of the military committee of NATO and joint chief of staff of the German Armed Forces. 

A German language version of this article first appeared in Handelsblatt. It is printed here with the authors’ and publisher’s permission.

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It’s a fast track with a slow start. NATO leaders meeting in Vilnius today released their summit communiqué, in which they said that Ukraine no longer needs to complete a membership action plan to join the Alliance—but that an invitation would only be extended “when allies agree and conditions are met.” In the meantime, the allies pledged to work closely with Kyiv through a newly established NATO-Ukraine Council. With Ukrainian President Volodymyr Zelenskyy’s biggest request—a timeline for membership—unfulfilled, have allies truly bolstered Ukraine’s security as it battles against Russia’s full-scale invasion? What else did the Alliance agree to regarding Russia and Ukraine? Our experts, who are all at the center of the action in Vilnius, decode the communiqué.

• John E. Herbst (@JohnEdHerbst): Senior director of the Atlantic Council’s Eurasia Center and former US ambassador to Ukraine
• Rachel Rizzo (@RachelRizzo): Nonresident senior fellow at the Europe Center
• Christopher Skaluba: Director of the Scowcroft Center’s Transatlantic Security Initiative and former principal director for European and NATO policy at the US Defense Department

Roadmap or roadblock?

• John tells us that the communiqué’s conditional language and lack of timeline amounts to “not much movement beyond the 2008 Bucharest NATO Summit language noting that Ukraine would eventually be a member.”
• That’s remarkable given that the 2008 language, which also encompassed prospective Georgian membership, “has been derided for years for placing both Georgia and Ukraine in the worst strategic position possible,” Rachel observes, with multiple Russian invasions of both countries occurring in the intervening years. “The problem with vague language like this is that it kicks the can down the road.”
• “Inside the geeky NATO universe, the upgrading of the NATO-Ukraine Commission to Council status and the removal of formal membership action plan requirements for Ukraine are significant developments,” Chris adds. “But neither packs a political punch or will be viewed as real progress on the membership question.”
• There was also no mention in the communiqué of security guarantees for Ukraine “that were broadly promised in the run-up to the summit,” Chris notes. “The combination of these things makes for an underwhelming package for Ukraine, though some small hope remains for better outcomes at tomorrow’s inaugural NATO-Ukraine Council meeting.”

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DC drama

• John relays that the communiqué’s release was delayed due to the “clear disagreement” between the United States and Germany on one side, and Nordic, Eastern European, and some Western European allies on the other with regard to Ukraine’s membership. Both sides had to bend a bit to get to the final consensus language. “The end result was not quite inspiring,” he says.
• But inspiration could always strike: The Alliance will celebrate its seventy-fifth anniversary next year with a Washington summit, which offers US President Joe Biden “a chance to establish a legacy as an outstanding national security president,” John argues. To make that happen, he adds, Biden will need to “provide Ukraine all the weapons it needs to defeat the Kremlin on the battlefield” and “move beyond caution to hasten the anchoring of Ukraine in NATO.”
• Rachel fears more disappointment ahead, whether at the Washington summit or ten years from now, when “NATO allies will come face to face with the undeniable truth that all allies might not ever be on the same page regarding Ukraine’s NATO membership. That’s a tough pill for many to swallow, but it might just be reality.” 

Defensible moves

• John welcomed the communiqué’s labeling of Russia as “the most significant and direct threat” to the Alliance. “This is an important reminder that US and NATO support for Ukraine is not philanthropy, but the smart way to defend our vital interests,” he explains.
• Chris points out that on the positive side, the Vilnius gathering will be remembered as another “enlargement summit” because of Monday’s deal with Turkey paving the way for Sweden’s accession.
• Flying under the radar, the allies also agreed to adopt “some four thousand pages of classified regional plans for the defense of NATO territory,” Chris says. This move “completes a shift, started in 2014 after Russia’s invasion of Crimea, to a deterrence-by-denial strategy absent since the waning days of the Cold War. Heady stuff.”

The post The NATO Summit’s underwhelming support for Ukraine appeared first on Atlantic Council.

Below, our experts decode all the goings-on in Vilnius—and what they mean for Kyiv’s path to NATO membership, the war in Ukraine, Sweden’s forthcoming accession, the Alliance’s growing focus on China, and more.

Click to jump to an expert analysis:

Reactions from Wednesday, July 12

John Herbst: A step forward for Ukraine’s security, but not a large one

Anca Agachi: A mixed bag, but with signs of quiet progress

Daniel Fried: The G7 Joint Statement is no Article 5, but it’s a start

Hans Binnendijk: Vilnius was a bridge to next year’s NATO summit in Washington

Phillip Cornell: Energy issues took a backseat in the Vilnius communiqué, but loom large in NATO’s future

Reactions from Tuesday, July 11

John Herbst: An uninspiring result for Ukraine

Christopher Skaluba: ‘Ambiguous’ ‘head-scratching and disappointing’ language about Ukraine’s NATO membership 

Daniel Fried: Allies make clear Ukraine is firmly in the transatlantic family 

Shelby Magid: Calling out the ‘most significant and direct threat’—and its accomplice

Rich Outzen: A clear-eyed snapshot that meets the geopolitical moment

Andrew D’Anieri: The NATO-Ukraine Council is a net positive step, but also the ‘bare minimum’

Rachel Rizzo: Summit statement shows continued disagreement about Ukraine ‘at the highest levels’ of NATO

David O. Shullman: The communiqué confirms NATO’s growing attention to Indo-Pacific security

Ian Brzezinski: The Biden administration was ‘largely alone’ in blocking Ukraine’s roadmap to membership

A step forward for Ukraine’s security, but not a large one

There is significant overlap among the members of the G7, NATO, and the European Union (EU). Four of the G7 nations are in the EU and six are in NATO. It is therefore no surprise that the general approach of the three organizations to Moscow’s war on Ukraine share similar characteristics. All three organizations have actively supported Ukraine since Moscow’s aggression began in February of 2014, and much more so when it intensified in February of 2022. All assert Ukraine’s right to enjoy the peace and stability that should be provided by the liberal international order. With the United States in the lead in NATO and the G7, both organizations have provided significant support to Ukraine, ensuring that Russian President Vladimir Putin could not achieve his goal of establishing effective political control in the country.  

At the same time, again with the United States’ decisive influence, the G7, like NATO, has avoided steps that might seem overly provocative to Moscow—a clear call for Ukraine’s victory against Moscow’s aggression or decisive steps that would lead to a faster Ukrainian victory. So the best way to look at the Joint Declaration of Support for Ukraine issued by the G7 on July 12 in conjunction with the NATO Summit in Vilnius is as a mostly US-influenced two-step. 

The NATO Summit produced an uninspiring communiqué on the Ukraine-NATO relationship that moved only slightly beyond the language of the 2008 Bucharest NATO Summit. The G7 Declaration was timed to the NATO Summit because the question of Ukraine joining NATO is linked with the issue of security guarantees. Both are meant to address the difficult question of how an independent Ukraine can live in peace and security alongside a hostile Russia. So it is no surprise that the G7 statement is a step forward toward enhancing Ukraine’s security but not a very large one. 

The declaration affirmatively states Ukraine’s right to choose its own course, join the West, and be free from intimidation and aggression. But it does not offer collective G7 action that might provide greater protection against future Kremlin provocations; instead, it encourages bilateral arrangements between Ukraine and individual G7 states. It places emphasis on the provision of weapons to Ukraine to make it a less appetizing target for a predatory Kremlin. This is a reasonable concept, but less effective than an actual guarantee by the G7 countries to respond forcefully to future Kremlin aggression. Yet even this step is undermined by the fact that all the G7 countries—with the possible exceptions of the United Kingdom and, perhaps now, France—have been reluctant to send Ukraine the more advanced weapons it needs to deliver that decisive blow to Russian forces on its territory.

Russian commentators have dismissed the NATO communiqué as a disappointment for Kyiv, but expressed some dissatisfaction with the G7 Declaration. Their real ire, though, is aimed at Paris, after the French decision to send SCALP long-range missiles to Ukraine. This underscores France’s differences with Washington, which is still unwilling to send Army Tactical Missile Systems (ATACMS). French President Emmanuel Macron’s boldness is welcome, but no substitute for strong US leadership.

—John Herbst is senior director of the Atlantic Council’s Eurasia Center. He served as US ambassador to Ukraine from 2003 to 2006.

A mixed bag, but with signs of quiet progress

Overall, the Vilnius summit stuck the landing, and to continue the metaphor, the gymnastic feat was about as tough as it gets. This was indeed a summit of unity, as US President Joe Biden had hoped, and the breakthrough regarding Sweden’s NATO accession especially contributed to that sense. The Alliance also successfully positioned itself as a global actor that understands that the security environment has fundamentally changed, and the European and Indo-Pacific theaters are inextricably linked. The attendance of the Asia-Pacific 4 (Australia, Japan, South Korea, and New Zealand) and language in the communiqué elevating the role of partners is crucial in this regard.

However, the summit’s results were mixed on a range of other issues. Despite high hopes and a strong moral argument, Ukraine was not offered the clear path and timeline it was hoping for to join the Alliance, even as its future in the Euro-Atlantic family was reconfirmed. This outcome, while not surprising, was also likely the best achievable outcome at the moment given Allied differences. This hints at a tough road for NATO in making the ambitious progress necessary by 2024, especially if Ukrainian battlefield advances slow down. Eastern flank reinforcements to brigade-level will only happen “where and when required,” and the language on China was modest in advancing proposals for action, as it was more intent on defining the challenge Beijing poses. The Alliance generally make the most important progress quietly, and here is where I saw encouraging signs: the focus on resilience and securing critical infrastructure; important mentions of Allied enablement and sustainment; and cooperation with the private sector and defense industry to deblock defense supplies.

While kicking the can down the road offers some time, Allies need to start to work with aplomb now to deliver. If anything, the NATO Summit in Washington in 2024 will be an even higher order to rise to—morally and strategically.

—Anca Agachi is an associate director and resident fellow for Transatlantic Security Initiative in the Scowcroft Center for Strategy and Security.

The G7 Joint Statement is no Article 5, but it’s a start

The G7 Joint Statement on Ukraine is out. It’s no Article 5 security guarantee. It’s a framework for negotiations of bilateral and G7 arrangements with Ukraine to provide military and economic assistance, as well as unspecified security commitments for that country. It includes a promise of consultations with Ukraine in case of a future Russian armed attack that could generate military and other forms of support. For its part, Ukraine commits in the statement to continue its democratic and rule of law transformation, as well as its military reforms. Notably, the statement makes clear that it is no substitute for NATO membership but is intended to help Ukraine while it pursues that goal.

Cynics can make a meal of the statement. It provides little beyond what G7 countries are already doing. But there is another way to look at it. The big strategic question that NATO, the G7, and the United States have faced is whether Ukraine is part of the transatlantic and European family and its institutions or whether it is part of a Kremlin sphere of domination. The Kremlin claims Ukraine as its own.There are many in Europe and the United States who tacitly (or overtly) agree and would cut a dirty deal with Moscow to that end.

Happily, that’s not where NATO and the G7 have come out. The NATO communiqué’s language on Ukraine could have been stronger and the G7 statement is no security guarantee. But they both rest on the premise that Ukraine is part of the European and transatlantic family. The details of how and when have yet to be worked out. The goal is clear: NATO membership for Ukraine. The G7 statement can serve as scaffolding for Ukraine while it works to get there. 

—Daniel Fried is the Weiser Family distinguished fellow at the Atlantic Council and a former US ambassador to Poland.

Vilnius was a bridge to next year’s NATO summit in Washington

The NATO Summit in Vilnius was a success. But its success was limited, and it will be seen more as a bridging mechanism between last year’s Madrid summit and next year’s Washington summit. At Madrid, the allies agreed on the nature of the new threats and challenges emanating from both Russia and China. Madrid’s new Strategic Concept refocused the Alliance. 

Vilnius was to be an implementation summit. And it was. It recorded progress in multiple areas, from enhanced deterrence to hybrid war to climate change. But it stopped short on several key issues like Ukraine’s membership, NATO’s role in the Indo-Pacific, and managing the nuclear weapons threat posed by Russia and, increasingly, China.

The Vilnius summit took place in the midst of Europe’s most destructive war in nearly eight decades and a US effort to rebalance its relationship with China. This resulted in a degree of caution. Unity formed around lowest common denominator solutions. During the coming year between Vilnius and Washington, the bridge created this week will hopefully be strengthened enough to bear the weight that the Alliance will need to carry next year.

The most successful element of the Vilnius summit was enhancing NATO deterrence along its front line with Russia, from the High North to the Mediterranean Sea. With Finland in and Sweden soon to be in, there is a solid line of defense against Russian aggression. There is no clearer evidence of Russia’s strategic failure. NATO’s New Force Model, agreed upon last year, will provide clarity for nations with regard to their specific wartime responsibilities and incentives to meet NATO’s 2 percent of gross domestic product defense spending floor. NATO’s forward presence in eight front line states needs further strengthening to include a continuous brigade-level presence in each. And the readiness and mobility initiatives need further attention.

The greatest disappointment at Vilnius was the inability to provide a more concrete path for Ukrainian membership after the war ends. But cautious steps were taken. The NATO-Ukraine Commission became a Council, giving Ukraine a stronger voice in NATO political affairs. The Council will be used to plan for future Ukrainian membership, which was again solemnly committed to “when allies agree and conditions are met.” This shortfall for Kyiv was somewhat offset by the G7 joint declaration of support for Ukraine, which pledges additional long-term security commitments and arrangements. Hopefully by the Washington summit, that path can be paved with more concrete.

 —Hans Binnendijk is a distinguished fellow at the Atlantic Council’s Scowcroft Center for Strategy and Security.

Energy issues took a backseat in Vilnius communiqué, but loom large in NATO’s future

While the debate over membership (delayed for Ukraine, confirmed for Sweden) dominated the last-minute negotiations over the NATO Summit communiqué, the opening bulk of the document itself is rightly dedicated to reaffirming the traditional and newly relevant core tenets of NATO’s existence—collective defense, nuclear deterrence, and the production and logistics to achieve them. But about two-thirds of the way down, the communiqué turns to how the Euro-Atlantic security environment has shifted. 

The war in Ukraine has reaffirmed that “emerging security challenges” (in NATO parlance) have arrived, from the weaponization of energy to the widespread “digitalization” of warfare and the importance of resilience. 

Indeed, energy security and climate change are gaining renewed importance for the Alliance. Climate security issues are a personal priority of the secretary general, and a changing energy economy means that the pipeline politics of yesterday will look simple compared to the complex security implications of integrated power systems, critical digital infrastructure, supply chains for key inputs to transition, and the like. And while NATO wades into the tech innovation space with its own acceleration fund (DIANA), it has yet to grasp the power of military procurement for demonstrating, scaling, and standardizing technologies that will be key to mitigating emissions in the civilian space while also boosting military effectiveness. Meanwhile the energy transition itself will be a messy process, with pockets of volatility and economic mismatches that could directly impact political stability, popular support for a sustainable transition, and strategic relations.

The Vilnius summit is a turning point for many reasons, but perhaps the most fundamental for NATO as an institution is its shift from an internally focused bureaucracy with declining budgets fighting to justify its existence in the post-Cold War world, to one compelled to adopt a growth and ambition mentality. Where before it was simpler to ring-fence NATO’s military mission, concerns about climate change and strategic competition are imposing policy-driven global economic realignments. To fulfill its ambitions for leadership in that new environment, NATO needs the competence and reach to provide important security-related input to key decisions about infrastructure investment and managing new technology—and it needs to be convinced of its own relevance in those spaces.

—Phillip Cornell is a principal at Economist Impact and a nonresident senior fellow at the Atlantic Council Global Energy Center.

An uninspiring result for Ukraine

Talk about the eleventh hour! The NATO Summit communiqué was finally released at approximately 6:40 p.m. in Vilnius, rather late for a summit document. There was a good reason for this: clear disagreement between a large number of East European, Nordic, and some Western European allies on the one side and the United States and Germany on the other about how forthcoming the Alliance should be about Ukraine’s eventual membership in NATO. While the ad hoc coalition wanted clarity in hastening Ukraine’s membership, Washington and, to a lesser extent, Berlin were cautious. Given the weight Washington enjoys in NATO deliberations, this meant that the much larger number of allies could not get their preference. But given the importance of NATO unity, this meant that the United States and Germany had to move beyond their original position. 

The end result was not quite inspiring. The communiqué notes that Ukraine no longer needs to meet a Membership Action Plan, and the NATO-Ukraine Commission will become a NATO Ukraine Council: small steps in the right direction. On the crucial membership issue, the communiqué states, “the Alliance will support Ukraine in making these reforms on its path towards future membership. We will be in a position to extend an invitation to Ukraine to join the Alliance when Allies agree and conditions are met.” This is not much movement beyond the 2008 Bucharest NATO Summit language noting that Ukraine would eventually be a member.  

It was no surprise that a few hours before the communiqué appeared, Ukrainian President Volodymyr Zelenskyy tweeted his dissatisfaction: “It’s unprecedented and absurd when [a] time frame is not set neither for the invitation nor for Ukraine’s membership. While at the same time vague wording about ‘conditions’ is added even for inviting Ukraine.” This is somewhat sharp, but perhaps understandable from a man whose country is facing an aggression designed to destroy “Ukrainianness.”

While this denouement does not add luster to the Vilnius summit, there are other developments that make this a historic occasion. The main thing, of course, is the admission of Finland and Sweden to the Alliance. This greatly strengthens NATO security in the north. But also important is NATO finally recognizing  that  “the Russian Federation is the most significant and direct threat to Allies’ security and to peace and stability in the Euro-Atlantic area.” This is an important reminder that US and NATO support for Ukraine is not philanthropy, but the smart way to defend our vital interests. The communiqué also directly addresses the Belarus problem: “Belarus’ support has been instrumental as it continues to provide its territory and infrastructure to allow Russian forces to attack Ukraine and sustain Russia’s aggression. In particular Belarus, but also Iran, must end their complicity with Russia and return to compliance with international law.”  

These two items portend a further strengthening of NATO policy against the Kremlin threat and in support of Ukraine. Vilnius also foreshadows what is to come in NATO dynamics and policy. The seventy-fifth anniversary of the Alliance will be celebrated at the NATO Summit next year in Washington DC. That event will give US President Joe Biden a chance to establish a legacy as an outstanding national security president. For that to occur, he will need to listen closely to the United States’ newly active East European allies and 1) provide Ukraine all the weapons it needs to defeat the Kremlin on the battlefield and 2) move beyond caution to hasten the anchoring of Ukraine in NATO.

—John Herbst is senior director of the Atlantic Council’s Eurasia Center. He served as US ambassador to Ukraine from 2003 to 2006.

‘Ambiguous’ ‘head-scratching and disappointing’ language about Ukraine’s NATO membership 

The Vilnius summit is likely to be viewed as a landmark summit for two things that happened and two things that didn’t.

What did happen: The pending agreement by Turkey to ratify Sweden’s membership application will soon add a thirty-second ally to NATO’s ranks, making Vilnius, like Madrid before it, an enlargement summit. That every littoral Baltic Sea state, besides Russia, will be a member of the Alliance is a significant development for NATO’s defense of its northeastern flank. To that end, the adoption of some four thousand pages of classified regional plans for defense of NATO territory completes a shift, started in 2014 after Russia’s invasion of Crimea, to a deterrence-by-denial strategy absent since the waning days of the Cold War.

Missing from the Vilnius communiqué, however, is any clear pathway for Ukraine’s membership. Inside the geeky NATO universe, the upgrading of the NATO-Ukraine Commission to “Council” status and the removal of formal membership action plan requirements for Ukraine are significant developments. But neither packs a political punch, nor will either move be viewed as real progress on the membership question. In fact, communiqué language stating “we will be in a position to extend an invitation to Ukraine to join the Alliance when allies agree and conditions are met” is as ambiguous as the infamous Bucharest statement from 2008 promising that Ukraine “will become” a member of NATO. It is a head-scratching and disappointing formulation. Moreover, the bilateral security guarantees that were broadly promised in the runup to the summit were missing from the final statement. The combination of these things makes for an underwhelming package for Ukraine, though some small hope remains for better outcomes at tomorrow’s inaugural NATO-Ukraine Council meeting.

—Christopher Skaluba is the director of the Scowcroft Center’s Transatlantic Security Initiative and former principal director for European and NATO policy at the US Defense Department.

Allies make clear Ukraine is firmly in the transatlantic family 

It might have and should have been stronger. Nevertheless, the NATO communiqué language on Ukraine’s accession to NATO puts Ukraine within, and not outside, the transatlantic family. The “when” and “how” of Ukraine’s accession to NATO have yet to be worked out but, critically, the Vilnius summit has decided the “whether” of Ukraine’s NATO membership in the affirmative–something that the 2008 Bucharest summit did only at a high level of generality. “We will be in a position to extend an invitation to Ukraine to join the Alliance when allies agree and conditions are met” is the key sentence from today’s communiqué. It’s weakened by the gratuitous qualifier “we will be in a position to” rather than a straightforward “we will extend an invitation.” Still, this offer—any offer—of an invitation to Ukraine is a step forward, and a big one compared to where the United States and most NATO member governments were even a few months ago.

Less noticed (and less debated) was the communiqué text that makes clear, without weakening qualifiers, that “we do not and will never recognize Russia’s illegal and illegitimate annexations, including Crimea.” That language, though it reaffirms long-held positions, helps kill the temptation by some to push Ukraine into surrendering its territory in exchange for a dubious “peace” on Putin’s terms.

While NATO has now set out the goal—Ukraine in the Alliance—much depends on continuing to provide robust military support to Ukraine to help it fight back, and win, on the battlefield. Paragraph twelve of the communiqué notes that allies at the summit agreed on a “substantial package of expanded political and practical support” for Ukraine. It doesn’t provide details, but hopefully they will be announced soon, either by NATO or separately by allies.

Zelenskyy and a number of NATO allies have pushed hard (and pushed the Biden administration) to get the most from this summit. They were right to do so. Now they need to consolidate their gains and prepare next steps, including for next year’s NATO Summit in Washington DC.

—Daniel Fried is the Weiser Family distinguished fellow at the Atlantic Council and a former US ambassador to Poland.

Calling out the ‘most significant and direct threat’—and its accomplice

The Vilnius summit communiqué rightly places the Russian Federation as the most significant and direct threat to allies’ security, peace, and stability in the Euro-Atlantic area due to Moscow’s illegal war of aggression in Ukraine, terrorism, war crimes, and horrific violations of international law and norms.

Just as Russia deserves to be so centrally acknowledged for its role as the critical threat to Euro-Atlantic security, Belarus deserves to be right beside it. Any disregard of the role Belarus plays as a threat to regional security and an accomplice to the unprovoked war in Ukraine would be a mistake. NATO smartly recognized the threat from Belarus, condemning Belarus’s instrumental support to the Russian war effort by allowing its territory and infrastructure to be used by Russian forces for attacks into Ukraine.

While the communiqué notes Belarus’s complicity in this aggression, it’s critical to remember these crimes are committed and abetted by the illegitimate regime of Alyaksandr Lukashenka. The dictator, desperately clinging to power, has driven Belarus deeper into the Kremlin’s clutches. NATO’s firm declaration of concern for the situation in Belarus is in part due to Lukashenka deepening the military integration between Russia and Belarus, potentially allowing the deployment of “so-called private military companies” to Belarus (the Wagner Group), as well as (perhaps too mildly put) “malign activities” without respect to human rights, fundamental freedoms, and international law; the Alliance’s declarations are an important signal and sign of hope that Belarus will not be forgotten in the international agenda.

While it is good to see the declaration about threats within Belarus itself, what will surely frustrate many in the democratic forces (along with their supporters), is that there is no acknowledgement that these actions are taken by an illegitimate regime, nor mention of the democratic forces rallying against these actions, against the war, and against any deployment of Russian nuclear weapons and nuclear-capable systems on Belarusian territory.

While the communiqué’s comments on Belarus could have been stronger, there is hope NATO leaders and experts in Vilnius have listened in on conversations featuring the democratically elected leader of Belarus and Lukashenka’s rival in the widely disputed 2020 election, Sviatlana Tsikhanouskaya, who has been boldly speaking in Vilnius in side-events calling for commitments to Belarus and reminding the world that the Lukashenka regime does not represent the Belarusian people.

—Shelby Magid is the deputy director of the Atlantic Council’s Eurasia Center.

A clear-eyed snapshot that meets the geopolitical moment

The communiqué presents a clear-eyed snapshot of the Alliance in an era of great power rivalry and strategic competition. Russia receives thorough and excoriating attention as the shatterer of peace and a continuing threat. China is called out for challenging the norms, interests, and security of the Alliance and its members. New and prospective members in the room or at the doorstep (Finland, Sweden, and on a farther horizon, Ukraine) were appropriately hailed, as were Asian partners Japan, Australia, New Zealand, and South Korea. NATO member Turkey will be pleased by paragraphs four and five, which appreciate Turkish support to Sweden’s accession process and mention Ankara’s preferred language on terrorism as a threat “in all its forms and manifestations” to the Alliance. Hard power, conventional deterrence, and readiness are key focal points, though emerging and nontraditional threats are treated as well. Surprisingly, energy security makes an appearance only in paragraph sixty-eight. All in all, though, the document shows energy, focus, and seriousness appropriate to the geopolitical moment.

—Rich Outzen is a nonresident senior fellow at the Atlantic Council IN TURKEY.

The NATO-Ukraine Council is a net positive step, but also the ‘bare minimum’

Much of the conversation immediately ahead of the NATO summit in Vilnius focused on whether the allies would take concrete steps toward Ukraine’s membership in the Alliance. On Sunday, Biden dumped cold water on Ukraine imminently joining NATO, but whispers in expert circles in Washington suggested that an intermediate initiative toward membership might make a splash at Vilnius. In fact, the communiqué itself caused barely a ripple: a new NATO-Ukraine Council that will formalize consultations between Brussels and Kyiv on Ukraine’s “aspirations for membership in NATO.”

A NATO-Ukraine Council is certainly a net positive step toward Ukrainian accession, but the fact that this was the centerpiece of the communiqué suggests it was the bare minimum step upon which allies could agree. The Alliance should have gone further and instead established a defense and deterrence partnership to provide Ukraine lethal aid and training (the renewed Comprehensive Assistance Package will help Ukraine become more interoperable with NATO, but provisions only five hundred million euros for nonlethal aid).

The signers also left open the question of when Ukraine will join the Alliance, writing only that Ukraine will be invited “when allies agree and conditions are met.” This ambiguity may help prevent Russia from blocking specific preconditions to Ukraine’s accession, but it could also create further indignation in Ukraine and in the Baltics if allies continue to disagree on whether Ukraine is “ready” for NATO. 

Pressure will grow on the White House and Western European capitals to elucidate their conditions for Ukraine’s membership, at least in private channels, as Kyiv no doubt campaigns for an invitation at the 2024 NATO summit in Washington DC. 

—Andrew D’Anieri is assistant director at the Atlantic Council’s Eurasia Center.

Summit statement shows continued disagreement about Ukraine ‘at the highest levels’ of NATO

For many, the July 11 communiqué was along the lines of what was expected coming out of the NATO Summit in Vilnius. For others, hope was high that NATO allies would rally around Ukraine and show some clear steps not just in terms of whether the country will eventually join NATO, but exactly how and exactly when. NATO allies didn’t (and couldn’t) go that far, which shows continued disagreement at the highest levels as to Ukraine’s future relationship with the military alliance.

But it’s not all bad news—NATO allies were able to reaffirm their statements in the 2008 communiqué that Ukraine’s future is, indeed, in NATO. The problem with vague language like this is that it kicks the can down the road. The communiqué language basically says that Ukraine can join when all allies agree and when conditions are met. That leaves a lot of room for interpretation. My sense is that in the future—whether it’s in a year at NATO’s seventy-fifth anniversary summit in Washington, or five years from now, or ten—NATO allies will come face to face with the undeniable truth that all allies might not ever be on the same page regarding Ukraine’s NATO membership. That’s a tough pill for many to swallow, but it might just be reality. 

—Rachel Rizzo is a nonresident senior fellow at the Atlantic Council’s Europe Center.

The communiqué confirms NATO’s growing attention to Indo-Pacific security

While the communiqué naturally reflects NATO’s laser focus on the war in Ukraine and the proximate threat from Russia, it also confirms the Alliance’s renewed strength and growing attention to China and the broader Indo-Pacific region.  

Much attention will understandably be paid to the communiqué’s hedging on Ukraine’s eventual NATO membership. But for China, this week’s summit underscores that the war unleashed by its friends in Moscow has single handedly revitalized NATO, which Beijing only recently had viewed (happily) as sinking into irrelevance. This development throws a large wrench into China’s plans to dismantle the US-led alliance network, carve out a sphere of influence in the Indo-Pacific, and transform the rules-based global order.

The document reiterates language in last year’s Strategic Concept on China’s threat to NATO’s “interests, security and values;” “malicious” hybrid and cyber operations; disinformation; and efforts to control key tech sectors, critical minerals, and supply chains. The communiqué also builds on last year’s warnings about China’s “deepening strategic partnership” with Russia to call on Beijing to abstain from all forms of support for Russia’s war against Ukraine—particularly the provision of any lethal aid. 

The call for China to condemn Russia and adhere to the principles of the United Nations Charter—paired with a clear refusal to recognize Russia’s illegal annexations—throws cold water on any hopes that Beijing would be welcomed to facilitate peace negotiations based on Putin’s terms.  

Beijing will be pleased that the document does not include a reference to the opening of a proposed NATO office in Japan, reflecting a lack of consensus on NATO’s role in Asia. But language on the importance of the Indo-Pacific to security in the Euro-Atlantic and specific praise for the contributions of the four Indo-Pacific countries whose leaders are present in Vilnius—Japan, South Korea, Australia, and New Zealand—reflect NATO’s growing recognition that the regions’ fortunes are linked. NATO cannot ignore the threat of war over Taiwan and, as NATO Secretary General Jens Stoltenberg recently put it, “China is watching to see the price Russia pays, or the reward it receives, for its aggression.” 

—David O. Shullman is senior director of the Global China Hub at the Atlantic Council and former US deputy national intelligence officer for East Asia on the National Intelligence Council.

The Biden administration was ‘largely alone’ in blocking Ukraine’s roadmap to membership

NATO fell short of placing Ukraine onto a clear track to Alliance membership, but that cause for membership gained unambiguous momentum at the Vilnius summit. The assertion in the summit communiqué that “Ukraine’s future is in NATO” frustratingly provides no more clarity than the 2008 Bucharest declaration in which NATO first declared Ukraine “will become” a member of NATO. While the Alliance dropped the requirement for Ukraine to jump through the hoops of a membership action plan (MAP)—as was done for the fast-tracked accession of Finland and Sweden—the communiqué states that Ukraine must implement “additional democratic and security sector reforms that are required” which infers an unnecessary de jure MAP.

What we must not overlook or underestimate is the fact that allies brought to the Vilnius summit unprecedented support for Ukraine’s membership aspirations. The warmth with which Zelenskyy was greeted demonstrated how Ukraine is regarded as part of the transtatlantic community. While full allied consensus—a requirement in NATO decision-making—was not achieved, the Biden administration found itself largely alone blocking efforts to provide Ukraine that roadmap to NATO. Even Turkey’s President Recep Tayyip Erdogan asserted that “without a doubt, Ukraine deserves to be in NATO.”  

The key now is to ensure that Ukraine defeats Russia’s invasion quickly and decisively, and to build on the expanded and significant allied support behind Kyiv’s membership aspirations, leveraging the fact that Ukraine today meets the requirements. These are mutually reinforcing goals. Their achievement will make Europe more secure and NATO more powerful. The progress made in Vilnius should make us all the more determined to secure Ukraine’s accession to NATO at the Alliance’s 2024 Washington summit.

—Ian Brzezinski is a senior fellow at the Atlantic Council and a former US deputy assistant secretary of defense for Europe and NATO policy.

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Key to these international aspirations is the US domestic agenda. Expanding access to critical minerals and increasing manufacturing capacity is essential for meeting the Biden administration’s decarbonization targets. Through legislation like the CHIPS and Science Act, the Bipartisan Infrastructure Law, and the Inflation Reduction Act (IRA), Biden has committed to increase domestic mining, processing, and manufacturing operations to boost the US middle class and build economic resilience. Federal policies have created powerful incentives for manufacturers, such as Tesla, Schneider Electric, General Motors, and Ford, to establish manufacturing facilities in North America.

City leaders have taken advantage of recent legislation to deliver economic growth to their communities. The IRA’s incentives for investments in clean energy are prompting the federal government to work closely with US cities to make manufacturing investments that can increase US energy security, reduce emissions, and support domestic manufacturing. Since the signing of the law, companies have  announced 31 new battery manufacturing projects, 96 gigawatts of new clean power to add to the grid, and $210 billion of investments in the electric vehicle (EV) industry, bringing jobs and growth to US cities.

The role of mayors in the clean energy transition

The growing diplomatic power of mayors was on display at the first-ever Cities Summit of the Americas held in Denver in April 2023. The summit fostered conversations on bridging national-level support and community-led action to build robust clean energy supply chains. In Denver, mayors exchanged best practices in taking advantage of recent legislation and establishing clean energy industries. Mayor Tim Kelly of Chattanooga, Tennessee, highlighted workforce development as a central pillar of Chattanooga’s growth in low-carbon industries. Mayor Luis Colosio of Monterrey, Mexico, outlined the importance of overcoming political and regulatory obstacles to usher in major regional projects, like his city’s new Tesla Gigafactory. He also emphasized the need to incorporate community input in municipal investment strategies. 

The summit signaled the administration’s new efforts recognizing cities and city-level decisionmakers as key actors for making progress toward US decarbonization and climate objectives and strengthening ties with like-minded partners across the Western hemisphere. At the summit, the US Department of State also launched a new Cities Forward initiative that aims to strengthen mayoral partnerships by matching US, Latin American, and Caribbean cities to address urban sustainability challenges. Latin America and the Caribbean have abundant mineral resources, and are important allies in the United States’ efforts to establish new clean energy supply chains for products like batteries, solar panels, and EVs. These new initiatives tap into mayors’ dual ability to connect with local constituents and forge international partnerships based on common challenges.

Strengthening partnerships with Latin America and the Caribbean

Regional mayors and officials in Latin America and the Caribbean are crucial partners for ensuring social license to operate given their unique understanding of community concerns and challenges. The region accounts for 35 percent of global production of lithium, 40 percent of copper, and 10 percent of nickel. These resources will play a crucial role in the Western hemisphere’s transition toward renewable energy and electrification and ultimately contributes to global climate objectives.

However, increased mining in Latin America could instigate regional discontent and threaten hemispheric relations if voices of local leaders are not included. In Peru, community backlash against the Chinese-owned Las Bambas copper mine halted production for four hundred days, costing the company $9.5 million per day. In Argentina, protests against a new local mining law led to its swift repeal by a provincial legislature.  Local officials have the convening power to bring communities together to solicit buy-in and leverage opportunities within energy transition supply chains. Peer-to-peer exchanges between mayors like those at the Cities Summit and investment projects such as the Cities Forward initiative can mitigate these challenges by expanding opportunities for cities to reap the benefits of major mining and manufacturing projects.

While individual cities and towns are already stepping up to the plate, national governments need to provide assistance to help cities establish industries across the Americas. Municipalities need workforce development programs to meet the demand from eager investors, standards in environmental, social, and governance (ESG) to attract investment, and resource management to improve their absorptive capacity to accept new projects at scale. By providing greater coordination and resource sharing from both the bottom up and top down, the United States can make progress toward empowering cities and towns to play a role in the clean energy supply chain while benefiting from the industry’s economic growth and opportunities.

Establish technology standards with consultation from local governments 

National policies can be adapted to better suit the needs of local government, but that only happens if local leaders have a seat at the table. The US Government National Standards Strategy for Critical and Emerging Technology released last May calls for new standards to define the development of renewable energy technology, yet includes no mention of perspectives from local governments. The American National Standards Institute (ANSI) should include stakeholders from mayoral and statewide offices to help shape ESG standards for the mining, manufacturing, and producing of critical minerals to ensure that future regulations are strong but not onerous. At an international level, local officials from mining communities should be included in ongoing discussions to set sustainable mining standards in the Americas alongside national governments and the mining industry.   

Establish regional workforce development programs and streamline visa processes

For cities to attract investment and deliver economic benefits for local communities, a trained workforce is required. Technological advancement and increased automation reduce the number of people needed on the assembly line but increases the demand for a highly skilled workforce. For example, US semiconductor companies, buoyed by the CHIPS and Science Act, will have 300,000 unfilled vacancies for skilled engineers by 2030. Beginning with the North America Leaders Summit, the three heads of state should collaborate on establishing North American workforce training programs and streamlined visa processes to create a stronger workforce across the region.

To further promote regional training and information sharing, the Unit for City and State Diplomacy at the US Department of State should organize mayoral convenings on the sidelines of major energy conferences across the region. The Caribbean Renewable Energy Forum in Miami, International Renewable Energy Agency’s Investment Forum in Latin America, and Energy Transition North America present opportunities for mayors to hear directly about investment opportunities and share strategies for meeting industry standards.

Leverage existing subnational networks to communicate USG funding opportunities 

Trusted city networks can magnify the impact of national-level initiatives. In 2022, the US Department of Energy (DOE) announced $39 million in funding for universities, national laboratories, and private sector-led projects to increase domestic supply of critical minerals. The Bipartisan Infrastructure Law appropriated over $62 billion to DOE to support a range of domestic clean energy projects, including grants targeted at local governments. By utilizing already established subnational networks like C40 Cities and The United States Conference of Mayors, the DOE, along with other US agencies, can better disseminate programs and resources available to empower city-level efforts to leverage investments and funding opportunities to power the low-carbon transition.   

From local to global: Strengthening clean energy supply chains

While the United States continues to establish national and international policies to build new clean energy supply chains, cities and towns are implementing national objectives in real time. Across the hemisphere, city councils mediate tensions between communities and mining companies, subnational departments of labor enroll students in training programs, and mayors devise standards to raise the federal ESG benchmark. Local leaders will continue to play a fundamental role in driving both the standards and implementation of projects that will shape a low-carbon energy future. These efforts have been on full display during the Biden administration’s Investing in America tour. 

Maia Sparkman is an assistant director at the Atlantic Council Global Energy Center

Willow Fortunoff is a former assistant director at the Atlantic Council Adrienne Arsht Latin America Center and Fulbright Research Fellow

Meet the authors

Staff

Maia Sparkman

Assistant Director

Global Energy Center

Africa Climate Change & Climate Action

Former staff

Willow Fortunoff

Adrienne Arsht Latin America Center

Americas Caribbean

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The questions surrounding the June 23-24 events—which, were it not for the nuclear warheads and the casualties, would easily merit the qualification of vaudevillian—have multiplied. One is particularly relevant: What are the consequences for the war in Ukraine? More specifically, how does this plot twist affect Europe’s security? 

If one imagines matryoshka dolls (Russian stacking dolls) as a symbol of Russian politics, the Wagner organization has existed because of—and for—Russian President Vladimir Putin. It depended—with all the ambiguity the term implies in the context of the whims of an all-powerful tsar and the personalistic nature of power—on three institutions also apparently controlled by the president: the Russian armed forces, its military intelligence (GRU), and the Federal Security Service (FSB). Notably, the intervention of these institutions in the rebellion—if any—was unclear. 

The structure built by Putin has become a snake pit. Perhaps a “house of cards” is a more fitting term. Having previously refrained from sanctioning Yevgeniy Prigozhin, the ruthless leader of the Wagner paramilitary group, Putin spoke following the mutiny of punishing his enemies, even if such efforts are complicated by Wagner’s penetration into the Russian elite. The first arrest related to these consequences (still unconfirmed) appears to be that of Russian General Sergey Surovikin. 

Prigozhin had been engaged in a power struggle with the military leadership for some time. Specifically, his attacks have targeted Russian Minister of Defense Sergei Shoigu and Chief of the General Staff Valery Gerasimov. The confrontation was exacerbated after last February’s invasion by the increasing relevance that the head mercenary and his followers have gained. Their relative effectiveness compared to the regular Russian army—which collapsed in the early onslaught of the war—brought Wagner into the spotlight inside and outside of Russia. In addition to its military actions, the group’s cruelty went viral on social media, as did its sermons in the courtyards of the prisons Wagner forces toured, recruiting convicted criminals of all kinds.

The mercenary leader’s strong connection with the great leader—a connection forged during the murky stage of the president’s public debut in Saint Petersburg in the 1990s—seemed to give Prigozhin a blank check. He first emerged on the scene as “Putin’s chef,” a nickname earned from managing the catering service of someone well acquainted with the dangers at the table, himself being a master in the use of poison as a political weapon. 

Before the insurrection, the outspoken warrior had been making accusations of all kinds of irregularities, misconduct, and mistreatment against his two enemies: that they had claimed credit for Wagner’s victory in Bakhmut, that men were dying so they could “get fat in their mahogany offices,” and that they had denied his fighters necessary ammunition and support. And, most importantly, that they had deceived Putin about the progress of the military campaign. 

The speech that kicked off the mutiny goes even further. No one had dared to question Putin’s justification of the invasion based on a victim mentality incessantly fed to the Russian people. The few in Russia who dared to dissent, such as Vladimir Kara-Murza, immediately found themselves behind bars. 

Thus, Prigozhin’s words should be considered inflammatory: a qualified member of the establishment dared to openly and boldly denounce the falsehood of “the story that there was insane aggression on the part of Ukraine, and they were going to attack [Russia] together with the entire NATO bloc.” Careful not to mention the president by name, he stated that, contrary to Kremlin messaging, the war served “not to demilitarize and de-Nazify Ukraine,” but rather “it was launched for completely different reasons.” He implied that the disaster was orchestrated by high-ranking military officials (driven by economic greed and vanity), in combination with “some oligarchs.”

Putin’s response was not long in coming. In his televised address on June 24, he labeled the uprising as “a stab in the back of [the] country and [the] people.” His references to the Russian Empire—a frequent topic of his outdated musings—were to be expected, but his implicit identification with the ill-fated Tsar Nicholas II was surprising. 

He equated the situation triggered by Prigozhin to the prelude of the upheaval of 1917, which led to the collapse of the system. Was he seeking, in his association with the tragic figure, a symbolic reincarnation of the tsar—in his case, having made the right decisions to avoid falling into the black hole of violence that characterized those years when “Russians killed Russians, brothers killed brothers”? It was a diatribe made with his citizens in mind, who retain a collective memory of that terrible period and who found their livelihoods crushed during the 1990s following the dissolution of the Soviet Union. 

During the uprising, the lack of response was salient, both from the siloviki (the economic and political elite) and the common people. There was no notable support of—or clear opposition to—Putin, who exploits the fact that people cling to the status quo out of fear of the unknown. 

Prigozhin has nonetheless proven to be a torpedo aimed at Putin’s narrative. He punctured the myth of a war of necessity, of an inevitable war for historical justice. He undermined Putin’s explanation of an existential struggle against US aggression disguised as NATO. Furthermore, the turmoil has shattered the thesis that the Euro-Atlantic community must not humiliate Putin for fear of provoking him, with the unpredictable consequences regarding the use of nuclear weapons that doing so would entail. This thesis has justified the countries’ stinginess in sending to Ukraine certain equipment classified as offensive and the West’s delay in accepting stark realities, such as the urgent need for full operational readiness in the air. 

The Euro-Atlantic community must move away from the habit of delaying decisions based on speculation about the consequences of its actions for third parties. It needs to look beyond the pipe dream of an immediate peace negotiation based on the stalemate on the front or a Kremlin-asserted “right” to subjugated areas. NATO allies’ opportunity to demonstrate determination when facing Russia will come soon—on July 11 in Vilnius at the NATO Summit. 

Ana Palacio is a former minister of foreign affairs of Spain (2002-2004) and former senior vice president and general counsel of the World Bank Group. She is also a member of the Atlantic Council’s Board of Directors.

A version of this article originally appeared in El Mundo. It has been translated from Spanish by the staff of Palacio y Asociados and is reprinted here with the author’s and publisher’s permission.

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“The summit has only one essential outcome,” Doug Lute, a former US ambassador to NATO and member of the Atlantic Council’s board of directors, told me.  “Whatever the agreements on supporting Ukraine, this year it is essential that Zelenskyy be in the photo, capturing vividly that NATO has his back and reminding the world that Russia has no such support.”  

Beyond that, if the Ukrainian leader is photographed standing among the thirty-one NATO heads of state, Zelenskyy more than likely got enough of what he needed to make the trip to Lithuania. When I met with him recently in Kyiv, as part of an Atlantic Council delegation, he said anything short of security guarantees and a clear roadmap to NATO membership for Ukraine would be seen as a betrayal of Ukrainians’ sacrifice.

If Zelenskyy doesn’t come to Vilnius, allied leaders will have missed a crucial opportunity to signal to Ukrainians and the world their unflinching commitment to defeating Russian leader Vladimir Putin’s criminal war and revanchist designs in Europe—at a crucible moment in the five-hundred-day-old war.

Zelenskyy was in Turkey on Saturday as part of a pre-summit European tour, shoring up support from Turkish President Recep Tayyip Erdoğan, who is still withholding his support for Sweden’s membership in NATO. Regarding Kyiv, however, Erdoğan said: “There is no doubt that Ukraine deserves NATO membership.”

Though much still could change before the summit opens on Tuesday, Central European alliance members say that the Biden administration has led the recalcitrance to a stronger, time-linked roadmap to NATO membership for Ukraine.

One Central European senior official, who asked that his name and that of his country not be named, compared the tone coming from the White House to that of Jacques Chirac in 2003, when the French president lectured Central Europeans who were supporting the United States on Iraq that they had “missed a good opportunity to shut up.”

What’s on the table for Ukraine thus far in Vilnius is, among other measures, the renaming of a NATO consultative group to give it more weight, security assurances similar to those the United States has with Israel, and the removal of the bureaucracy of a membership action plan (MAP)—though US National Security Advisor Jake Sullivan said on Friday that Ukraine “needs to take additional reforms,” hinting that it will still face a MAP-like process. Zelenskyy told us in Kyiv that such moves would be insufficient given his country’s service to democracies everywhere.

To be sure, the Biden administration deserves high praise for its handling of Russia’s war thus far, starting with its early leaking of intelligence predicting the invasion so that Ukraine and Europe were forewarned (not to mention China). Without concerted US military and financial support, Ukraine likely would have failed.

 At the same time, if Ukrainians had received the weaponry and equipment they wanted faster and in greater quantities, thousands of Ukrainians would still be alive and the battlefield gains would have been greater.    

Softening the potential blow of a disappointing summit outcome for Ukraine, the Biden administration cleared the way this week to provide Ukrainians with the cluster munitions they have long sought, prompting Zelenskyy to praise Biden’s “decisive steps.”

A form of air-dropped or ground-launched explosives that release smaller submunitions, cluster munitions have been widely used by Russia but are outlawed by many allies, though not by the United States. With Ukraine running low on 155 mm artillery shells, which are in low supply globally, cluster munitions are the fastest, most plentiful way to flush out dug-in Russian positions that are blocking the Ukrainian counteroffensive.

The Biden administration’s green light for cluster munitions has followed a pattern: The White House at first blocks the provision of certain weapons, from High Mobility Artillery Rocket Systems (HIMARS) and Abrams tanks to Patriot air defenses, only to agree to their provision months later. The administration’s go-slow approach to Ukraine’s NATO membership aspirations reflects that caution, born of a desire to defend Ukraine without provoking greater Russian escalation, including tactical nuclear weapons use.

All NATO summits have to balance the longer-term needs of the Alliance with immediate demands. However, officials from non-US NATO member countries who I spoke to last week said there are several reasons why Ukraine’s immediate needs should take on greater priority:

1. Mercenary leader Yevgeniy Prigozhin’s short-lived rebellion in June underscored both the fissures in Russia’s leadership and the low morale and discipline of its military. It’s thus an ideal time to double down on support for Ukraine, recognizing that only significant ground gains can force useful negotiations.
2. Despite the economic and military cost of supporting Ukraine, the costs will grow exponentially if Putin prevails, and the threats go beyond Ukraine. One Biden administration official told me that the geopolitical importance of Ukraine to Washington is far greater than either Afghanistan or Iraq ever was, yet Ukraine can stop Russia at far lower cost and without risking American or other allied soldiers.
3. To argue that NATO membership for Ukraine can only come after the war ends and Russia leaves Ukrainian territory only provides Moscow an incentive to continue the war. Holding back due to concern about Russian nukes rewards Putin’s nuclear blackmail—and will encourage other unsavory leaders to acquire nukes as well.
4. Much is said about why Ukraine needs NATO, but not enough is said about why the Alliance needs Ukraine, now one of the strongest and most battle-hardened militaries in the world. The lesson of NATO in Central and Eastern Europe is that it brings stability to its neighbors and more peaceful and secure relations with Russia. The countries that Russia invaded—Georgia and Ukraine—were gray zones outside any military alliance. “Gray zones are green lights” for Putin, argues former US ambassador to NATO Kurt Volker.
5. Putin thus far has been wrong to count on Ukrainian failure and Western fatigue, but the dangers will grow in 2024 when the United States and much of Europe face elections. Bold decisions that can be made in 2023 will be much more difficult to achieve next year. Ukraine’s biggest threat might be the election year of 2024, and not just in the United States.

“We don’t any longer have the luxury of time,” one senior European official told me. “We certainly don’t have the luxury of getting it wrong. The stakes are too large—they are generational and go far beyond NATO’s borders.”   

Frederick Kempe is president and chief executive officer of the Atlantic Council. You can follow him on Twitter @FredKempe.

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ECONOMIST

The Economist breaks down the lessons of the Ukraine war and what they mean for the future of warfare. Read the whole report to gain a deep and nuanced understanding of the implications for future military planning.

“[T]he paradox of the war,” the Economist writes, “is that mass and technology are intimately bound together. Even the artillery war shows this. Weeks before the invasion, America sent Ukraine Excalibur shells. Inside each was a small, rugged chip that could receive GPS signals from America’s constellation of navigation satellites. Whereas Russia often relied on barrages over a wide area, Ukrainian gunners could be more precise.”

This, the Economist argues, portends a shift towards the defensive, analogous to the late nineteenth century. “Precision warfare can counter some advantages of mass: Ukraine was outnumbered 12 to one north of Kyiv. It can also complement mass. Software-based targeting saves around 15-30% in shells, according to sources familiar with the data. But what precision cannot do, says Michael Kofman of the Centre for Naval Analyses (CNA), a think-tank, is substitute for mass.” Read more →

#2 Ukraine wants and expects an invitation to join NATO. Allies are not sure.
David L Stern, Emily Rauhala, and Isabelle Khurshudyan | WASHINGTON POST

For an understanding of what Ukraine seeks at the upcoming NATO summit in Vilnius, what might happen, and what the Ukrainians are worried about, read this excellent piece of reporting from David Stern, Emily Rauhala, and Isabelle Khurshudyan in the Washington Post.

“With or without membership,” they write, “Ukrainian officials are looking for security commitments by Western nations ‘without delay and as soon as possible,’ which would potentially encourage Moscow to withdraw its forces. Many analysts say Russian President Vladimir Putin is counting on Ukraine’s Western supporters to grow exhausted and halt the expensive flow of weapons and economic aid they have been sending to Kyiv. Such security guarantees could also serve to deter Russia from any major acts of aggression in the future. ‘I am sure that if the regime in the Kremlin does not change in the coming years, even after our victory, there will be — in their heads — a desire for revenge,’ [Ukrainian Defense Minister Oleksii] Reznikov said.” Read more →

#3 Putin’s Real Security Crisis
Andrei Soldatov and Irina Borogan | FOREIGN AFFAIRS

For another angle on the implications of Prigozhin’s failed coup, read this smart analysis of the failure of the Russian security services during the coup and Putin’s apparent non-response to that failure.

“Then, as Wagner forces made their move,” Soldatov and Borogan write, “both the FSB and Russia’s National Guard, the main body assigned to maintain internal security and suppress unrest in Russia, failed as rapid response forces. The National Guard made every effort to avoid a direct confrontation with Wagner; for its part, the FSB—which also has several elite special forces groups—did not appear to take any action at all. Instead, the most powerful security agency in the country issued a press release calling on Wagner’s rank and file to stay out of the uprising and to go arrest Prigozhin—on their own.”

And yet, they note, no one has yet been punished.

“This lack of repercussions for the security services is particularly startling in view of the FSB’s performance in the crisis. When Prigozhin captured the headquarters of the Southern Military District—where he spoke to [Deputy Minister of Defense Yunus-Bek] Yevkurov and [First Deputy Head of the GRU Vladimir] Alekseyev—it looked almost like a hostage taking of several of Russia’s top military commanders. Yet according to sources in the FSB, in response to the arrival of Wagner forces, the FSB agents in Rostov-on-Don simply barricaded themselves in their local headquarters… While a column of Wagner mercenaries marched toward Moscow, taking down helicopters and shooting into the houses of civilians on the way, these brave generals failed to show up—not at the scene or in front of the public at all.” Read more →

#4 Multilateral Man Is More Powerful Than Putin Realized
Anne Applebaum | THE ATLANTIC

In this must-read profile of NATO Secretary General Jens Stoltenberg, Anne Applebaum makes a powerful case for why Stoltenberg’s brand of quiet multilateral leadership will ensure Ukraine’s long-term integration into Europe from behind the scenes.

“[A]lthough historians will argue about whether NATO countries could have done more to deter Russia, they did much more to help Ukraine than Putin expected once the war began. Putin not only underestimated Ukraine; he also underestimated Multilateral Men—the officials who, like Jens Stoltenberg and his counterparts at the European Union, helped the White House put together the military, political, and diplomatic response. Putin believed his own propaganda, the same propaganda used by the transatlantic far right: Democracies are weak, autocrats are strong, and people who use polite, diplomatic language won’t defend themselves. This turned out to be wrong. “‘Democracies have proven much more resilient, much stronger than our adversaries believe,’ Stoltenberg said. And autocracies are more fragile: ‘As we’ve just seen, authoritarian systems can just, suddenly, break down.’” Read more →

#5 Evan Gershkovich, Detained for 100 Days
WALL STREET JOURNAL

As a former Wall Street Journal reporter and longtime advocate for press freedom, I remain determined to do what’s possible to end the Russian imprisonment of WSJ reporter Evan Gershkovich, which is now at one hundred days and counting. I urge Inflection Points readers to follow the WSJ’s guide on what you can do to support Evan and his family.

Writes Emma Tucker, the WSJ’s editor-in-chief, “In the days since Evan was arrested we have been inspired by the support that you, our readers, have provided. It has helped us to keep Evan’s plight at the top of the news agenda. As we reflect on this difficult milestone, we encourage you to continue sharing Evan’s reporting and the latest updates on his situation. Journalism is not a crime, and we will not rest until Evan is released.”

Amen. Read more →

Atlantic Council top reads

New Atlanticist Jul 5, 2023

Here’s the ‘concrete’ path for Ukraine to join NATO

By Franklin D. Kramer, Hans Binnendijk, Christopher Skaluba

The upcoming NATO summit in Vilnius should establish a High Level Group to design a roadmap for Ukraine’s fast-track membership.

Conflict Crisis Management

New Atlanticist Jul 6, 2023

Ukraine needs NATO membership, not an ‘Israel model’

By Ian Brzezinski

Granting NATO membership to Ukraine is critical to ensuring it wins the war against Russia quickly and decisively.

Israel NATO

New Atlanticist Jul 6, 2023

Four scenarios for Russia’s future after the Wagner Group mutiny

By Jeffrey Cimmino

What will be the long-term aftermath of Russia’s Wagner mutiny? Here are four possible paths for Russia’s future the West should consider.

Belarus Crisis Management

The post Dispatch from Vilnius: Will Zelenskyy show at the summit? It depends on whether Biden listens to frontline NATO allies. appeared first on Atlantic Council.

Already, cities around the world are facing intense heat waves. Several European and Southeast Asian countries broke records for their hottest temperatures. The southern United States has been hit by a long-lasting heat dome; parts of India have sweltered under 47°C (116°F) heat; and areas of North Africa reached temperatures of 50°C (122°F) this year.

The worse news? This summer will likely get even hotter. 

As the urgency of this issue becomes impossible to ignore, many local governments are taking action to build heat resilience. At the Atlantic Council’s Adrienne Arsht-Rockefeller Foundation Resilience Center (Arsht-Rock), we work closely with cities around the world to protect the people most exposed to the dangerous impacts of climate-driven extreme heat. Here are four examples.

Seville: Naming heat waves is changing the way people understand extreme heat

Seville, Spain, has been leading the charge on naming extreme heat events. So far, Seville has experienced two named heat waves: Zoe in July 2022 and Yago in June 2023. 

Seville has named heat waves through a naming and categorization system called proMETEO. This system, piloted by Arsht-Rock in collaboration with the University of Seville and Seville City Council, monitors the weather forecast and categorizes heat waves into three tiers ranging from least (Category One) to most severe (Category Three). 

Seville is in its second year of naming and categorizing heat waves. In addition to better protecting Seville’s residents, this project is creating important social dialogue on the harmful impacts of extreme heat, and it is serving as a model for other cities to pilot similar initiatives.

Miami: The world’s first Chief Heat Officer is tackling heat head-on

Miami, where temperatures routinely hit the high 90s, was the first city in the world to appoint a Chief Heat Officer (CHO). CHOs are officials supported by Arsht-Rock’s Extreme Heat Resilience Alliance who are responsible for unifying their city governments’ responses to extreme heat. 

Miami’s CHO, Jane Gilbert, has more than thirty years of experience working in climate resilience. She has worked closely with Miami-Dade County Mayor Daniella Levine Cava to launch the Miami-Dade County Extreme Heat Action Plan, which outlines nineteen key actions to protect people from extreme heat, including cooling schools and expanding access to shade and water.

In her role as CHO, Gilbert has implemented extensive heat season campaigns to raise awareness on the dangers of extreme heat. She also manages mobile Community Resilience Pods, which empower people to prepare for climate stressors through educational storytelling. 

Freetown: Outdoor market shade covers are providing relief for more than 2,300 women

In Sierra Leone’s capital, extreme heat is devastating for outdoor and informal workers, who spend long hours laboring in extreme temperatures. Many of these workers are women and girls, who face disproportionate health and social impacts from extreme heat.

Arsht-Rock has been working with Eugenia Kargbo, Freetown’s CHO, and a network of partners to address this. Through the Freetown Market Shade Cover project, Arsht-Rock installed shade covers over three outdoor markets, expanding the daily window for safe and comfortable shopping in hot conditions. 

The Market Shade Cover project has given more than 2,300 market women better working conditions and economic opportunities. By minimizing the health impacts, food spoilage, and financial losses resulting from extreme heat, this intervention has benefitted entire communities dependent on the market women. 

Santiago: New partnerships are protecting the most heat-vulnerable workers 

Even though Chile’s capital has a cool and temperate climate, Santiago has been scorched by extreme temperatures in recent years. Local authorities are taking a wide range of approaches to build heat resilience, from advocating for workers’ protection policies to providing air-conditioned ambulances to more than twenty-five communities. 

Santiago’s CHO, Cristina Huidobro Tornvall, partnered with the Chilean Security Association (ACHS), an entity representing more than one million Chilean workers, to promote heat safety measures among outdoor workers. Together, they are educating employers on how to recognize and respond to the dangers of extreme heat. 

The partnership’s goal is for employers to institute practices to protect their workers and provide health coverage for workers injured on the job. To this end, ACHS is planning to monitor how often workers seek medical care for exposure to extreme heat, which will help inform worker protection policies.

Cities are a crucial part of the solution

Severe heat can arrive with little or no warning. However, there are several steps cities can take in advance to prepare for extreme heat events.

• Cities can conduct baseline heat risk assessments to understand which communities and parts of the city are most vulnerable to extreme heat.

• Cities can create heat action plans that identify strategies and responsible actors in advance of extreme heat events.

• Cities can implement educational campaigns in advance of heat seasons to build public awareness of the dangers of extreme heat.

Arsht-Rock’s Heat Action Platform brings together diverse case studies of these solutions with guidance on how to plan for, finance, and implement projects into one comprehensive platform. The platform is designed to be a step-by-step guide for those starting out their heat resilience planning, as well as a reference guide and implementation resource for cities already well into the heat-planning process.

Local leaders are positioned to take these ideas and run with them. Cities have an urgent responsibility to respond to climate change. Billions of people are already living with the impacts of extreme heat, and even more will become more vulnerable as the world continues to urbanize. We already have the solutions, knowledge, and resources needed to protect people from heat—now, we just have to take action.

Kashvi Ajitsaria is a project associate at the Adrienne Arsht-Rockefeller Foundation Resilience Center.

The post How four cities are building resilience to extreme heat appeared first on Atlantic Council.

On Wednesday, Swedish Prime Minister Ulf Kristersson met with US President Joe Biden in Washington DC, followed by a meeting between Swedish, Finnish, and Turkish foreign ministers in Brussels on Thursday. The central message: Sweden is ready to become an ally—immediately.

For several months, Turkish President Recep Tayyip Erdoğan has kept Sweden and NATO allies on the edge of their seats over Swedish extraditions of individuals connected to the Kurdistan Workers Party (PKK). Stockholm and Ankara have been at an impasse, trading arguments over due process and terrorist threats. Enflaming the whole process has been a series of Quran burnings, something which Kristersson has said is legal, but not respectful.

Just like at the NATO Summit in Madrid last year, Erdogan has placed himself in the role of kingmaker. All allies except Turkey and Hungary have ratified Sweden’s membership, and Hungary is widely considered to be following Turkey’s lead.

In the symbolically important meeting with Kristersson this week, Biden sent a clear signal to Ankara: The United States is committed to welcoming Sweden into NATO as soon as possible. Kristersson reiterated that Swedish membership would contribute to the security of the Alliance as a whole. “No country knows this better than the United States,” he said. 

The trilateral meeting in Brussels showed, however, that Turkey is still not on board. Swedish NATO membership is “within reach,” Stoltenberg said. He added that everyone is working toward a positive outcome in Vilnius and leaders will meet again on Monday, one day before the start of the summit.

Potentially paving the way for a successful outcome is this week’s conviction by a Swedish court of a PKK member for the crime of terror financing, the first use of the country’s new anti-terror laws that entered into force in June. The four-and-a-half-year sentence followed by a possible extradition is exactly the type of implementation Turkey has wanted to see from Sweden. Moreover, former Foreign Minister Ann Linde admitted this week that Sweden had not taken the threat posed by the PKK seriously enough in the past. Swedish police are now prioritizing the issue and deeper cooperation with Turkish authorities on combatting terrorism is expected to continue. Public opinion is also shifting, with a majority now in favor of banning the burning of religious texts. Hate speech laws, though not part of the trilateral memorandum, are additionally under review. All the while, rumors continue to swirl of the US Congress ending its roadblock on F-16 fighter jet sales to Turkey, a prospect that could help push the process across the finish line. 

At stake in Vilnius is not only the security of Sweden and the Alliance as a whole, but NATO’s open-door credibility. With twenty-nine allies already having ratified Sweden’s membership, failure to fully admit Sweden undermines unity within the Alliance and makes NATO look weak and fragmented. As Stoltenberg correctly pointed out on Thursday, only Russian President Vladimir Putin and the PKK profit from continued delay. 

Anna Wieslander is director for Northern Europe at the Atlantic Council and head of its Northern Europe office in Stockholm. She is a former official at the Swedish Defence Ministry and Swedish Parliament.

Eric Adamson is project manager at the Northern Europe office.

The post Will eleventh-hour diplomacy get Sweden into NATO by the Vilnius summit? appeared first on Atlantic Council.

Security

Russian missile strike in Lviv kills ten civilians, injures dozens

Tracking narratives

New narrative accuses US and Ukraine of planning false flag attack on Zaporizhzhia nuclear power plant

Media policy

Former employees share details about Prigozhin’s media group and troll farms

Kremlin-owned RT offers jobs to former employees of Prigozhin’s troll factory

Russian missile strike in Lviv kills ten civilians, injures dozens

At least ten people were killed and thirty-seven injured in Russia’s July 6 attack on Lviv, in western Ukraine. Regional Governor Maksym Kozytskyy said that a Russian missile struck a residential building in the city, destroying more than fifty apartments. 

Meanwhile, Russian forces continue to launch offensive actions in Donetsk and Luhansk oblasts. Ukrainian forces reported thirty-eight combat engagements against Russian troops near Novoselivske, Novohryhorivka, Berkhivka, Bohdanivka, Bakhmut, Avdiivka, and Marinka. In the direction of Lyman, Russian forces shelled Nevske, Bilohorivka, Torske, Verkhnokamyanske, and Rozdolivka in Donetsk. Russian aviation conducted an airstrike in Bilohorivka. Russia also attacked villages in Zaporizhzhia and Kherson oblasts, including Levadne, Olhivske, Malynivka, Huliaipole, and Bilohirka. On July 6, Russian troops shelled Chervonohryhorivka and Nikopol, damaging civilian infrastructure.  

On July 5, reports from Russian military bloggers suggested that Ukrainian forces had advanced southwest of Berkhivka, west of Yahidne, and southwest of Bakhmut. The Ukrainian army said it conducted offensive operations south and north of Bakhmut and is moving on Bakhmut’s southern flank. The Russian Ministry of Defense claimed that the Ukrainian army conducted offensive operations near Lyman, Bakhmut, along the Avdiivka front, on the border between Zaporizhzhia and Donetsk, and in western Zaporizhzhia. 

The Ukrainian army appears to have launched a coordinated attack on Russian army logistical and communications hubs. On July 4, Ukrainian forces reportedly struck an ammunition depot in occupied Makiivka, Donetsk. Russian sources claimed without evidence that Ukraine had struck a hospital. Former Russian army commander Igor Strelkov, also known as Igor Girkin, said the attack demonstrates how Ukraine regularly launches missile strikes against Russian rear targets. Other unconfirmed reports from July 5 indicate Ukraine may have struck Russian positions near Debaltseve. Russian sources claimed that Ukrainian forces hit Russian positions near Yakymivka in the Melitopol area and attempted to strike Berdyansk in the Zaporizhzhia region.

—Ruslan Trad, resident fellow for security research, Sofia, Bulgaria

New narrative accuses US and Ukraine of planning false flag attack on Zaporizhzhia nuclear power plant

Ahead of next week’s NATO Summit in Vilnius, Lithuania, allegations that the United States and Ukraine will launch a false flag operation on the Zaporizhzhia nuclear power plant are spreading on various platforms, including Twitter, 4chan, and Instagram. The allegations seemingly aim to create panic and, in the event of a future attack on the plant, establish a narrative the West and Ukraine are to blame. 

On July 3, a post appeared on 4chan from an anonymous user who introduced himself as a US Marine Corps veteran now working for the government in electronic espionage. The user claimed that the Ukrainian and US governments are working together to bomb the Zaporizhzhia power plant. According to the conspiracy theory, after the false flag operation, the United States will be able to use “nuclear warheads” against Russia. At the time of writing, the post had been deleted from 4chan. However, similar posts remain on the platform.

However, the false flag claims did not originate on 4chan. Russian Twitter accounts posted similar claims building the false flag narrative. After the 4chan post, the claim circulated again on Twitter.  

A similar narrative was also shared by Renat Karchaa, an adviser to Rosenergoatom, a subsidiary of the Russian state nuclear agency Rosatom. Karchaa claimed on Russian state television channel Russia-24 that on the night of July 5, the Ukrainian army would attempt an attack on the Zaporizhzhia plant. Without evidence, he accused the United States and the West of planning a false flag incident to damage Russia’s reputation. The claims were further amplified by Russian state media outlets.  

The allegations escalated on social media after July 4, when Ukrainian President Volodymyr Zelenskyy repeated Ukraine’s concerns about the status of the nuclear power plant. In an address, Zelenskyy restated that Russia plans to attack the plant and that Russian troops have placed explosive-like objects on the building’s roof. In June, Ukrainian military intelligence made similar claims when it reported that the plant’s cooling pond had been mined by Russian troops.  

On July 5, the International Atomic Energy Agency (IAEA) said that it was aware of reports that mines and other explosives had been placed around the plant. The IAEA said their experts inspected parts of the facility and did not observe any visible indications of mines or explosives. IAEA Director General Rafael Mariano Grossi added, “The IAEA experts requested additional access that is necessary to confirm the absence of mines or explosives at the site.” On July 7, the IAEA announced that Russia had granted its experts further access, “without – so far – observing any visible indications of mines or explosives.”  

—Sayyara Mammadova, research assistant, Warsaw, Poland

Former employees share details about Prigozhin’s media group and troll farms

Several independent Russian media outlets published stories this week interviewing former employees of Yevgeny Prigozhin’s Patriot Media Group, which dissolved on June 30.  

In a video published on Telegram, Yevgeny Zubarev, director of Patriot Media Group’s RIA FAN, said the goal was to “work against the opposition, such as Alexei Navalny and others who wanted to destroy our country.” Zubarev confirmed key details previously reported by independent Russian journalists at Novaya Gazeta in 2013 and the now-Kremlin-controlled RBC in 2017 about the existence of paid commentators and the creation of Prigozhin-affiliated media outlets. Zubarev added that, after Russian President Vladimir Putin’s 2018 re-election, the group hired “foreign affairs observers.” The timing corresponds with attempts by Prigozhin’s Internet Research Agency to meddle in the 2020 US presidential election. 

Further, independent Russian media outlets Sever.Realii, Bumaga, and Novaya Gazeta interviewed former employees of Prigozhin’s media group. Speaking on the condition of anonymity, the former employees confirmed that Prigozhin’s “troll factory” and “media factory” conducted coordinated information attacks on opposition leaders, published fabricated or purchased news “exclusives,” praised Putin, and deliberately ignored particular individuals who criticized Wagner Group. Bumaga and Sever.Realii described a smear campaign against Saint Petersburg Governor Alexander Beglov. In 2019, Prigozhin’s media group supported and promoted Beglov, but in 2021, Prigozhin reportedly launched a smear campaign, as Beglov allegedly prevented him from developing a waste collection business in the city. Novaya Gazeta’s report also provided evidence that Prigozhin’s troll farm activities extended beyond Russia, with employees portraying skinheads and fascists in the Baltic region, specifically in Lithuania. 

In recent years, additional revelations about Prigozhin’s media group have come to light. For example, Bumaga reported that prospective hires had to pass a “lie detector test” in which “security service specialists” asked candidates about their attitudes toward the opposition and Alexei Navalny in particular. Once hired, employees were closely surveilled. One former employee Bumaga interviewed characterized the atmosphere as being in a “closed military company.” Both Bumaga and Novaya Gazeta’s interviewees said that most of the employees did not believe in the mission. In one example, an employee left after refusing to launch a smear campaign against Ivan Golunov, a journalist at the independent news outlet Meduza who was detained in 2019 under false pretenses. Bumaga, citing an unnamed former employee, also reported that at one point an employee had hacked the system, erased a database, and fled to Poland. The same interviewee claimed they employed two Telegram administrators who also administered pro-Ukraine channels.

—Nika Aleksejeva, resident fellow, Riga, Latvia

Kremlin-owned RT offers jobs to former employees of Prigozhin’s troll factory

RT Editor-in-Chief Margarita Simonyan offered to hire employees of Yevgeny Prigozhin’s Patriot Media Group, which reportedly housed his troll factories. In the latest episode of the program Keosayan Daily, Simonyan praised the work of “Wagner’s media empire.” She said their work “was super professional” and that anyone left without a job can join “them,” referring to Russian propaganda outlets. She added, “We know you as professional colleagues of ours.” 

The fate of Patriot’s former employees is being actively discussed in Russia. According to Russian outlet Novie Izverstia, Pavel Gusev, editor-in-chief of the pro-Kremlin outlet MK.ru, volunteered to help find jobs for former employees of Patriot. In addition, the chairman of the Saint Petersburg branch of the Union of Journalists of Russia stated that the union would contact the heads of media outlets to help find opportunities for dismissed employees and would provide additional informational support.

—Eto Buziashvili, research associate, Tbilisi, Georgia

The post Russian War Report: Russian conspiracy alleges false flag at Zaporizhzhia nuclear plant appeared first on Atlantic Council.

The run-up to the July 11-12 summit in Lithuania has revealed both continuity and chaos: Continuity in that NATO Secretary General Jens Stoltenberg will now stay on in his role for another year, after he had earlier said he would step down in the coming weeks; chaos in the fascinating but incomplete coup d’état in Russia. But at this juncture of history—with war raging in Ukraine, uncertainty complicating relations with China, and shifting internal political landscapes in some member states—the Alliance has more work to do to ensure that the international rules-based order remains relevant and potent. 

Ukraine’s desire for a firm commitment on joining NATO is likely to hover over the summit. The secretary general and other national leaders have expressed reservations about taking any groundbreaking action on the issue, tempering the expectations of Ukrainians and their most vocal supporters. Yet there is still time to formulate consensus language that goes beyond the empty narrative of the 2008 Bucharest Summit, which only said that Ukraine would become a member at some point.

Assessing the threat picture

Defense spending is a perennial focus at these summits. Since the Alliance’s founding seventy-four years ago, the issue of Europe’s underspending on defense and security has haunted the halls of NATO. While the current ambition to set 2 percent of gross domestic product as a floor is a step in the right direction, success remains far-fetched: Only seven of the then thirty allies met the guideline in 2022 (before Finland’s accession). At the same time, success is very real in strengthening the cyber pledge and the official launch of the NATO Innovation Fund, the first-of-its-kind one billion euro multi-sovereign venture capital fund. Good things can happen in Vilnius.

The question is, will those good things include welcoming Sweden to the Alliance? The puzzle of the Turkish hayir, or no, on Sweden’s accession initially seemed like a misunderstanding, later evolved into a national election issue, and now, unfortunately, has become an example of allied disunity. The same goes for Hungary’s unacceptable drag of the ratification. Yes, allies argue all the time, and NATO offers a forum to align on all the important issues. Democracies know how to deal with these disagreements without compromising members’ security. Without Sweden, NATO is weaker, the Baltic Sea is less secure, and Turkey and Hingary, too, will be less secure.

Taking a step back and looking at the threat picture—and at the elevated volatility due to Russia’s brutal war against Ukraine—one cannot help but ask: What do allies need to do to ensure that NATO remains relevant in deterring aggression against the Alliance and beyond? Are NATO members sufficiently protecting its most vulnerable members and its vast geographic boundary to the east? Does “tripwire” deterrence still work? Can deterrence succeed without proper defense? 

Last year, NATO leaders in Madrid made huge promises to be specified and agreed in due course—kicking the can down the road?—on strengthening the eastern perimeter with more troops and better readiness. In other words, the initial enhanced Forward Presence (eFP) battalions no longer seem to suffice for effective deterrence on the eastern flank. The same goes for reinforcements, which had been signaled as up to 300,000 troops (and now 400,000 troops), yet whose deployment requires both logistical support and prepositioned equipment and armaments for their deterrent role. All of the above is to be underscored by NATO’s new defense plans, which are in the works.

A speed-and-scale mindset

To make deterrence and defense credible, NATO must make key decisions to act at relevant speed and scale. “Tripwire” deterrence is, hopefully, outmoded thinking—and the realization that defense is a key element of deterrence is slowly setting in. To be fair, it took three years for NATO to set up its eFP in the form of multinational forces in Estonia, Latvia, Lithuania, and Poland. Can the Alliance be taken seriously if it continues to build its defense at this pace? 

The same goes for scale. Will the “brigade-per-country” principle become obsolete in a year or two? A piecemeal approach to defense yields great public relations benefits, many pats on the back, and self-congratulatory speeches. But at the end of day, when an adversary moves further, allies are left scrambling precisely because they underdelivered. 

Speed and scale call for more allied troops in place, more prepositioned equipment and ammunition, and swift reinforcement—plus the autonomy of NATO’s supreme allied commander. Essentially, it is a resource question, yet it is affected by how urgently the Western public views the existential threat. If the military and economic support the West has provided to Ukraine so far is a gauge of its threat perception, then there is something to be proud of. Yet much more could have probably been done and faster. 

The test in Vilnius will be this: Can leaders adopt a speed-and-scale mindset for a stronger deterrence?

Giedrimas Jeglinskas is a nonresident senior fellow at the Transatlantic Security Initiative in the Atlantic Council’s Scowcroft Center for Strategy and Security. He previously served as the assistant secretary general for executive management at NATO and as the deputy minister of defense of Lithuania in charge of capability development, defense acquisition, industry, and technology partnerships.

The post The view from Vilnius: NATO needs speed and scale to ensure deterrence  appeared first on Atlantic Council.

The post Peterson in Real Clear Defense: Ukraine War Highlights a New Threat to the American Homeland appeared first on Atlantic Council.

• Key terminology
• The navy’s approach to strategy development and force planning
• The sources of the problem
• Problem definition
• Key issues shaping problem solution
• Recommendations
• First recommendation: Establish a new assistant secretary of the navy
• Second recommendation: stand-up the navy strategy cell
• Third recommendation: Stand-up the force planning directorate
• Resourcing the recommendations
• Conclusion
• About the author

Key terminology

This paper uses five key terms. The first two, force design and force development, are precise US Navy terms that are not interchangeable.

Force design is the innovation and the determination of future Navy ships, aircraft, and weapon systems, along with a warfighting concept for a twenty-year and beyond timeframe. Force development is the adaptation and modernization of Navy in-service ships, aircraft, and weapon systems, along with a warfighting concept within a two-to-seven-year timeframe. The difference between these two official Navy terms may seem arcane: force design is all about the future force, and force development is all about the current force. However, both address Navy requirements based on an appraisal of US security needs, and then choose naval capabilities (along with a warfighting concept) to meet those requirements within fiscal limitations.

The following terms are also important for the reader’s comprehension.

• Force planning is the more commonly understood term—used in place of force design and force development—and is used across Congress, defense media, academia, and industry. While force planning is not an official Navy term, the term is used in this paper to encompass both force development and force design.
• Force structure is used by the Congress to mean the number and types of combat units the Navy can generate and sustain, as well as to represent the Navy’s combat capability.
• Budget is an informal and shortened expression to encapsulate all Navy activities in the Defense Department’s Planning, Programming, Budgeting, and Execution (PPBE) system, especially the programming activity.

The navy’s approach to strategy development and force planning

The US Navy’s approach to strategy development and force planning in 2023 is not working. Strategy development is on life support and force planning uses an incremental approach of buying marginally better and more expensive versions of the same platforms the Navy has relied upon for decades. In effect, it is producing the Navy’s force structure one ship class at a time, without reference to an overall Navy strategy and force plan to field an integrated, aligned, and synchronized “Navy fighting machine.”¹ Moreover, this approach is delivering an unaffordable fleet over too long a procurement time. Proposals for developing new capabilities are viewed as threats to in-service platforms and programs, thereby blocking innovation.

Congress, defense media, defense analysts, the Defense Department, and independent US government agencies have all found fault with the US Navy’s strategy development and force planning. Most notably, Congress has expressed its dissatisfaction.

In December 2017, Congress mandated a Navy with 355 crewed ships, a goal based on the Navy’s 2016 Force Structure Assessment (FSA) and, in February 2020, Representative Joe Courtney (D-CT) complained to then Secretary of Defense Mark T. Esper about, “the lack of a shipbuilding plan and the [Donald] Trump administration not delivering a strategy to build a 355-ship Navy.”² In December 2021, Congress mandated the Navy to submit the Battle Force Ship Assessment and Requirement Report on its force structure plans for the near, middle, and far terms to meet the combatant commanders’ requirements using Defense Department-approved scenarios.³ However, Congress reacted with little enthusiasm for the Navy’s thirty-year shipbuilding plan for fiscal year 2023 (FY2023), despite its being the first such report from the Navy to Congress in more than three years, and was similarly unimpressed by the following year’s iteration. This has led Congress to mandate the establishment of an independent National Commission on the Future of the Navy in December 2022 to determine the size and force mix of the fleet by mid-2025.⁴

This litany of events—particularly the unprecedented direction for the Navy to submit the Battle Force Ship Assessment and Requirement Report, the establishment of an independent National Commission on the Future of the Navy, and the assignment to the commandant of the Marine Corps of sole responsibility to develop amphibious warfare ships requirements—indicates Congress’ displeasure with Navy force planning. Moreover, the inability of the Department of Defense (DoD) and Navy leaders to consistently state how many ships the Navy needs to meet its requirements may be a driving factor in Congress’ decision to legislate these unprecedented mandates. During the first seven months of 2022, DoD leaders suggested five different targets for the objective size of the Navy—316, 327, 367, 373, and five hundred.⁵ In addition, the use of three options in both the FY2023 and FY2024 thirty-year shipbuilding plan—rather than a single projection—handicaps congressional understanding of the Joe Biden administration’s goals concerning the future size and composition of the Navy, and assessing the Navy’s proposed FY2024 shipbuilding budget, five-year shipbuilding plan, and thirty-year shipbuilding plan. Moreover, to follow its mantra of providing best military advice to civilian leadership, the Navy must have a preferred option for what it needs to get the job done, and, most importantly, must assess the risk to the United States if it does not get the resources it needs (see Table 2).

As Dr. Scott Mobley pointed out in his November 2022 Proceedings essay, the Navy largely focuses on programming and budget to develop the means for strategy while “devaluing the strategic underpinnings for rationalizing and justifying those means.”⁶

Navy force planning uses a piecemeal approach—“buying at the margin [fewer, but] better [and more expensive] versions of the same [type] of platforms [the Navy] has relied upon for decades”—that is delivering an unaffordable fleet over too long a procurement time.⁷ Navy force planning almost always occurs in a resource-constrained environment imposing a zero-sum approach, in which proposals for new capabilities are frequently viewed as threats to in-service platforms, thereby blocking innovation. At the end of the day, the Navy’s new platforms, weapons, and systems are quite similar to what is already in the fleet.

The preponderance of the Office of the Chief of Naval Operations (OPNAV) platform and capability staffs each focus on a single platform or capability. No one looks at all the platforms and capabilities as an integrated, collective whole. No single staff entity ensures all these individual platform and capability staffs are integrated by a well-articulated, comprehensive strategy and warfighting concept to achieve the required strategy-force match.

The Navy cannot create a lasting OPNAV organizational structure to ensure its strategy drives its force planning and its budget in that order. OPNAV cannot conduct its business “with strategic intent” at all times in its key processes. Because it operates within the Defense Department’s mandated five-year Future Years Defense Program and is focused on the budget, OPNAV tends to concentrate on numerous process-centric products, which, coupled with cascading short-term urgent projects, frequently sees its strategic guidance displaced, or even lost, in the sausage making.

The continuing need to reconcile the interface between the Navy’s strategy with its mid-range to long-range forecasts, and between the Navy’s budget and its short-term timelines and all-consuming fiscal pressures, has eluded OPNAV. Numerous OPNAV reorganizations since the early 1980s underscore this observation. As a 2010 Center for Naval Analyses study highlighted: “successive CNOs have sought to make [OPNAV] responsive to their needs—chief among which is usually construction of a balanced and integrated program and budget.”⁸ They failed and, as a result, the Navy continues to address its force requirements incrementally, which frustrates innovation, alarms Congress, and delivers fewer, more expensive, and almost always bigger platforms. The various uncrewed surface vessels and aircraft may break the bigger-is-better paradigm, yet they are arriving too slowly.

The sources of the problem

The causes of the Navy’s problem with its approach to strategy development and force planning are numerous and diverse.

Divergent CNO proclivities prevent strategic consistency

Effective force planning suffers from insufficient strategic consistency between chiefs of naval operations (CNOs). The historical record suggests these service chiefs seem to believe they must differentiate themselves from their predecessors, with their own distinct, separate strategy—or what is typically a strategic, aspirational plan rather than a strategy with ends, ways, and means. As Dr. Peter Haynes explained in his book, Toward a New Maritime Strategy:

Assuredly, senior Navy leaders would agree that, regardless of who is the CNO, the Navy has enduring institutional objectives and the benefits of consistency would be enormous for strategy development and force planning. There would be: assured continuity of strategic direction over the fielding of major platforms and weapons systems; no requirement for an incoming CNO to craft a “new” Navy strategic direction from whole cloth; unity of effort on the Navy’s way ahead based on organizational agreement hammered out at four-star updates; a consistent Navy message for strategic communications; and reduction in false starts and nonproductive efforts (see Table 1).

The service needs each CNO to build upon what has gone on before so that the Navy can benefit from continuous unity of effort over time. The service also needs a consistent planning process, and not a completely new version to accompany the incoming CNO’s new strategy. The challenge is to sustain consensus in a planning and acquisition process that runs a decade or more, and is instigated by a CNO who typically serves a four-year tenure.

OPNAV’s budget process dominates strategy and force planning

OPNAV remains focused on the budget as its overarching and defining process, believing strategy can be generated during the budget process. This narrow focus constrains the development of long-range strategies and plans to address transcendent challenges and opportunities. There is an irreconcilable difference between the needs of the budget process and the strategy-development process.

In a 2021 interview, a former deputy director of the Integration of Capabilities and Resources Directorate (OPNAV N8), Irv Blickstein, provided an explanation of why the budget process dominates. First, it is impossible to follow literally the linear prescript of strategy, requirements, and budget. If a strategy is unaffordable, then capability trade-offs must be made. The budgeteers knew that just opining about strategy would not carry the day for funding. Instead, the Navy needed analysis to show the effectiveness of its programs and the validity of its arguments. As deputy programmer in OPNAV in the early 1980s, Blickstein noted:

In June 2015, the Naval Postgraduate School published a report on strategy’s role to drive the Navy’s budget process. The report’s principal findings stated that the “Navy has failed to ensure that strategy and policy priorities drive [budget] development and execution.” Specifically, within OPNAV, the budget process “eclipses strategy” and “is substituted for, and is often equated to, strategy.”¹¹ The report noted that the Integration of Capabilities and Resources Directorate, a directorate that acts essentially as OPNAV’s Chief Financial Officer, “wields most of the intra-bureaucratic authority and power when it comes to the making and implementation of strategy” and that the Operations, Plans, and Strategy Directorate (OPNAV N3/N5), with its strategy staff, does not “play meaningful role in strategy development and execution.” During his tenure as CNO (2015–2019), Admiral John Richardson attempted to change this attitude. His efforts did not succeed.

Currently, there are significant alignment issues among the budget process, strategy development, and long-range planning processes. The budget process focuses on a five-year period and emphasizes the application of quantitative analysis, which is effective for near-term resource decisions. However, with no clear-cut beginning or end to its annual cycle, the budget process dominates all OPNAV planning activities and “tends simply to encourage the continuation of programs already under way” and discourage “the development of fresh new alternatives.”¹² The Navy needs to avoid defaulting to budget execution to develop its strategy. All strategies are shaped and informed by available resources, but the budget should serve the strategy—not the other way around.

Currently,the responsibility to manage the Navy’s force-planning ecosystem is dispersed throughout OPNAV. The Warfighting Development Directorate (OPNAV N7) addresses force design. The Integration of Capabilities and Resources Directorate (OPNAV N8) addresses the quantitative means to support force design and development, and the Warfighting Requirements and Capabilities Directorate (OPNAV N9) addresses force development and force design. The CNO’s Commanders Action Group provides the terms of reference—strategic guidance—for force design and force development. The Naval Warfare Development Center produces warfighting concepts, such as the current Distributed Maritime Operations (See Figure 1).

Each of these responsibilities must occur, but they are uncoordinated. No directorate integrates these force-planning efforts along with the ongoing production of new ships, aircraft, and weapons to produce a unified Navy fighting machine. As a result, decisions about production of new forces and modernization of in-service forces directly shape decisions about determining future platforms and capabilities, and vice versa. This interrelationship among force development, force design, and the production of new platforms and capabilities demands alignment, integration, and synchronization into a comprehensive process—not as individual platforms and capabilities—along with a shared understanding of the future security environment and a common warfighting concept to deter and defeat future adversaries in specific time periods.

Furthermore, this dispersion of force-planning responsibility has harmful consequences. In February 2022, OPNAV sponsored a workshop, titled the Force Design Sprint, to assess the Navy’s force-design posture. At the conclusion, a senior N7 leader informed the author that the workshop determined, “everyone in OPNAV was in charge [of force design], but no one was in charge.” It was an astonishing discovery for a military service to declare no one in OPNAV actually held responsibility for force design, with its focus on future ships, aircraft, and weapon systems, along with warfighting concepts for the twenty-plus-year time horizon.

Insufficient strategic guidance misdirects force planning

The Navy lacks sufficient and coherent guidance to ensure strategy shapes its budget and warfighting concepts. It has no classified strategy to facilitate an unambiguous expression of its ends, ways, and means. It has no codified assessment of both the current and future security environments to provide baseline understandings of them and set conditions for effective concept-driven, threat-informed capability development. Another missing document is a warfighting concept for the 2040s timeframe. The result is that, in 2023, specialized N9 staffs are planning the next-generation platforms without the benefit of a common set of capstone strategic guidance. (See Figure 1a)

Navy platform communities distort force planning

Internecine warfare by the Navy’s three platform communities (its surface, aviation, and submarine communities) severely unbalances the Navy as a whole. Expected in theory to rise above their individual platform advocacy and warfare concerns, the communities are all too susceptible to pressures and rivalries from the others. Each warfare community produces an unclassified strategic guidance document with little regard for how the other communities interact and cooperate to generate a unified Navy fighting machine.

Problem definition

In response to this criticism, CNO Admiral Michael Gilday reassigned force-design responsibilities to N7 and focused its efforts on 2045, as outlined in the CNO’s 2022 Navigation Plan.¹³ However, the Navy has largely already decided upon a 2045 force design and, moreover, the Navy is full speed ahead on its implementation. The year 2045 is only about twenty years away, well within the service life for the ongoing production of new ships, aircraft, and weapon systems. CNO Gilday has approved the Navy’s future direction for its next generation of platforms and capabilities, which N9 has developed with the priority order of acquisition as the next-generation aircraft first, the next-generation destroyer second, and the next-generation attack submarine third.¹⁴ This prioritization seems to cement the aircraft carriers as the Navy’s warfighting center of gravity, rather than precision weapons launched from a variety of air, surface, and subsurface platforms.

The long-term problem confronting Navy strategy development and force planning is larger than reassigning force-design responsibility to N7. The Navy needs to address the problem of how it conducts and organizes for strategy development and force planning in toto, not as disparate processes. Based on this paper’s assessment of the Navy’s strategy development and force planning posture, the Navy faces a three-part problem.¹⁵

• Part one: How does the Navy produce “a force structure, now and in the future, of the right size and the right composition (force mix) to achieve the nation’s security goals, in light of the security environment and resource constraints” and avoid a strategy-force mismatch?¹⁶
• Part two: How does the Navy ensure its strategy—based upon codified current and future assessments of the security environments, along with associated warfighting concepts—drives force-planning decisions in its budget process, and not have those decisions made by default?
• Part three: How does the Navy ensure its force-planning activities include revision of existing warfighting concepts and development of new ones that fully integrate all platforms to produce a single, lethal Navy fighting machine?

Key issues shaping problem solution

Several key issues significantly influence the formulation of recommendations to improve Navy strategy development and force planning.

Organizing OPNAV for effective strategy development

Given the enduring nature of developing, maintaining, updating, and iterating capstone strategic guidance, a dedicated strategy staff (to include responsibility for long-range planning) must have continuity and longevity. Because this guidance is so central to the Navy’s future, their production cannot be an on-again-off-again process. The key is for the CNO to select its director and have confidence in its staff. Once a strategy staff is up and running, the Navy needs to keep it in place. If the CNO is unhappy with its product, he or she should certainly bring in their own selectee to run the show, but the organization itself needs to retain its role, rather than being shoved aside and replaced with a new, favorite staff group.

Avoiding a federated organization to conduct force planning

OPNAV is using a federated organizational construct, which is problematic for conducting force planning. This construct attempts to achieve simultaneously decentralization of responsibilities and unity of effort. It supposedly unites, under a central entity, diverse responsibilities along with distinctive, associated processes, but with the responsibilities still controlled by different and independent entities. It is aspirational and relies on goodwill to meet mission in lieu of a hierarchical structure with authorities to make hard decisions and not focus on achieving consensus. Given the importance of successful force planning to the Navy, the organizing model to follow is a dedicated entity reporting directly to the CNO, such as the Navy Strategic Systems Programs and Naval Nuclear Propulsion, which, respectively, have cradle-to-grave responsibility for sea-launched nuclear-deterrent capabilities and for the Navy’s nuclear propulsion. The Navy needs to borrow a page from these two organizational successes and establish a dedicated, single entity responsible for all matters pertaining to force planning. The CNO’s force-planning responsibilities are so vast in scope, so complex, and so critical, that the Navy cannot disaggregate them across the OPNAV staff or employ a federated construct. It needs to establish a dedicated entity reporting directly to the CNO.

Providing CNO’s direct oversight of force planning and strategy

Only the CNO and the vice chief of naval operations (VCNO), with the authority vested in their offices, can ensure OPNAV maintains a strategic focus. They alone can focus the staff to keep the Navy’s strategic direction front and center, to drive force planning and the budget. The vice admirals who are the deputy chiefs of naval operations leading the seven major functional directorates cannot do it individually; they are challenged enough to meet the urgent demands of the budget process and the press of their daily business.

Understanding defense-analysis limitations to support force planning

Quantifiable defense analysis makes a strong contribution to force planning, especially in the near and middle terms, by understanding trade-offs among platforms and weapons systems. Defense analysis—operations research, campaign analysis, and systems analysis—has restricted relevancy to force planning with its long-range focus of twenty or more years into the future. Defense-analysis methods require certainty of data before they can productively yield reliable certainty in answers. The Navy’s current force-structure assessment methodology, which uses these quantifiable defense analysis tools, will be hard pressed to generate useful data about the long term. Its processes require data for modeling that are simply unavailable twenty years from now—hence, the need for a strong component of risk analysis, wargames, red teams, and alternative-futures work.

Incorporating net assessment capability to support force planning

Force planning requires long-range comparative assessment of trends, key competitions, risks, opportunities, and future prospects of Navy capability. Net assessment provides this comparison of red-blue interaction, using qualitative and quantitative factors across alternative future scenarios. The Navy cannot predict the future with certainty. However, net assessments generate a spectrum of needed capabilities for the Navy to draw upon. The Navy needs this capability because its reliance on campaign analysis, systems analysis, and operations research is grossly unbalanced. The Navy needs to conduct force planning based upon an assessment of the future security environment, and then use tools such as strategic wargames, emulations, expert-panel reports, and net assessment to build a strategy and a warfighting concept, and derive required capabilities. Once that is done, the quantifiable tools can refine the types and number of capabilities.

Clarifying N7 and N9’s force-planning roles

Force planning encompasses force design (i.e., the future fleet) and force development (i.e., the current fleet). CNO Gilday reassigned force-design responsibility from N9 to N7 in July 2022. In reality, N9 will likely continue to conduct force-design responsibility as it determinines the next generation of platforms for operational employment in the 2040s. Given all the approved and funded N9 force-design activity to plan the 2040s Navy, N7’s force planning responsibilities are far from clear.

Incorporating the secretary of the Navy into force planning

Secretary of the Navy Carlos Del Toro has signaled caution and unease with Navy force planning, and wants a realistic approach to understand the total cost and impact of the next-generation destroyer, attack submarine, and crewed/uncrewed aircraft. He wants to test new technologies for these platforms before any production. Given the Navy’s uneven track record in planning and delivering surface ships, along with the issue of affordability to fund an immense recapitalization, his caution is warranted.

Evaluating new technologies and concepts for force planning

The Navy is replacing in-service platforms with newer, follow-on versions, with the exception of uncrewed platforms. This is significant because strong platform attachment may be preventing the Navy from embracing new technologies and warfighting concepts. More importantly, such a possible attitude may prevent the Navy from understanding the changing character of war at sea. For example, because of the convergence of technologies, by 2045 the air and surface domains might become so significantly transparent that, in the competition between the “finder” and the “hider,” the finder might well dominate. If this is correct, surface ships and even aircraft will be increasingly vulnerable to continuous enemy tracking, targeting, and long-range attacks, thereby ending their role—or, at a minimum, severely limiting it—as the principal means of conventional naval power projection. Such an outcome has enormous consequences for the design of a 2045 Navy fleet.

Communicating Navy force-structure requirements

Given the December 2022 establishment of the National Commission on the Future of the Navy and the new reporting requirement for a Battle Force Ship Assessment and Requirement Report in December 2021, the Navy’s strategic-communications capability appears to have had little effect in countering the criticism of its force-planning efforts. The Navy’s strategic communications require an adjustment.

Recommendations

The overarching intent of these recommendations is to link OPNAV’s strategy, analysis, and budget processes. This is a challenge, as the work among the budgeteers, analysts, planners, and strategists is so different. Producing a budget is incremental work that “involves a great deal of analysis and negotiation, over and over again, year after year” and requires “orthodox bureaucratic labor.” Conversely, producing a strategy or a warfighting concept demands “unorthodox leaps of thought—of drawing exceptional inferences from exercises, war games, technology, intelligence, and events.”¹⁷

Historically, with a few notable exceptions, effectively linking these two groups has eluded OPNAV. Consequently, the recommendations address eliminating this gap by consolidating force-planning functions under the direct and strategic oversight of the CNO and VCNO to ensure the linkage between these two groups is maintained. In effect, force planning becomes OPNAV’s center of gravity, with the production of the budget in support.

The logic behind these recommendations is straightforward. The recommendations are governed by an overarching objective to ensure that the Navy’s strategy and policy priorities drive its force planning and budget, not the other way around. The Navy needs to build its forces and capabilities to implement the CNO’s recommended strategy. Force planning begins with that strategy, but the force-planning staff does not create that strategy; the origins of that strategy reside in the CNO’s personal domain, drawing upon higher-level guidance such as the National Defense Strategy. Using the CNO’s strategy, the force-planning staff determines the naval tasks required, and the problems and impediments—such as geography and the adversary’s capabilities—in the current and future security environment that must be surmounted. This activity, in turn, drives the development of warfighting concepts, which leads to the discovery of required naval forces and capabilities and their associated attributes (i.e., operational requirements). Finally, force planning calculates the number and mix of forces and capabilities required to achieve the strategy.¹⁸ The following recommendations make this logic a reality.

The eleven primary documents written by the proposed Navy Strategy Cell and the Force Planning Directorate would not be carved in stone and immutable like the Ten Commandants. In the final analysis, they would be the CNO’s documents. Vitally, they would be developed through the active participation of the Navy’s four-star leadership to identify the biggest challenges to the service’s continued relevancy and contribution to national security, and to devise a coherent approach to overcoming them, which the Navy senior leaders would hammer out and support. The purpose of this effort is to define how the Navy will move forward over successive five-year increments of the budget-planning process, with its senior leaders sharing and agreeing to a common approach. It is all about institutionalizing a force-planning process that can endure over decades from first inception to acquisition to initial operational employment, all managed by relatively short-tenured senior leaders.

Obviously, as the threat, budget, technology, and higher-level policy change, the CNO would update these documents on an annual basis, such as the process the Navy employed in the 1930s with at least nineteen major iterations to its War Plan Orange, and in the 1980s with several successive versions of the Maritime Strategy. Full participation of serving four-star and selected three-star admirals in this process will be vital, because, without question, one of these flag officers will become the next or subsequent CNO. If this participation does not occur, the probability for false starts and radical course changes will greatly increase as CNOs change.

First recommendation: Establish a new Assistant Secretary of the Navy

The secretary of the Navy should establish an assistant secretary of the Navy for strategy, concepts, and capabilities (ASN/SC&C) to assist the uniformed Navy (See Figure 2). The standing up of this position would deliver that assistance without needing another management layer. Instead, it offers enormous, impactful benefits by providing the secretary of the Navy the means to ensure:

• Alignment of both Navy and Marine Corps resources, activities, and capabilities with the strategic military objectives and force planning goals of the National Defense Strategy and National Military Strategy;
• Synchronization of Navy and Marine Corps force planning by integrating their efforts at the service-chief level, as well as at developmental level between the Navy’s Naval Warfighting Development Center and the Marine Corps’ Warfighting Laboratory;¹⁹
• The establishment of a strategy-focused counterpart to the assistant secretary of the Navy for research, development, and acquisition (ASN/RDA), and a vital interface with the assistant secretary of defense for strategy, plans and capabilities (ASD/SPC);²⁰
• The development of a single Navy Department strategy, vis à vis the three separate strategies of the department, Navy, and Marine Corps;
• Reform of Navy force-planning activities, reinvigoration of Navy strategic expertise, and the promotion of a strategy-centric culture in both the secretariat and OPNAV; and²¹
• A resolution of protracted issues and problems bedeviling Navy strategy development and force planning.

The final benefit has immense implications, and requires elaboration. The number of issues and problems confronting Navy strategy development and force planning seem almost enduring, foster significant congressional concern, and underscore the compelling need for great secretariat and OPNAV integration. On its own, the Navy has been unable to solve, correct, or mitigate these issues and challenges. Examples of such issues and problems that substantiate the services of a new assistant secretary are as follows.

Increasing affordability of platform

In June 2021, then acting Secretary of the Navy Thomas Harker signed a memo addressing Navy funding priorities in its fiscal year 2023 planning cycle to match fiscal guidance from the Office of the Secretary of Defense.

However, it was not until January 2023 that the Navy explicitly admitted that it could not afford all three major acquisition programs simultaneously, when the Navy announced that the order of acquisition as first is Next Generations Air Dominance (NGADS), then Next-Generation Guided-Missile Destroyer program (DDG(X)), and finally the Next-Generation Attack Submarine program (SSN(X)).²³

Navy platforms keep getting bigger and more expensive

Strong platform attachment may be preventing the Navy from embracing new technologies and concepts, and consequently replacing in-service platforms with newer, follow-on versions. Navy force planning uses an incremental approach—“buying at the margin [fewer, but] better [and more expensive] versions of the same [type] of platforms [the Navy] has relied upon for decades”—that is delivering an unaffordable fleet over too long a procurement time.²⁴

Proposals for new capabilities can be viewed as threats to in-service platforms, thereby blocking innovation. Quite often, the Navy’s new platforms, weapons, and systems are quite familiar to what is already in the fleet. The DDG(X) is the large surface-combatant replacement for the Arleigh Burke (DDG-51) class Aegis destroyers, currently still being procured by the Navy. A November 2022 Congressional Budget Office report on the Navy’s FY-2023 thirty-year shipbuilding plan states, “the Navy has indicated that the initial [DDG(X)] design prescribes a displacement of 13,500 tons,” about 39 percent greater than the 9,700-ton Flight III DDG-51 design.²⁵ There are media reports that actual displacement may be closer to fifteen thousand tons, which would make them comparable to a World War II heavy cruiser.

Technological developments are changing the character of warfare.

The principal means of conventional naval power projection are transforming, and this has enormous consequences for the design of a 2045 Navy fleet. According to US strategist Andrew F. Krepinevich, Jr., a disruptive shift is occurring from “precision-warfare regimes” to an emerging one based on “a new military revolution” incorporating “artificial intelligence, additive manufacturing, synthetic biology, and quantum computing, as well as military-driven technologies, including directed energy and hypersonic weapons.”²⁶ Krepinevich cautions that, too often, the US military gets the cart before the horse by fielding capabilities based on new technologies and not addressing “how these new capabilities would maintain their effectiveness” as a technological revolution matured, as was the case with the Navy’s next-generation cruiser.²⁷ Unfortunately, as of May 2023, such strategic-planning documents do not exist for the US Navy.

Ineffective strategic communications

The Navy’s poor strategic-communications practices are exemplified by its annual, unclassified thirty-year shipbuilding plan.²⁸ The plan fulfilled its purpose, but it was devoid of even a summary of a rigorous, unclassified, analytical rationale to make the case for a larger, more lethal Navy. With that, political leadership could understand the Navy’s defense role and support its claims upon the nation’s resources. It was a missed opportunity to strategically communicate the Navy’s case for resources to one of the Navy’s most important audiences.²⁹ The Navy does not know how to communicate its force requirements consistently. The best construct for Navy strategic communications is to use platforms. Right now, the Navy is using platform attributes—such as “Ensure Delivery,” which conjures images of Domino’s Pizza or Amazon delivery services—to communicate its requirements to Congress and the American people. Aircraft and ship types are not abstract; they are real things that people can easily visualize when they hear their names—submarine, destroyer, aircraft carrier, and jet fighter, among others.

An a-strategic Navy culture

Strategy is not an institutional Navy value; the service values operational and technocratic expertise above all. Indeed, one telling example illustrates this attitude. Unlike the five other armed services, the Navy does not formally board its selectees to attend the war colleges as students; in effect, the Navy assigns whoever is available. The Navy largely focuses on programming and budget to develop the means for strategy, while “devaluing the strategic underpinnings for rationalizing and justifying those means.³⁰ Regrettably, the Navy has become, “a technocracy—a technologically centered bureaucracy,” with the CNO and OPNAV staff acting as the “Navy’s lead programmers and budgeters, incentivizing a career system that rewarded officers who acquired the technical skills needed for these roles,” but not incentivizing a career path for strategists.³¹

A prescient 1984 US Naval Institute Proceedings essay encapsulated the Navy’s astrategic culture: “The finest personal accolade an officer can receive is, ‘He’s a great operator.’”³² However, the essay identified a major shortcoming these “great operators” have: they experience, “great difficulty comprehending or even identifying—long-term problems” and are, “convinced that only short-term problems are real, and that continued solutions to each in turn will eliminate or indefinitely postpone the distant ones.”³³ As a consequence of this attitude, the Navy cannot determine a lasting OPNAV organizational structure to ensure its strategy drives its force planning and its budget, in that order. On its own, the Navy cannot sustain its strategy enterprise over the long haul. Underscoring this assessment is the current lack of capstone strategic and force-planning guidance. The Navy does not have:

• A classified version of a combined “2020 Advantage at Sea” and “2022 Navigation Plan” to facilitate a clear and unambiguous expression of Navy ends, ways, and means along with such topics as strategic assumptions, risk, capacity, concepts, and threats;
• A classified assessment of the current and future security environments to provide baseline understandings of operating environments, setting conditions for effective concept-driven, threat-informed capability development;
• A classified warfighting concept for the 2040s timeframe;
• A classified red-blue net assessment at the strategic level;
• A classified description of a red-blue war; and
• A classified Navy long-range plan.

Competition among the Navy platform communities

The internecine warfare between the Navy’s three platform communities (the surface, aviation, and submarine communities) can severely unbalance the Navy as a whole. For example, the aviation tribe focuses on strike from the air; the submarine tribe on strike from the subsurface; the surface tribe on strike from the surface; and the amphibious tribe on strike across the beach. All the while, it is unclear if anyone is asking two fundamental questions: “What are we trying to do? And how can we accomplish this in a far more effective way than we can at present?”³⁴ Invariably, there is a competition among tribes for manpower and funding, resulting in disagreements over strategy and the allocation of resources. Reaching consensus among them has always been difficult, and remains a fundamental service chief responsibility.

As defense secretary, Mark T. Esper rejected the Navy’s force plans.

Esper wanted more attack submarines and a mix of light aircraft carriers (large-deck amphibious ships with F-35B aircraft) for more operational choices and affordability.³⁶ He did not want a plan bounded by past warfighting constructs and irrelevant to a future fight with China.³⁷ Because the naval-warfare tribes could not give him what he wanted, he directed Deputy Secretary of Defense David Norquist in the spring of 2020 to lead a new force-structure assessment study to maintain naval dominance.

Each warfare community produces an unclassified strategic guidance document—the aviation community has Navy Aviation Vision 2030–2035, the submarine community Commander’s Intent 4.0, and the surface community has Surface Warfare: The Competitive Edge. Each document, for the most part, encompasses community strategy, planning, policy, and vision topics about operations, capabilities, and personnel. There is little in each document about how that community interacts and cooperates with the other two to generate a unified Navy fighting machine. The lack of stated cooperation among the aviation, surface, and submarine-warfare communities in these documents is palpable. The three communities act like a true team of rivals whose intra-service actions have contributed substantively to the establishment of the National Commission on the Future of the Navy.

To resolve these and other such issues and problems challenges, the secretary of the Navy’s role in strategy development and force planning needs to be strengthened by the services of this new assistant secretary.

Second recommendation: Stand up the Navy strategy cell

The CNO should repurpose his Commander’s Action Group as the Navy Strategy Cell to produce the Navy’s capstone strategic guidance and to monitor its implementation by this one, central, and empowered staff entity reporting directly to the CNO (See Figure 2).

All CNOs understand that their most important responsibility as a service chief is to identify the biggest challenges to the Navy’s continued relevancy and contribution to national security, and to devise a coherent approach to overcoming them. This fundamental role serves as the basis for this recommendation. A 2010 Center for Naval Analyses report bluntly stated that developing and implementing such guidance “for the Navy is the CNO’s number 1 job.”³⁸ Indeed, from what many senior OPNAV veterans have privately communicated to the author, if this responsibility is not “totally owned by CNO,” OPNAV has no strategic focus. They believe the CNO most important responsibility is identifying the biggest challenges to the Navy’s continued relevancy and contribution to national security, and devising a coherent approach to overcoming them.

Already working directly for the CNO, the Commander’s Action Group produces strategic documents such as the annual posture statements, congressional testimony, keynote speeches, and the 2022 Navigation Plan. Building upon this foundation, the proposed Navy Strategy Cell would be uniquely positioned to describe preferred outcomes for the whole Navy. OPNAV’s seven directorates, on the other hand, tend to focus on the outcomes of individual supporting programs. With expansion, empowerment, and augmentation, the Navy Strategy Cell would:

• Enable the CNO to break away from the budget and programming processes that dominate so much of OPNAV’s time and thinking, and increase his or her focus on realistic and effective strategies and concepts for fighting at and from the sea;
• Strengthen the CNO’s ability to align and coordinate the activities of Navy organizations; communicate with a single Navy voice to external and internal audiences; and assess Navy policies, budgets, plans, and programs, and the resultant allocation of scarce resources; and
• Ensure capstone strategic documents reflect a consistent and aligned set of principles, concepts, and tenets regarding the Navy’s fundamental role in implementing national policy, as well as the CNO’s direction.

This recommendation mirrors what most corporate chief executive officers do, which is to make their capstone strategy functions a direct report to the chief executive officer. Consequently, this is no longer a lead role for N3/N5. Every CNO requires the direct support of a staff to provide a coherent, contemporary, authoritative body of Navy strategic thinking—comprehensive in scope—that they can use to help conceptualize, develop, coordinate, maintain, communicate, refine, and assess their thinking. The CNO needs to be optimally assisted and supported by a small, dedicated strategy staff, which is a corporate best practice. The production of capstone strategic guidance and other strategic documents requires a close relationship and physical proximity to the CNO, with no interlocutors. It is a one-on-one relationship between the CNO and, in effect, their “chief strategist” residing in the Navy Strategy Cell. The one-on-one relationship is needed to:

• Implement explicit CNO guidance, not guidance altered by OPNAV directorate agendas;
• Provide unfiltered advice, especially alternative views to CNO; and
• Do it quickly and with a minimum of interference from others.

Capstone strategic guidance describes how CNO intends to overcome “the biggest challenges to the Navy’s continued relevancy and contribution to national security”³⁹ across different timeframes and security environments. These documents require significant CNO involvement, visibility, and signature. They provide overarching direction to the service for planning, programming, and budgeting future forces, force planning, and operational employment, and convey fundamental principles about the application of naval power to achieve national policy goals. They drive all subordinate force-planning efforts and connect the Navy’s annual budget submissions and investment plans with the Navy’s key priorities. These documents are truly primus inter pares. They are consequential and substantive, must be derived from national and joint policy and strategy, and reflect a comprehensive, global view informed by the Navy’s current and future capabilities. The Navy Strategy Cell would draft for the CNO’s signature classified and unclassified versions of these four documents that comprise the Navy’s capstone strategic guidance (i.e., its “crown jewels”).

• Assessments of Current and Future Security Environments (classified and unclassified versions do not currently exist).
• The Navy Strategy (classified version does not currently exist).
• Navy Long-Range Plan (classified and unclassified versions do not currently exist).
• CNO’s Annual Budget Guidance (classified).

Third recommendation: Stand up the force-planning directorate

The CNO should consolidate all OPNAV force-planning responsibilities into a new Force-Planning Directorate under a vice admiral reporting to the VCNO and disestablish N7 (See Figure 2).

The unprecedented wakeup call from Congress, when it established an independent National Commission on the Future of the Navy, is sufficient reason to consolidate Navy force-planning efforts under one roof and reform them.

The Navy’s current federated organizational construct to force planning is ineffective. It is unclear in 2023 what OPNAV staff element acts as the central entity to coordinate all OPNAV force-planning efforts conducted by decentralized and independent staff elements. The functions of force planning are expansive, complex, and critical, as Congress just reminded the Navy. In recognition of the weakness of the federated approach, the Navy should follow its own successful examples of non-federated entities reporting directly to the CNO—the Strategic Systems Programs and Naval Nuclear Propulsion—and consolidate all matters pertaining to force planning into a new and dedicated single entity.

This single, dedicated Force-Planning Directorate would have the authority, staffing, and analytical means, to align, integrate, and synchronize the force-planning efforts into a comprehensive whole-of-Navy strategic plan. The relationship among force development and force design, as well their connection to the production of new ships, aircraft, and weapons systems, demands alignment, integration, and synchronization into a comprehensive force-planning blueprint.

This Force-Planning Directorate would have the authority, personnel, and analytical means to align, integrate, and synchronize all force-planning efforts to produce a Navy fighting machine. The new directorate would assess and integrate the future operational environment, emerging threats, and technologies to develop and deliver concepts, requirements, and future force designs, and support delivery of modernization solutions. Most importantly, it would position the Navy for the future by setting strategic direction, integrating the Navy’s future force-modernization enterprise, aligning resources to priorities, and maintaining accountability for modernization solutions.

The budget dominates all OPNAV activities. The only way to guarantee the budget supports and serves the needs of Navy strategy and force planning is to ensure the CNO or VCNO has direct oversight via a dedicated senior leader who has no other writ. The director of the new Force-Planning Directorate should report to the CNO via the VCNO. A Force-Planning Directorate addressing force design with its long-range time horizons and long-range results will not survive in an environment dominated by short-term results unless OPNAV clearly understands that the Force-Planning Directorate is working directly for the CNO, and that the OPNAV directorates have a supporting relationship to this new staff. As the Navy historical record documents, anything less than a direct report will repeat OPNAV’s past mistakes and failed attempts.

The Force-Planning Directorate would draft for the CNO’s signature classified and unclassified version of these seven documents.

• Warfighting concepts (current and future): Classified and unclassified versions do not exist for the 2045 timeframe. A classified version for the current timeframe exists (i.e., distributed maritime operations), but not an unclassified version. The Naval Warfare Development Center would support the development of these service-level concepts.
• Red-blue net assessment: Classified and unclassified versions do not currently exist.
• Description of a red-blue war (current and future): Classified and unclassified versions do not currently exist.
• Force Structure Assessment: Unclassified versions do not currently exist. The June 2023 Battle Force Ship Assessment and Requirement Report will provide a classified version.
• Navy force planning blueprint (current and future): Classified and unclassified versions do not currently exist.
• Thirty-year shipbuilding plan: An unclassified version exists.
• Battle force ship assessment and requirement report: A classified version exists. The June 2023 version of this report could potentially serve as a classified Force Structure Assessment.

The Warfighting Concepts would establish a baseline understanding to set conditions for effective concept-driven, threat-informed force planning, in order to produce a Navy Force Planning Blueprint. It would be based on a common understanding of the current and future security environments and a shared articulation of how the Navy fights as a whole, and not merely as a collection of individual classes of platforms. It would be the Navy’s comprehensive plan—not a strategy—to integrate, align, and synchronize all its force-planning efforts, including the efforts of force development and force planning along with the ongoing production of new ships, aircraft, and weapons systems to produce the Navy fighting machine (i.e., a unified combination of air, surface, and subsurface Navy lethality). Figure 2a depicts the consolidated production of the Navy’s eleven key strategic guidance documents from numerous OPNAV organizational elements to just two.

Establishment of this new Force-Planning Directorate topples the budget process as OPNAV’s dominant process. Force planning would become OPNAV’s center of gravity, with the budget in support, and no longer the other way around. It turns over the proverbial apple cart, with force planning reporting directly to the CNO and leading a strategic-centric staff dialogue, as opposed to a budget-centric dialogue. This reversal will generate strong resistance from N8 and N9 in particular. Because the Force Planning Directorate will be the primus inter pares, and as the other OPNAV directorates are all headed by a vice admiral, the new Force-Planning Directorate must likewise be headed by a vice admiral or else be doomed to failure.

This new Force-Planning Directorate requires the capability to conduct Navy net assessments for strategic analysis of red-blue interactions for informed and realistic plans. Net assessments (along with defense analysis) are diagnostic means, whereas force planning is a prescriptive means. The two belong together; if not, dysfunction will continue to hamstring efforts. This capability does not currently exist in OPNAV, and would require new personnel resources.

Resourcing the recommendations

The resources to make these recommendations real are readily available; it is just a matter of resetting priorities. The Navy is under heavy congressional fire for its strategy-development and force-planning efforts. Correcting this situation for the long term is surely one of the Navy’s highest priorities.

Given these circumstances, can the Navy say, for example, that the large number of officers assigned to the front office of its three-star leaders is more important than staffing its capability for strategy development and force planning? Again, it is a matter of priorities. If staffing these front offices is more important than retrieving control of force planning from the National Commission on the Future of the Navy, then so be it. It is simply a matter of priorities, and making the tough choices that many leaders say they like to do. Here is another opportunity.

For the reasons presented in this paper, leadership of the Navy Strategy Cell and Force-Planning Directorate requires senior flag officers. Disestablishing the N7 directorate would provide the vice admiral billet to lead the Force-Planning Directorate and a rear admiral billet to head the Navy Strategy Cell. The majority of N7’s functions can return to OPNAV N3/N5 and a portion of N7’s functions can relocate to staff the Navy Strategy Cell and the Force-Planning Directorate.

While there are no perfect organizational frameworks, there are organizational frameworks that better align a greater number of common functions, as outlined in these recommendations. A strategy office reporting to the corporate chief executive officer—in the Navy’s case, the CNO—is a proven practice, and a direct-report senior leader responsible for all Navy force planning is no different than having the Naval Nuclear Propulsion and Nuclear Weapons Program/Strategic Systems Programs as direct reports.

The emphasis of the proposals in this white paper is on strategy-development and force-planning reinvigoration and reasonable consolidation of similar functions, given the centrality of Navy strategy and force planning to all other OPNAV responsibilities. Force planning, if done properly with strategy in the lead and with its capstone strategic-guidance documents, will generate enormous benefits.

Conclusion

Congress has lost patience and confidence in the Navy. There is no way to sugarcoat this action. It is nothing less than a strong condemnation of the Navy’s approach to strategy development and force planning. When US Representative Rob Wittman (R-VA) in December 2022 penned his scathing commentary in Defense News, he was on target in stating, “if the Navy refuses to learn lessons from this year, it will be doomed to repeat them.”⁴⁰

The warning signs have been evident for years. However, much like the Navy’s Bureau of Ordnance’s stubborn, twenty-one-month resistance in World War II to correct three major defects of the Mark 14 torpedo, the Navy since the end of the Cold War has neglected its strategy enterprise and resisted effective force planning.⁴¹ It has repeatedly failed to understand and act on the mismatch between OPNAV’s robust organization for building the budget and its ineffective organization for developing and implementing Navy strategy.

The Navy needs to think and act like it did in the 1920s and 1930s, when it prepared to confront the Imperial Japanese Navy. The US Navy’s strategy, future security environment, and warfighting concept were all reflected in nineteen iterations to its War Plan Orange and updates to the Rainbow series of war plans. The Naval War College focused its curriculum and wargames throughout the 1930s on defeating the Imperial Japanese Navy, and almost every Navy flag officer was a war-college graduate. While far from perfect, the Navy of the past shared a common view of what a war with Imperial Japan entailed and clearly understood logistics were a top-tier priority for warfare across the vast distances of the Pacific. Likewise, in 2023, the Navy needs the same level of focus and preparation as its predecessor, and the proposed Navy Strategy Cell and Force Planning Directorate will help ensure it is ready for whatever lies ahead.

The author would like to be more of an optimist than a realist, but the Navy continues to allow mistakes to go uncorrected decade after decade. It is, like Winston Churchill stated, a “long dismal catalogue of the fruitlessness of experience and the confirmed unteachability of mankind.”⁴² It is foolish to believe that the Navy will change on its own to conduct more effective strategy development and force planning.⁴³ The only way the Navy will change is for Congress to direct it, or else the Navy will continue with its flawed ways.

About the author

Bruce Stubbs

As a member of the Senior Executive Service for the Department of the Navy, Bruce Stubbs served on the Chief of Naval Operations (OPNAV) staff from June 2011 to September 2022 as the Director of Strategy and Strategic Concepts (OPNAV N7), the Director of Strategy (OPNAV N3/5), and the Deputy Director of Strategy and Policy (OPNAV N3/5). Prior to those assignments, he served on the Secretary of the Navy’s immediate staff from June 2008 to May 2011 with responsibility for the coordination and implementation of Maritime Domain Awareness programs, policies, and related issues across the Defense Department.

Forward Defense, housed within the Scowcroft Center for Strategy and Security, generates ideas and connects stakeholders in the defense ecosystem to promote an enduring military advantage for the United States, its allies, and partners. Our work identifies the defense strategies, capabilities, and resources the United States needs to deter and, if necessary, prevail in future conflict.

Learn more

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The USMCA has certainly been successful in increasing the volume of Mexico’s trade with the United States and Canada. According to the US Census Bureau, in April 2023, the United States imported more goods from Mexico than from any other country; in 2022, Mexico-US trade was almost 27 percent higher than in 2019, and Mexico-Canada trade grew 21.8 percent in these same years. Between 2020 and 2023, Mexico received fifty billion dollars in US and ten billion dollars in Canadian investments.

This increase in trade and investment flows is explained not only by the USMCA’s implementation, but also by the Biden administration’s decision to diversify supply chains, relocate production to North America, and “de-risk” from China. By seeking to reduce the vulnerability of supply chains in North America, the integration facilitated by the USMCA acquired greater relevance for companies, workers, governments, and societies.

Even though the agreement has spurred dynamism in trade and investment, its implementation has not gone without serious challenges and confrontations, which Mexico will need to address before the 2026 joint review. These include differences in the way the three countries have chosen to comply with the USMCA, heightened scrutiny on labor and environmental issues, and incomplete implementation of the agreement’s provisions.

Unsettled disputes

First, Mexico has faced difficulties on both sides of the USMCA’s dispute settlement mechanism, established in Chapter 31. Mexico’s use of this mechanism signals that it considers the agreement an effective instrument to defend its commercial and investment interests. Together with Canada, Mexico requested the establishment of a panel to settle its differences with the United States regarding the interpretation of the methodology to determine the regional value content of essential auto parts in cars manufactured in North America. The panel ruled in favor of Mexico, but there seems to be no interest in enforcing the ruling.

Mexico has also been the target of Chapter 31. Both the United States and Canada requested consultations regarding Mexico’s energy policy in July 2022 and restrictions on trade in genetically modified corn in June 2023. While both consultation processes could still lead to requests for the establishment of panels, the parties have been in conversation regarding the substance of their concerns.

Chapter 31 is of great value to the private sector in North America because it offers a legal tool to solve differences. The USMCA offers a dispute settlement mechanism that works, unlike the World Trade Organization Dispute Settlement Body, which is paralyzed. The USMCA’s panel reports are binding, and panel decisions are not affected by domestic political pressures.

However, it is the three governments’ responsibility to comply with the panels’ decisions, even if they are unfavorable, and to make sure that rulings are fully enforced. Not doing so undermines the value of the USMCA dispute settlement mechanism and the agreement itself.

High standards, heightened scrutiny

Second, Mexico has been subject to scrutiny on labor and environmental matters, reflecting US and Canadian national priorities and their need to respond to political pressure from their own domestic constituencies. Regarding labor, under the Rapid Response Labor Mechanism, the United States has initiated eleven cases against Mexico, and Canada has initiated one. Mexico’s labor authority has sought to address the concerns raised in each case, avoiding sanctions and prohibitions on exports.

On environmental matters, Mexico has faced questioning from its partners regarding compliance with its environmental legislation and its USMCA obligations. For example, in February 2022, the United States requested consultations with Mexico on the protection of the vaquita porpoise, which is associated with totoaba illegal fishing. In May 2023, the US Fish and Wildlife Service determined that Mexico has not done enough to prevent the illegal trafficking of totoaba, so later this month, US President Joe Biden could decide to impose an embargo on the trade of wildlife products from Mexico, in line with Mexico’s Convention on International Trade in Endangered Species of Wild Fauna and Flora obligations, which are also recognized in the USMCA. In labor and environmental affairs, the United States and Canada have used and may continue to use the USMCA mechanisms to pressure Mexico to comply with its obligations, since these issues are key to their own domestic political agendas.

Unfinished business

Third, Mexico has yet to fully implement several USMCA provisions. These include the Asia-Pacific Economic Cooperation Cross-Border Privacy Rules Framework, established in Chapter 19, which is already overdue. In addition, Mexico will have to become a signatory to the 1991 agreement of the International Union for the Protection of New Varieties of Plants as provided in Chapter 20. Likewise, the USMCA has a built-in agenda of future negotiations, such as the inclusion at the sub-federal level of provisions on state-owned companies and designated monopolies (Chapter 22), which should have been concluded in June 2023. Mexico needs to make sure that these provisions are enforced according to its USMCA commitments, since this will align its regulations and policies with those of its North American partners.

At the halfway point between USMCA’s entry into force and its first joint review, Mexico has seen a substantial increase in its trade and investment flows, which are key engines for its economic growth. However, Mexico still faces serious challenges in the full implementation of its commitments and in making sure that the United States also complies with a panel report favorable to Mexico. It is in Mexico’s interest to fully comply with the agreement while also requesting compliance from the United States, since that will provide certainty and predictability to investors in the region. This will facilitate the agreement’s extension at the six-year review in 2026 and will allow Mexico to promote opportunities for North American productive integration and the relocation of supply chains.

Luz María de la Mora is a nonresident senior fellow with the Atlantic Council’s Adrienne Arsht Latin America Center, where she supports the Center’s Mexico work. From December 2018 to October 2022, she served as undersecretary of foreign trade in the Mexican Secretariat of Economy, during which she helped implement the USMCA.

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To accelerate US industrial decarbonization, policymakers should start with the lowest hanging fruit, such as electrification or cleaning hydrogen for existing use cases, and then expand to more difficult areas. Greening the electricity sector would sharply curtail emissions from electricity-intensive industries, while switching to clean hydrogen in refineries will likely accelerate hydrogen’s relevance for other promising but unproven use cases, such as in steelmaking. By targeting “easier” challenges, policymakers can achieve decarbonization gains as quickly as possible.

The most effective paths to accelerate industrial decarbonization will require permitting reform and pursuing a comprehensive understanding of clean energy deployment, including in transmission. While the United States has enhanced fiscal support for clean energy development, policymakers across the country at all levels of government should reduce permitting review times and ensure that projects are not stuck in regulatory limbo indefinitely. The United States should also research methods of decarbonization, including nuclear energy development, and wires-vs-pipeline transportation costs for green hydrogen. To limit the consequences of climate change, the United States must urgently advance a suite of efforts to guarantee the domestic and international industrial emissions reductions the world needs.

Staff

Joseph Webster

Senior Fellow

Global Energy Center

Central Asia China

The Global Energy Center develops and promotes pragmatic and nonpartisan policy solutions designed to advance global energy security, enhance economic opportunity, and accelerate pathways to net-zero emissions.

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What’s behind the EU’s push to regulate AI? What will the legislation require of companies who develop AI systems? With the trialogues underway, what are some of the key issues that will dominate interinstitutional negotiations? How did the introduction of ChatGPT change the way the European Parliament was looking at regulating AI? And what’s the relationship between regulation and innovation when it comes to AI technologies?  

On this episode of #AtlanticDebrief, Fran Burwell sits down with Brando Benifei MEP, co-rapporteur of the EU’s AI Act, to discuss what the EU hopes to achieve with its legislative proposal.  

You can watch #AtlanticDebrief on YouTube and as a podcast.

Fellow

Frances Burwell

Distinguished Fellow

Europe Center

Central Europe Digital Policy

Europe Center

Providing expertise and building communities to promote transatlantic leadership and a strong Europe in turbulent times.

The Europe Center promotes the transatlantic leadership and strategies required to ensure a strong Europe.

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On July 2, 2023 Nonresident Senior Fellow Dexter Tiff Roberts was quoted in a South China Morning Post article on a proposal by Chinese officials to update its Trademark Law in an attempt to improve intellectual property protection to better appeal to foreign investors amid its slowing economy.

Fellow

Dexter Tiff Roberts

Nonresident Senior Fellow

Global China Hub Indo-Pacific Security Initiative

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Watch the full event

Public Event Wed, June 28, 2023 • 3:00 pm ET

USAID Administrator Samantha Power on advancing LGBTQI+ inclusive development

AN #ACFRONTPAGE EVENT – A conversation on the United States’ efforts to advance global LGBTQI+ human rights and USAID’s commitment to global inclusion.

Human Rights Resilience & Society

The passage of Uganda’s law criminalizing LGTBQI+ identity is only one recent example of efforts to turn the global human-rights agenda “on its head,” said Samantha Power, administrator of the US Agency for International Development (USAID). And “it’s not just happening in Uganda,” she warned.

Power spoke at a Pride Month special edition of Atlantic Council Front Page on Wednesday, where she discussed USAID’s role in advancing LGBTQI+ inclusive development globally.

She addressed some of the agency’s most difficult challenges when it comes to achieving its inclusive development goals, including anti-LGBTQI+ discrimination—legal or otherwise—that prevents vulnerable communities from receiving needed services. “Even where there’s not a law,” Power said, discrimination is “a deterrent” that often stops people from accessing care and assistance.

Power also discussed USAID’s efforts to promote the development of a more inclusive postwar Ukraine. “Ukraine’s work to liberalize and build checks and balances and build in human-rights protections”—including for LGBTQI+ rights—“has accelerated,” she said.

She also argued for prioritizing LGBTQI+ human rights on the global stage. If the United States “[goes] quiet,” she said, “I think we would really shortchange what is distinguishing about American foreign policy.”

Power also previewed a new USAID policy promoting LGBTQI+ inclusive development, which she said would be the “first-of-its-kind.”

Below are more highlights from the discussion on USAID’s efforts to advance LGBTQI+ human rights and inclusive development, moderated by Washington Post and MSNBC journalist Jonathan Capehart.

Steps back—and leaps forward

• Uganda’s recently passed Anti-Homosexuality Act “would set back not only the health of LGBTQI+ communities,” but the health of all Ugandans, Power said. The Biden administration has publicly criticized the bill, joining leaders in thirty-one other countries in condemning the Ugandan law.
• Power explained that USAID works with local actors when determining how to best oppose discriminatory laws. “It’s the communities that are going to be affected by these laws that provide cues to us on how vocal to be” against anti-LGBTQI+ legislation, the USAID administrator said. Otherwise, the United States could risk becoming the center of attention and “potentially triggering nationalism and other forces.” Such a backlash, Power said, is “just what people who would seek to repress or terrorize vulnerable communities would like to see happen.”
• Despite challenges and setbacks in some countries, there are nevertheless signs that international LGBTQI+ human-rights norms are gaining ground, Power explained: Same-sex marriage legalization, as was recently accomplished in Estonia, as well as the decriminalization of same-sex relations in countries such as Barbados and Singapore indicate that “these principles are getting traction,” she said.

Inclusive reconstruction in Ukraine

• Power explained that Ukraine has made progress on LGBTQI+ rights since the start of Russia’s full-scale invasion; she said it is “remarkable that a country that’s fighting for its life and its people” has also managed to extend LGBTQI+ protections through legislative measures, regulations, and judicial vetting.
• Power argued that Ukraine’s mission to “[integrate] into Europe,” will encourage the Ukrainian legal and social ecosystems to increase their support for LGBTQI+ communities. “The criteria that Ukraine is going to need to meet, the roadmap and so forth, is going to entail much stronger protections than have existed in the past,” she said.
• The commitment to inclusive postwar reconstruction in Ukraine is in line with the Ukrainian peoples’ motivation for resisting Russian aggression, Power argued. “Part of what Ukraine is fighting for and part of what Russia is trying to squelch is liberalization, is [a] broad understanding of who human rights protections apply to,” she said.

The role of LGBTQI+ human rights in US foreign policy

• Prioritizing LGBTQI+ human rights is consistent with the United States’ economic development and foreign policy interests, Power said. “It is in our interest to fight repression,” she said. “It is in our foreign-policy interest to stand up for our values.”
• Power argued that the United States’ human-rights commitments obligate it to advocate LGBTQI+ rights in its foreign policy, leaving no room for neutrality on the issue, Power said. “Imagine the counterfactual,” she said. A US foreign policy that did not promote LGBTQI+ rights would “legitimate some of the [anti-LGBTQI+] rhetoric and actions and legal measures that are being put forward,” she said.
• Power pushed back on the criticism that promoting global LGBTQI+ human rights abroad interferes with other countries’ affairs. She said that the United States hears such complaints about interference often from Russia—even as it invades Ukraine—as well as from countries that sell surveillance technology and spread disinformation beyond their borders. “The noninterference claim is usually made in a selective way,” she said.

Daniel Hojnacki is an assistant editor of editorial at the Atlantic Council.

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In the past twelve months, Vice President Kamala Harris launched the US-Caribbean Partnership to Address the Climate Crisis 2030, welcomed leaders to Washington, and met in person with leaders in The Bahamas. This has helped build goodwill in the region. But US visits and diplomatic engagement have yet to yield many results. Simply put, if Blinken arrives in the Caribbean with little to announce, frustration is likely to brew. 

Blinken’s visit must start an action-oriented agenda for the region. He should focus on two key areas of cooperation. First, the United States should work with multilateral development banks (MDBs) to provide access to low-cost and low-interest financing to high- and middle-income Caribbean countries. Second, Washington should provide requisite tools to local private sector businesses so they can play a larger role in the region’s own development.  

For the United States, the consequences of insufficient action so far are evident. Given the enormity of the challenges facing the Caribbean, the region’s leaders are seeking solutions to their problems elsewhere. Barbadian Prime Minister Mia Mottley has taken to the global stage to overhaul MDB financing, Guyana is welcoming investment in its oil sector from all corners of the world, and Trinidad and Tobago is increasing engagement with Venezuela over shared gas reserves. Other Caribbean leaders see African countries, India, and China as attractive partners that can provide financing, investment, and aid. 

This does not mean that US presence in the region will evaporate. The Caribbean’s proximity to the United States, strong trade relations, and a large US-based diaspora ties the partners together. But US government officials must realize that the United States will no longer be the only actor with which Caribbean leaders will engage. Therefore, if the United States wants to remain relevant in the region, now is the moment to deliver real solutions to the challenges facing its Caribbean neighbors.

A plan to amplify financial instruments

The first step should be working with MDBs, such as the World Bank and the Inter-American Development Bank, to amplify new financial instruments to support access to concessional financing for Caribbean countries. Most Caribbean countries are classified as high- or middle-income, which means that they are not able to access low-cost and low-interest financing from MDBs to fund needed infrastructure or social programs in times of crisis. Part of this work is ongoing, with the World Bank recently announcing a debt pause on loan repayments for developing countries hit by natural disasters. 

However, the pause only applies to new loans, not existing ones. Given the specific vulnerabilities of Caribbean countries, which extend beyond just the effects of climate change–induced events, the United States should work with MDBs to create a specific carve-out for small island development states such as the CARICOM countries. Hurricanes and other natural disasters pose significant risks to the Caribbean. But due to the small size and openness of their economies, so do other external events, such as pandemics, the volatility of commodity prices, and disruptions in supply chains. These external risks should be accounted for as well, because if another COVID-19 pandemic occurred today, Caribbean countries would still be on the hook for loan repayments. 

Charging up the private sector

The United States should also work closer with local businesses to embolden the Caribbean private sector. Big infrastructure projects in the Caribbean, such as roads, bridges, and new buildings, are mostly led by governments. The private sector is often left out, as local banks provide only limited financing or loans with high interest rates. This creates a vast asymmetry between government and private sector resources, with governments scoring political points from new infrastructure projects, while the skills, expertise, and capital that bring these projects to fruition result in little benefit for local companies. Foreign companies, therefore, reap the benefits, with returns on projects benefitting external actors rather than populations in the Caribbean, including the business community. This creates a dependency on the state to provide jobs, resources, and skills to citizens, meaning that the distribution of these resources is tied to the government of the day. 

To address this, the United States should create a US-Caribbean Public Private Partnership program that incubates small businesses in the region. The objective should be to train small businesses and transfer skills and technologies to local companies so that they can scale to a level where they are competitive in bidding rounds for upcoming projects. This is all the more important in the construction and energy sectors, as new climate-resilient infrastructure and energy systems are needed in the Caribbean now and going forward. The benefits would be twofold. First, a stronger and more robust private sector should strengthen and stabilize the region’s financial sector, making Caribbean countries less susceptible to volatility in global markets. Second, the larger the private sector, the more jobs will be available to citizens. This should stimulate domestic growth and create more diverse job opportunities outside of public service and the tourism industry—two sectors highly vulnerable to climate change and growing debt-to-gross-domestic-product ratios. 

It is a consequential moment for the Caribbean—its challenges grow worse each day. To survive the next few decades, it needs the support of its partners, including the United States. High-level visits alone will not suffice. To capitalize on the goodwill the United States has built in the Caribbean, Blinken’s trip should mark the beginning of an active policy toward the region. Working with MDBs and supporting private sector growth would be a giant step forward.  

Wazim Mowla is the associate director of the Caribbean Initiative at the Atlantic Council’s Adrienne Arsht Latin America Center.

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Security

Military camps for Wagner reportedly under construction in Belarus

Tracking narratives

Pro-Kremlin sources spreading disinformation to justify missile strike in Kramatorsk

Kremlin blames Colombian victims for the injuries they sustained in the Kramatorsk attack

Media policy

Prigozhin’s online assets reportedly blocked in Russia

International Response

Questions abound over the future of Wagner contracts and Prigozhin-linked businesses in Africa

Analysis: With Wagner mutiny, Russia’s loses plausible deniability about its involvement in Africa

Investigation sheds light on how Putin’s childhood friends allegedly evade sanctions

Military camps for Wagner reportedly under construction in Belarus

Russian independent outlet Verstka reported on the construction of camps for Wagner forces near Asipovichi, Mogilev Oblast, located in Belarus approximately two hundred kilometers from the Ukraine border. According to Verstka’s local forestry source, the area will cover 2.4 hectares (5.9 acres) and accommodate eight thousand Wagner fighters. The source also claimed that there will be additional camps constructed. Family members of Wagner fighters also confirmed to Verstka that they were deploying to Belarus. 

Radio Svaboda, the Belarusian-language edition of Radio Liberty, reviewed satellite imagery from Planet Labs that suggested signs of expansion at the Unit 61732 military camp adjacent to the village of Tsel, twenty kilometers northwest of Asipovichi. The outlet interviewed Ukrainian military analyst Oleg Zhdanov, who suggested it was “too early to tell” as to whether the military camp’s expansion is specifically for Wagner forces. “Very little time has passed to start building a camp specifically for the Wagnerites—it’s unreal,” Zhdanov told Radio Svaboda.

On June 27, in his first speech after the Wagner mutiny, Russian President Vladimir Putin reaffirmed the deal that ended the rebellion on June 24 in which Yevgeniy Prigozhin would relocate to Belarus. Putin praised those Wagner fighters who did not participate in the revolt and said they could sign a contract with the Russian Ministry of Defense of other services. He added that other mercenaries who do not want to join could go either home or follow Prigozhin to Belarus.

—Eto Buziashvili, research associate, Tbilisi, Georgia

Pro-Kremlin sources spreading disinformation to justify missile strike in Kramatorsk

Pro-Kremlin sources denied Russia targeted civilians when a missile struck a crowded pizza restaurant in Kramatorsk, killing at least twelve civilians and injuring more than fifty others. According to this narrative, RIA Pizza was actually a military base hosting US and Ukrainian soldiers. To support the claims, pictures taken after the strike were published on Telegram and Twitter.

To support the claim that soldiers of 101st Airborne Division were located at the pizza “military base,” pro-Kremlin sources circulated grisly footage of the attack aftermath recorded by freelance journalist Arnaud De Decker. The clip shows a man wearing a morale patch of a US flag with the words “Always Be Ready: 5.11 Tactical.” 5.11 Tactical is a military apparel company that sells branded merchandise, including morale patches, worn to offer support to various causes and slogans but not used official unit patches. Various types of 5.11 Tactical’s “Always Be Ready” patches are readily available for purchase online.

Similarly, another post from Aleksandr Simonov’s Telegram channel that a man wearing an 101^st Airborne t-shirt was a member of the US Army division. These t-shirts are also readily available from online retailers.

—Sayyara Mammadova, research assistant, Warsaw, Poland

Kremlin blames Colombian victims for the injuries they sustained in the Kramatorsk attack

In addition to pro-Kremlin accusations that the Kramatorsk attack targeted a base housing US Army soldiers, Kremlin influencers also targeted citizens of Colombia, three of whom were injured in the attack, for being at the site of the incident. Colombian President Gustavo Petro said the attack targeted “three defenseless Colombian civilians” in violation of the protocols of war and called for the Colombian Foreign Ministry to submit a note of diplomatic protest to Russia. While the Kremlin acknowledged launching the attack, it insisted the assault struck military personnel rather than civilians.

The three Colombian citizens injured in the attack include acclaimed Colombian writer Hector Abad Faciolince; Sergio Jaramillo Caro, who previously led Colombia’s peace negotiations with FARC rebels; and Ukrainian-based journalist Catalina Gomez. According to the New York Times, Abad and Jaramillo were in Kramatorsk “collecting material” in support of their initiative, ¡Aguanta Ucrania! (“Hang On Ukraine!”), which seeks to garner support for Ukraine in Latin America.

Following the attack, Colombian influencers and officials criticized the attack through media outlets and social media accounts in Spanish. Danilo Rueda, Colombia’s current high commissioner for peace, issued a statement expressing support for the victims without mentioning Russia, while the Ministry of Foreign Affairs expressed its “strongest condemnation of the unacceptable attack by Russian forces on a civilian target.” 

Gomez, who was injured in the attack, broadcast a video for France 24 from the site of the explosion. Meanwhile, Abad and Jaramillo conducted interviews with Colombian media outlets such as El Tiempo in which they described the incident.

Actualidad RT, a Russian media outlets with enormous reach in the Spanish-speaking world, insisted that the victims of the attack were mercenaries and instructors of NATO and Ukraine rather than civilians. Actualidad RT quoted statements from Igor Konashenkov, spokesperson for the Russian Ministry of Defense,  and Kremlin spokesperson Dmitri Peskov, who said the attack struck “military targets” and that “Russia does not attack civilian infrastructure.” Actualidad RT promoted its claims via Twitter and Facebook multiple times on June 28.

Colombian radio station WRadio interviewed Kremlin foreign policy spokesperson Maria Zakharova on the morning of June 28. Zakharova stated that the restaurant was a Russian military target and called for an investigation into Victoria Amelina, a Ukrainian writer who was gravely injured while purportedly hosting the Colombians at the restaurant, claiming without evidence that Amelina had prior knowledge that the restaurant was a military target. Zakharova reiterated this statement after a WRadio journalist asked her to confirm the accusation. In contrast, Abad stated that it was Gomez who suggested they visit the restaurant, and that she apologized for doing so after the attack.

The Russian embassy in Colombia amplified Zakharova’s narrative later that same afternoon and evening. On Twitter, the embassy insisted that the city was “an operational and logistical-military hub, not a suitable place to enjoy Ukrainian cuisine dishes.” It also seemed to celebrate that the “reckless trip [of the Colombians] did not turn into an irreparable tragedy.”

—Daniel Suárez Pérez, research associate, Bogota, Colombia

Prigozhin’s online assets reportedly blocked in Russia

Over the course of the thirty-six-hour Wagner mutiny, the Kremlin attempted to limit information about Yevgeniy Prigozin on Russian social media and search engines, eventually blocking websites affiliated with Prigozhin. On June 24, the Telegram channel of Russian state-owned propaganda outlet RT reported that several Prigozhin-controlled media outlets including RIA FAN, People’s News, and Patriot Media Group were no longer accessible in parts of Russia. RT added that the reason for their disappearance was unknown. Similar reports appeared in Mediazona and several Telegram channels. 

The DFRLab used the Internet censorship measurement platform OONI to verify the claim and check the accessibility of RIA FAN within Russia. OONI detected signs that riafan.ru was blocked in the country. 

On June 29, independent Russian outlet The Bell claimed the Kremlin was searching for a new owner for Patriot Media Group, which includes media assets associated with Prigozhin. The following day, multiple Russian outlets reported that Prigozhin had dissolved Patriot Media Group.

—Eto Buziashvili, research associate, Tbilisi, Georgia

Questions abound over the future of Wagner contracts and Prigozhin-linked businesses in Africa

For years, Wagner has acted as Russia’s primary form of influence in Africa—spreading disinformation and propaganda, securing military contracts, and exporting natural resources to support Putin’s war effort. Following Prigozhin’s attempted mutiny, the future of Wagner’s operations on the continent has come into question. While it is highly unlikely the Kremlin would willingly abandon its influence in Africa, if Wagner is retired or its troops absorbed into the Ministry of Defense, it is uncertain who would maintain the group’s operations on the continent.

Russian Foreign Minister Sergei Lavrov confirmed that Russia’s work in Africa will continue. In a TV interview with Russia Today, Lavrov said, “In addition to relations with this PMC the governments of CAR and Mali have official contacts with our leadership. At their request, several hundred soldiers are working in CAR as instructors.”

A top advisor to Central African Republic President Faustin-Archange Touadéra appeared unconcerned about the weekend’s events. Speaking of Wagner’s military instructors, Fidèle Gouandjika said, “If Moscow decides to withdraw them and send us the Beethovens or the Mozarts rather than Wagners, we will have them.” In a statement released to its Telegram channel, the Officer’s Union for International Security—a US-sanctioned Wagner front company operating in CAR—claimed CAR’s defense minister had apologized for Gouandjika’s remarks. It quoted Defense Minister Claude Rameaux Bireau as saying, “The people of the CAR are grateful to the Russian instructors of Wagner, ask any Central African on the streets of Bangui or in the village of the CAR—he will confirm my words.”

In Mali, where Wagner forces have taken over responsibility for pushing back jihadists after the departure of French forces, the online outlet Mali Actu reported that the situation could dramatically impact Mali. “This situation raises major concerns about the security, stability and sovereignty of Mali, as well as the impact on the local population and counter-terrorism efforts,” it wrote.

—Tessa Knight, research associate, London, United Kingdom

Analysis: With Wagner mutiny, Russia loses plausible deniability about its involvement in Africa

While Wagner’s future in Africa remains uncertain, it is important to consider that the Wagner Group not just a paramilitary force. It is also a conglomerate of companies active in different sectors, from mining and logistics to political warfare and moviemaking, able to travel the spectrum between private entrepreneurism to state proxy. This flexibility has previously allowed Moscow to deploy Wagner to act as a force multiplier in Africa while simultaneously denying Russia’s direct presence on the continent. In Africa, Russia has used Wagner multiple times as part of a strategy to help authoritarian leaders stay in power and gain a pro-Russian military presence on the ground, all while maintaining plausible deniability. Until now, the positive outcomes of this strategy have far exceeded the costs for the Kremlin, as Russia has built a strong network of African influence with relatively little effort, securing concessions in strategic extractive industries, and expanding military-to-military relations on the continent.

However, this principle of plausible deniability, which made Wagner so successful and so useful for Moscow as an extension of its foreign policy and influence, is now damaged. As previously noted, Russian Foreign Minister Sergei Lavrov, as well as Putin, publicly confirmed direct links between Wagner and the Russian state apparatus.

Africa is intimately linked to Wagner: In the wake of Wagner’s involvement in Syria, Africa became the scene of the group’s expansion. Engaging in Sudan, the Central African Republic, Libya, Mozambique, Madagascar, and Mali, Wagner employed an opportunistic strategy of supplying security while taking concessions to mine natural resources. While its forces were in most cases invited to stabilize fragile states, its actions actively invited further instability, creating more opportunities and a greater demand signal for its services, ultimately granting renewing opportunities to Moscow to reinforce its footprint in the continent.

While denying direct links to Wagner’s actions in Africa might have become more difficult for the Kremlin, Russia is unlikely to waste the network of influence built by the group in recent years. Instead, Moscow will likely continue to deploy hybrid tools such as Wagner, although organized in different shapes and forms, so Russia can continue displacing Western influence, exploiting natural resources, and evading sanctions through dozens of front companies.

—Mattia Caniglia, associate director, Brussels, Belgium

Investigation sheds light on how Putin’s childhood friends allegedly evade sanctions

On June 20, the Organized Crime and Corruption reporting project (OCCRP) published a series of investigations titled “The Rotenberg Files” that shed light on the business dealings and alleged sanctions evasion attempts of Boris and Arkady Rotenberg, close friends of Russian President Vladimir Putin. The report is based on fifty thousand leaked emails and documents, examined by journalists from seventeen outlets. The OCCRP said the leak came from a source who worked for the brothers at a Russian management firm. The OCCRP investigation was conducted in partnership with the Times of London, Le Monde, and Forbes, among others.

Boris and Arkady Rotenberg are childhood friends of Putin. The billionaire brothers faced Western sanctions amid Russia’s 2014 annexation of Crimea, but their lavish lifestyles do not appear to have been impacted. 

According to the OCCRP, the leaked documents demonstrate how the Rotenberg brothers allegedly used Western lawyers, bankers, corporate service providers, and proxies to evade sanctions. 

One of the report’s findings also alleges the brothers maintain business links to Prince Michael of Kent, a cousin of the late Queen Elizabeth II who was previously accused by the Sunday Times and Channel 4 of profiting off close access to the Kremlin. According to the latest investigation, “Prince Michael distanced himself from earlier ties to the Putin regime in the wake of the 2022 invasion of Ukraine. But leaked emails and corporate records show he co-owns a company with two Russian businessmen who helped billionaire oligarch and Putin ally Boris Rotenberg dodge Western sanctions.” 

Another investigation from the Rotenberg files reported that Putin’s eldest daughter regularly visited a holiday property financed by Arkady Rotenberg in an exclusive Austrian skiing destination. Documents reviewed by the OCCRP suggest that the house was purchased by a Cypriot company in 2013 with a loan from a bank then owned by Arkady, using funds invested by another company he owned. Other records suggested that the former romantic partner of Putin’s daughter is connected to the company that owns the Austrian property. Residents claim to have seen Putin himself at the Kitzbühel residence, though this has not been confirmed. 

The Rotenberg brothers and Prince Michael declined to comment to the OCCRP investigative consortium.

—Ani Mejlumyan, research assistant, Yerevan, Armenia

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• Defining artificial intelligence
• How artificial intelligence works
• Machine learning
• Deep learning
• Global competition and controversies
• Dangers, myths, and misconceptions

Despite an abundance of books, articles, and news reports about artificial intelligence (AI) as an existential threat to life and livelihoods, the technology is not a grave menace to humanity in the near term. Undeniably, the comments of deep learning pioneer Geoffrey Hinton, who resigned from Google, are concerning. “I have suddenly switched my views on whether these things are going to be more intelligent than us. I think they’re very close to it now and they will be much more intelligent than us in the future. How do we survive that?” Hinton said in a recent interview. Hinton fears that AI may come to intentionally or inadvertently exert control over humanity, a hypothetical scenario known as an “AI takeover.” He is also worried about the potential spread of AI-generated misinformation or the possibility that an oppressive leader may attempt to use AI to create lethal autonomous weapons systems (LAWS). But AI programs have no agency to act on their own. Generative AI language models currently operate only within the controlled environments of computer systems and networks, and their capabilities are constrained by training datasets and human uses.

The generative transformer architecture that is powering the current wave of artificial intelligence may reshape many areas of daily life. OpenAI CEO Sam Altman has been making a global tour to engage with legislators, policymakers, and industry leaders about his company’s pathbreaking Generative Pre-trained Transformer (GPT) series of large language models (LLMs). While acknowledging that AI could inflict damage on the world economy, disrupt labor markets, and transform global affairs in unforeseen ways, he emphasizes that responsible use and regulatory transparency will allow the technology to make positive contributions to education, creativity and entrepreneurship, and workplace productivity.

At present, however, Altman’s generative AI is most useful in improving natural language processing and machine translation. Generative transformers are flexible and scalable models that outperform recurrent neural networks—which made voice-activated assistants on smartphones possible—in certain tasks, such as capturing relationships between different words within long documents and answering questions about them. Examples include GPT, BERT, T5, and LaMDA. They do not on their own possess independent capabilities associated with artificial general intelligence or superintelligence, and it is unlikely that a truly versatile human-like cognitive AI will become a reality before 2050. Even an ultrasmart AI program may never bootstrap itself into consciousness. And there is almost zero chance that—as in the Roko’s Basilisk thought experiment—a spiteful and malicious AI will emerge that rewards those humans who assist it and punishes any who dare attempt to stop it. As Sam Altman puts it “GPT4 is a tool not a creature.”

What is certain is that AI tools and methods will be crucial for confronting a slew of slow-motion catastrophes unfolding across the world. COVID-19 has claimed almost seven million lives worldwide, and based on excess mortality likely many more. Strife, stress, and conflict endangers democracies on both sides of the Atlantic. Unschooling and remote work movements mingle with cultural and political divisions and societal disruptions. Climate change brings extremes in heat, drought, and wildfires along with melting ice caps and sea level rise. 

Machine learning (ML) is able to tackle these issues head-on. Admittedly, it has a long way to go before it’s a feasible tool for pandemic control, but AI is attaining good performance in the diagnosis, evaluation, and prognosis of infected individuals; predictions of pandemic spread; and COVID-19 drug discovery as well as vaccine development. Responsible applications of AI are strengthening communities and empowering democracies. Over the past few years, this technology played a particularly powerful role in knitting humanity together virtually amidst the spread of disease, snarled traffic, scarce fuel, and the high cost of living. AI-enabled technologies are also monitoring the world’s climate, agriculture, and economies, as well as providing solutions to feed and clothe the world without further damaging the environment. They can facilitate many paths to sustainable planet-wide development. Green AI technologies representative of the convergence of social innovation and technological change include ecobots, biodiversity and ecosystem services, and renewable energy solutions. 

Nonetheless, humanity is living in uncertain, complex, and ambiguous times. But as Sun Tzu explained in The Art of War, in the midst of chaos, there is also opportunity. It is not surprising that the current generation has invented AI and social media-fueled empathy scorecards intended to replace or supplement credit scores, prescription video games and other “calmtainments,” and AI-assisted chatbot therapists (Woebot and Wysa). AI is being brought to bear against the labor squeeze and workers’ demands for higher wages, supply chain disruptions and volatilities in manufacturing, and the omnipresent threats of wars of occupation. 

Defining artificial intelligence

The ultimate goal of AI is to emulate human-like thinking or perform tasks that normally require human activity. John McCarthy, Marvin Minsky, Nathaniel Rochester, and Claude Shannon, in their original proposal to bring together mathematicians, cyberneticists, and information processing innovators for a formative 1956 summer research workshop on AI at Dartmouth College, contended that “every aspect of learning or any other feature of intelligence can be so precisely described that a machine can be made to simulate it.” AI can be subdivided in several different ways, but the major branches are usually described as artificial narrow intelligence (ANI), artificial general intelligence (AGI), and artificial superintelligence (ASI). 

ANI is the branch where the overwhelming majority of AI-inclined developers work. ANI thereby represents the state of the art in AI. It is a category that includes all useful applications of AI to specific problems such as calculating risks and reducing errors, handling repetitive or boring tasks, making informed recommendations or decisions quickly, or automating job duties that are difficult or dangerous. ANI developers are rarely concerned about whether their AI systems are capable of true cognition, awareness, metacognition, or affectivity. Instead, they are content to regard them as models for understanding intelligent behavior and building useful tools. Common areas of activity in ANI are speech recognition, natural language processing, chatbots, search engines, recommender systems, digital assistants, computer vision, image recognition, and machine translation. Every sort of machine intelligence encountered in daily life is limited to specific tasks and knowledge domains that are not readily translated into other tasks or domains irrespective of how sophisticated they are.

On the other hand, AGI and ASI have as their shared goal the achievement of a complete or comprehensive range of human intelligence capabilities, including perhaps even consciousness. In AGI and ASI, the model is the mind; the map is the territory. Should the goal be reached, some researchers believe ASI will surpass human intelligence, with cognitive capacities well beyond those of the smartest people and in a wide variety of domains. An ASI’s “mind” would not just be different in degree from the human one; it would be different in kind. Indeed, some researchers assume that any potential candidate for ASI would require a self-modifying property. Many people, including, most famously, Bill Gates, Stephen Hawking, and Elon Musk, have spoken out about AGI/ASI safety and control. Stuart Russell and Peter Norvig, authors of the leading textbook on AI, note that “[a]lmost any technology has the potential to cause harm in the wrong hands, but with AI and robotics, we have the new problem that the wrong hands might belong to the technology itself.” Others have been more sanguine. Neuroscientist Anthony Zador and computer scientist Yann LeCun, for example, suggest that there is no reason why a machine would develop a self-preservation instinct or evolve into a dangerous competitor. 

How artificial intelligence works

The typical AI developer writes code—sometimes employing the assistance of context-aware intelligent code-completion software like IntelliSense or Copilot. At the core of all AI systems written today are intelligent agents. The classical approach to AI is in the form of sense-think-act: agents perceive their environment using sensors, consider choices and make decisions, and react using effectors. They may be physical (robots) or virtual (software) and are often both. Agents now have all sorts of different abilities, goals, preferences, knowledge representations, and memories of past experiences. Humans themselves are considered very complex intelligent agents by AI developers, albeit biological ones. This is why it is sometimes said that the “holy grail” of AI is to understand man as a machine.

Agents are ubiquitous in everyday life. Siri, Cortana, and the Google Assistant are agents, as are tabletop smart home appliances like Amazon Echo, Google Home, Samsung Bixby, Xiaomi Xiao Ai, and Apple HomePod. Agents are also embedded in many autonomous and semiautonomous robotic devices like the Roomba vacuum cleaner, Tesla driver-assistance system, and General Atomics Gray Eagle Extended Range unmanned aerial military drone. Large, pretrained language models are the foundation of the latest—potentially disruptive and transformative—conversational agents like Google Bard, Jasper Chat, OpenAI’s ChatGPT, and Microsoft’s Bing chatbot.

Practitioners of symbolic AI, a dominant early approach to simulating humanlike cognition, compared the brain to a sophisticated computer program. From the mid-1950s and continuing into the 1980s, computer scientists created general and specific problem solver programs. Software developers also created general inference engines upon which specialized rule bases could be applied interchangeably. These so-called expert systems consisted of heuristics or rules of thumb developed from direct interviews with experts and professionals (e.g., physicians, lawyers, mechanics, and chemists). Heuristic programming assumed as a given that an expert is a specialist. 

Expert knowledge, however, is rarely fixed. Indeed, it is regularly updated through new discoveries and experience. Heuristic systems struggle to keep up with all but the most predictable definitions and structured reasoning methods. AI researchers describe this as the “knowledge acquisition bottleneck.” Training an AI program to serve as a clinical decision support system, for example, is only feasible if there is a reasonably efficient way to keep up with an exponentially growing reservoir of medical knowledge and know-how. Often, the domain expert and the programmer find it difficult to maintain their systems and keep them current.

Knowledge engineers argue among themselves about whether the right approach is to carefully simulate the reasoning abilities of experts in models of human information processes or rather to discover entirely new methods for weighing evidence that can only be accomplished using computers. Ironically, as expert system prototypes proliferated, they became more specialized, limited in scope, and fragmentary. The history of expert systems has proven that machines, like humans, perform better in specialized domains. Exceptional general-purpose thinking is rare among machines, and perhaps also among human beings.

Expert systems gave way to directly mining the data of extremely large numbers of cases. Data mining requires figuring out how to represent knowledge and extract useful patterns through automatic or semiautomatic analyses so that they might be used effectively. Data mining techniques include cluster analysis, anomaly detection, and association rule mining. This movement away from the primacy of experts has been likened to the demise of the Greek Oracle of Delphi.

By the 1990s, connectionist approaches featuring artificial neural networks (ANNs) eclipsed symbolic AI in popularity. The metaphor for the connectionist approach to AI is the brain as a collection of billions of neurons that both wire and fire together. The application of neural networks to AI also dates to the 1950s but had fallen out of favor until resuscitated by Hinton, the cognitive psychologist who recently left Google, and others who described a new procedure called “backpropagation” for training multilayered neural networks. The connectionist approach became even more exciting as advances in computing hardware and schemes for handling large volumes of structured, semi-structured, and unstructured data (“big data”) made it possible to improve the efficacy of neural networks.

Machine learning

ML today is a subset of AI which relies on both the symbolic and neural network approaches. The synthesis of neuro-symbolic AI and development of hybrid architectures is relatively new. Computer scientists use ML and data analytics to train algorithms and neural networks with statistical methods to discern patterns, make classifications, predict outcomes, and uncover significant insights from available masses of information. In ML, models of learning are used to dexterously organize the capabilities of intelligent agents as they improve themselves using data extracted from online systems or the environment. ML is divided into roughly three categories—supervised, unsupervised, and reinforcement learning.

In supervised learning, labeled data are used to train algorithms. The computer is “taught” to recognize general rules using “training data” (labeled inputs and desired outputs). Supervised learning algorithms may engage in active learning to label new data points with desired outputs, classification to organize data into relevant categories, regression analysis to investigate relationships between independent features or variables and dependent variables or outcomes, or similarity learning, where the goal is to measure the resemblance or relatedness between things. 

In unsupervised learning, the algorithm discovers structure, features, and insights from unlabeled data. Unsupervised learning is helpful where common properties of the dataset are unknown or poorly understood. Additionally, unsupervised learning is helpful in solving clustering and association-type problems. Clustering algorithms group data based on similarities and differences. Marketing companies often use clustering and demographic segmentation of customers to identify and group households that are similar to one another in wealth, buying behavior, or lifestyle. These clusters are given names like Married Sophisticates, Penny Pinchers, Skyboxes and Suburbs, Summit Estates, Shotguns and Pickup Trucks, Rolling Stones, Single City Struggles, Aging Upscale, and Timeless Elders. Association algorithms find interesting relationships between variables. Association rule learning can be useful in market-based analyses of customer purchases, allowing retailers to recognize relationships between items that customers frequently buy together and predict the likelihood of purchases of an item based on the occurrence of other items in an individual transaction.

A computer performs reinforcement learning when it learns through interaction with the environment and feedback to achieve a predefined goal or maximize a reward. In reinforcement learning, the AI improves by first making mistakes. Reinforcement learning has applications in teaching self-driving cars to avoid obstacles and stay on the road, training AI non-player characters in video games, and instructing caregiver robots on how to grasp common household objects.

Deep learning

Deep learning is a type of ML that depends primarily on ANNs and training data. The neural networks train by imitating the natural neural interconnectivity of the brain using layers of nodes and connections. These nodes are composed of various inputs and weights, a given threshold, and an output value. When the output value surpasses the predefined threshold, it “fires” like a biological neuron, activating the node and passing data along to the next layer of the network. AlexNet, one of the pioneering technologies in the field of computer vision, was designed by Hinton and his students. This deep learning tool used to analyze visual imagery is composed of eight layers—five convolutional layers, two hidden layers, and one output layer. AlexNet was trained on graphics processing units (GPUs). It outperformed all other challengers in the 2012 ImageNet Large Scale Visual Recognition Challenge. Deep neural networks and platforms are employed in many contexts today; they promote cybersecurity (Deep Instinct), predict criminal recidivism (COMPAS Core), make early diagnoses in oncology (Behold.ai), teach next-gen driverless cars (Tesla, Waymo, Nvidia), and boost the creativity of artists (DALL-E, Stable Diffusion) and writers (GPT-4, Charisma). Generative transformer models are a prime example of deep learning, and they are revolutionary in their ability to quickly find relationships and capture context across large datasets.

Computational creativity is one subfield of AI that has been dramatically reshaped by deep learning. Computational creativity applications attempt to generate original ideas and artifacts. These “generative AI” applications are transforming our understanding of machines as helpmates to humans and altering bedrock conceptions of novelty. Is the goal to replicate human storytelling or to create new media for storytelling? Can an AI agent create a real emotional connection with a person? Can a machine have an original thought or imagination? How would an AI program recognize that something is imaginary? In a world of computational creativity, some common tropes and normative modes of seeing, hearing, and knowing may have to be unlearned. 

All sorts of possibilities are being explored with generative AI. The annual National Novel Generation Month (NaNoGenMo) contest is the brainchild of computer programmer and internet artist Darius Kazemi. NaNoGenMo is the artificial spiritual twin of the National Novel Writing Month (NaNoWriMo), a nonprofit organization that encourages human authors to find their voices by banging out drafts of fifty-thousand-word novels in November. Programmers following Kazemi’s rules instead write code that generates fifty thousand words of machine-made fiction. NaNoGenMo provides a standard corpus of public domain lists and texts for rapid prototyping, but participants use all sorts of public domain writings to train their AIs. In the NaNoGenMo submission The Seeker, the intelligent agent is at once algorithm, agent, protagonist, and narrator. The Seeker reads differently each time because the code randomly shuffles in a new selection from its corpus to parse, deconstruct, and reconstruct. 

Today, humans and artificial intelligences have joined forces to tell prize-worthy stories like The Day a Computer Writes a Novel, which passed the first round of screening for the Hoshi Shinichi Literary Award in Japan, and 1 the Road published by Jean Boîte Éditions. The author of 1 the Road, Ross Goodwin, was a speechwriter in the Obama administration. Goodwin trained a Long Short-Term Memory Recurrent Neural Network (LSTM-RNN) with three different sets of texts (science fiction, poetry, and “bleak” writings) totaling sixty million words. 1 the Road is particularly interesting because the AI’s input is supplemented using sensors—a video camera, microphone, GPS device, and clock timer—exposed to the sights and sounds of a road trip from New York to New Orleans. Typically, large language models are trained on massive amounts of textual data and can be tens of gigabytes—even petabytes—in size. Researchers are concerned about running low on this kind of data to train models, which means that accessing data from other sources such as audio dialogue, images, spreadsheets and databases, and video clips will become increasingly important.

In this networked world exposure to content is constant. Generative AI promises to exponentially increase the amount created annually. Generative AI applications today are spiritedly responding to an apparent “creativity crisis” among human beings as measured by a thirty-year decline in scores on the Torrance Tests of Creative Thinking, a prominent test for human creativity. Generative AI has manufactured all sorts of objects, discoveries, and/or performances. However, some examples of computer-aided creativity are quite old. One precedent is Alan Turing’s imitation game. Another is the general problem solver of AI pioneers Herbert Simon, Allen Newell, and John Clifford Shaw. 

In 1958, Simon and Newell wrote that “within ten years a digital computer will write music that will be accepted by critics as possessing considerable aesthetic value.” This prediction has now been fulfilled by the subfield of generative music and algorithmic composition. One of the most famous examples is David Cope’s Experiments in Musical Intelligence (“Emmy”). Emmy is an algorithmic composer capable of analyzing existing musical compositions, rearranging and recombining them, and ultimately inventing new works that are indistinguishable from those of Johann Sebastian Bach, Frédéric Chopin, and Wolfgang Amadeus Mozart. Shimon at Georgia Tech University is a marimba-playing improvisational jazz-bot musician. DeepMusic.AI, OpenAI’s MuseNet, and the Magenta Music Transformer are all online tools for creating music with deep learning and generative AI. Recently, two programmers have been trying to make music infringement lawsuits obsolete by securing copyright to every combination of eight quarter notes in the C major scale using tones generated with the Musical Instrument Digital Interface (MIDI) standard electronic music protocol. And, similar to NaNoGenMo, a song contest has sprung up that is exclusively for artificially generated music. The first AI “Eurovision Song Contest” winner, the Australian group Uncanny Valley, sampled kookaburra bird calls and koala grunting noises. Additionally, there are AI painters, Dungeons & Dragons dungeon masters, journalists, filmmakers, dancers, stunt performers, and theater players. 

Global competition and controversies

A number of countries have established national strategies, initiatives, and funding mechanisms to promote AI innovation and adoption. Former US President Donald J. Trump established the American AI Initiative by signing an executive order in 2019. The order did not allocate any direct federal funding, but it highlighted the significance of employing AI in a responsible manner and taking action to respond to significant investments made by other nations. In 2020, the US Congress passed the National AI Initiative Act. The National AI Initiative (NAII) establishes a coordinated program that spans the federal government. It is aimed at expediting AI research and development (R&D) to strengthen the country’s economic growth and national security. The act provides almost $6.5 billion in funding over five years for R&D, education, and standards related to AI. The National Science Foundation, the Department of Energy, the Department of Commerce, the National Aeronautics and Space Administration, and the Department of Defense will jointly oversee a nationwide network of interdisciplinary AI research institutes.

The US government’s efforts are partially motivated by China’s substantial investments in AI technology. The New Generation Artificial Intelligence Development Plan, announced in 2017, is the Chinese government’s national strategy for AI R&D. China hopes to overtake the United States by 2030 and establish the country as a global leader in the production of AI technology and talent. The major port city of Tianjin in northern China has declared its intention to establish reserves totaling ¥100 billion (equivalent to $15.7 billion) to bolster the AI industry, as well as a separate ¥10 billion fund to advance intelligent manufacturing. China passed a national law aimed at addressing ethical and regulatory concerns related to AI in 2021. In April 2023, the Cyberspace Administration of China issued regulations mandating that content generated by AI must align with the fundamental principles of socialism.

The Russian Federation also has a National AI Development Strategy designed to bolster investment in AI research, education, and industrial development. Somewhat surprisingly, the 2019 Russian AI strategic decree does not mention national defense, though it does emphasize the importance of AI for economic development and healthcare. The decree also does not mention budget, deadlines, or enforcement mechanisms. Due to the recent military conflicts in Libya, Syria, Nagorno-Karabakh, and Ukraine, it is anticipated that Russia will allocate significant resources toward developing AI systems for unmanned aerial drones, counter-drone technologies, and AI-powered surveillance systems. 

Significant and unheralded projects are also underway in Africa. The African Union has unveiled an Artificial Intelligence Continental Strategy for Africa, which is intended to facilitate the participation of stakeholders, initiate capacity-building efforts, and fortify regulatory frameworks for AI technology and data management. Artificial Intelligence for Development in Africa (AI4D) is a four-year initiative launched in 2020 by Canada’s International Development Research Centre and Sweden’s International Development Cooperation Agency. The objective of AI4D is to team up with Africa’s government and scientific communities to encourage AI research, innovation, and talent. The ultimate aim is to elevate the standard of living for people in Africa and beyond. African nations are particularly concerned with issues of machine bias and ethics and wary of patterns of manipulation and abuse in the form of automated imperialism, algorithmic colonialism, and digital extractivism. 

Canada, Australia, Japan, South Korea, Germany, France, and the United Kingdom also have significant national strategies to address challenges posed by a future empowered by AI. Many of these nations are worried about the likelihood of global competition in AI leading to an arms race or authoritarianism fueled by information technologies. Entrepreneurs, politicians, and engineers warn of an impending “AI Cold War.” An AI arms race to create near-autonomous weapons systems is in full swing, despite being a topic of controversy. The banning of these so-called killer robots may not even be practical. Governments around the world have developed a number of other controversial applications of AI, such as image recognition and mass surveillance, predictive policing, deepfakes and misinformation campaigns, and social credit scoring.

Dangers, myths, and misconceptions

AI can be destructive even when used as an instrument for creative discovery. One of the dangers of unleashing computational creativity tools is being submerged by a culture of automation that dampens individual creative expression and dialogue with human audiences, participants, and partners. In 2022, an AI-generated artwork took first place in a fine arts competition at the Colorado State Fair, which outraged many. Only months later, an internationally acclaimed photography competition—the Sony World Photography Awards—was won by an image generated using AI. Getty Images and established art communities are refusing to accept AI-generated masterpieces. But in general, AI is valuable because it empowers humanity with tools that extend bodies and minds and mitigates risks and perilous circumstances.

Deep learning pioneer and serial entrepreneur Andrew Ng has said that worrying about AI is like worrying about overpopulation on Mars. Artificial agents will not need to be excused or incarcerated for crimes and misdemeanors that upon analysis and reflection can be traced to human error, indifference, or greed. Whole brain emulation, artificial consciousness, technological singularity, and AI apocalypse are all well over the horizon. The threats that remain are still significant. The chief near-term dangers of AI technology are pervasive and more subtle. They include risks such as over-optimization, weaponization, deception and distraction, complexification, moral and practical deskilling, amplification of competition and conflict, job losses due to automation, and harms to human uniqueness, privacy, and accountability.

What lies behind the hype and fear of AI is a fundamental misunderstanding of current objectives, as well as severe shortsightedness. Most AI is meant to supplement human intelligence, not replace it. AI is intelligence augmentation until—and only if—humanity commits and finds ways to entirely remove human beings from the loop as creators, controllers, and decisionmakers. “Exiting the loop” will prove difficult: Humans are extraordinarily skilled at handling ambiguous situations, such as intuiting the emotional state of other drivers on the road. AI will not become human-like merely because humans anthropomorphize it either. An AI program does not try to learn (although it can improve through reinforcement learning methods); it plucks statistical patterns and distributions from training data using pipelines, algorithms, and parameters unglamorously selected behind the scenes by programmers. ANNs are not reasoning the way brains do, and adversarial ML involves no clashing of titans. Thinking about the past, present, and future of AI is imperative. When IBM said that the Jeopardy!-winning Watson AI would also revolutionize medicine, it in effect denied a century of hard-won gains in health informatics R&D (and has yet to achieve its lofty promises). It is not possible to simply wave our hands and say that quantum computing, DNA data storage, and neuromorphic chips will pave the way for an AI-infused next industrial revolution. Real progress in AI comes much more slowly, albeit with occasional surprising leaps forward, and ultimately depends on the real wants and needs of human beings.

Philip L. Frana is an associate professor in the Interdisciplinary Liberal Studies and Independent Scholars programs at James Madison University. His scholarly interests focus on the social and cultural aspects of robotics, automation, and information technology.

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The Group of Seven (G7) has lobbed the latest of three notable salvos in signaling that governments around the globe are focused on regulating Generative Artificial Intelligence (AI). The G7 ministers have established the Hiroshima AI Process, an inclusive effort for governments to collaborate on AI governance, IP rights (including copyright), transparency, mis/disinformation, and responsible […]

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The new NIE lays out three pathways through 2030 for how North Korean leader Kim Jong Un’s strategy could evolve as his nuclear weapons capabilities improve. The NIE concludes that the by far most likely pathway is for Kim to leverage his nuclear capability for “coercion, potentially including non-nuclear lethal attacks, aimed at advancing the North’s goals.” It also delineates two additional low-likelihood pathways: North Korea could employ an offensive strategy to dominate the Korean Peninsula through the use of force, or it could turn to a defensive strategy, in which nuclear weapons are used solely as a deterrent. According to the estimate, Kim is most likely to continue pursuing coercion because he will be “confident that his growing nuclear capabilities will deter any unacceptable retaliation or consequences” but that he would not actually attack with them unless he “believes his regime is in peril.”

As a former National Intelligence Officer for North Korea who led the development of NIEs, I see this document as monumental in my particular niche, but some additional context is needed to understand why. Since the 1950s, NIEs have been the US intelligence community’s most authoritative written judgments on national security issues, developed through a collaborative process led by the Office of the Director of National Intelligence’s National Intelligence Council (NIC) and its predecessor organizations. This new NIE is a tantalizing glimpse of the US intelligence community’s larger strategic intelligence picture on North Korea, even as it necessarily represents only the tip of the iceberg of a much longer classified document.

What is perhaps most remarkable about the latest NIE is that it highlights very recent key intelligence community judgments about North Korea. This is a major and unusual step, given that this practice was largely halted after the declassification of key judgments in the 2007 NIE on Iran’s nuclear program caused a number of public controversies. It also marks a change from how the intelligence community has generally approached public assessments of North Korea. Though US intelligence leaders have openly described North Korea as a “hard target,” they have generally been guarded in their assessments of Pyongyang’s capabilities and how they know what they know. With a few exceptions (many of them during the “fire and fury” period of 2017) most of the intelligence community’s publicly released assessments have been small portions of the larger Annual Threat Assessment provided to Congress. 

Given this history, and the fact that the NIE does not address the possibility that North Korea will give up its nuclear weapons, it could have been withheld on the unfair grounds that it could be interpreted as an implicit rebuttal to the longstanding US policy of negotiating the denuclearization of North Korea. It is therefore a testament to the sincerity of Director of National Intelligence Avril Haines’s commitment to transparency that this NIE was released. 

Even with its notable and welcome transparency, however, it does not give a full picture of the strategic North Korea nuclear challenge. There are (at least) three areas that are worth adding to the discussion.

First, China. The NIE’s analysis related to Beijing is guarded and subtle, particularly compared to how much intelligence leaders openly focus on the threat. While Washington publicly and loudly grapples with the premise that the United States and the People’s Republic of China (PRC) will likely be in a heightened state of military confrontation or outright war over Taiwan before 2030, these key judgments do not explicitly address the possibility, much less explore the massive implications this has for Korea. The declassified NIE does warn, among other factors, that an offensive strategy would “become more likely” if Kim believed he could “maintain China’s support” or “if [Kim] concluded that [an] international crisis presented a last chance to accomplish revisionist goals.” As current National Intelligence Officer Sydney Seiler acknowledged to me last week, the need to consider North Korea’s potential to escalate during a Taiwan crisis is a “no brainer.” That the key judgments omit this subject is neither surprising nor troubling to me as a former NIO. I know how hard it is to keep this document’s scope manageable and the challenges of considering hypotheticals piled upon hypotheticals. However, readers should keep in mind that the risk of North Korea using its nuclear weapons, or taking the offensive in general, could be much greater in the event of a US-PRC conflict.

Second, South Korea. Specifically, it is important to recognize Seoul’s potential to field its own nuclear arms. If Kim pursues a strategy of coercion, as the NIE judges he most likely will, and “may be willing to take greater conventional military risks, believing that nuclear weapons will deter an unacceptably strong US or South Korean response,” the value of South Korean nuclear capability to counter such threats would fuel the already-strong South Korean public sentiment for the country to acquire nuclear weapons. It would, however, be impolitic to warn that April’s Washington Declaration, wherein South Korean President Yoon Suk Yeol pledged to forgo nuclear weapons, may not last beyond the end of his constitutional single term in 2027. The window between a decision for nuclear weapons and operational capability would be a logical time for a preventive attack, a concrete example of the general “now or never crisis” the NIE cites as a driver for an offensive.  

Third, military and policy prescriptions. These are outside the remit of the NIC and violate intelligence analysis tradecraft standards, so it makes sense that they are not included in the NIE. However, several logical strategic-level policy and military recommendations could be derived from this estimate’s judgments. At least three come to mind immediately:

• First, the United States should not politically recognize North Korea as a de facto or de jure legitimately nuclear-armed state in the hope that this would lead it to be a defensively focused “responsible” power, given how unlikely this is to happen. 
• Second, the United States and South Korea should ensure that their primary efforts in deterrence of North Korea are focused on the most likely threat. US and allied efforts at deterrence should not be content with just deterring an “all-out” military offensive or nuclear strikes. They should also counter as much as possible the sort of incremental creeping coercive escalation that could either fatally undermine the security of South Korea and the US position in the region over time or could spin out of control into an escalating conflict. 
• Third, the United States and South Korea should recognize that, though it is not the most likely scenario, they must be prepared to fight a nuclear war with North Korea. Washington and Seoul must contend with the unpleasant reality that there is a plausible set of conditions, particularly in the context of a hypothetical US-PRC war or a South Korean decision for nuclear arms, that could lead North Korea to undertake an offensive use of nuclear weapons. 

Though this NIE is neither the first nor the last word on the implications of North Korea’s growing nuclear capabilities, it is a huge step forward for public and classified policy debates. The NIE provides the intellectual foundation to prepare for a long struggle with an increasingly well-armed and coercive North Korea, instead of abandoning the principle of denuclearizing North Korea in a vain attempt to secure peace or embarking on the reckless path of embracing preventive war in fear that Kim will strike first. The NIE demarcates the field in which the United States and its allies must be prepared to play a high-stakes game—a contest in which the PRC’s aggression and South Korea’s own nuclear weapons could have game-changing consequences.

Markus Garlauskas served as the national intelligence officer for North Korea, leading the US intelligence community’s strategic analysis of North Korea from 2014 to 2020. He is the director of the Indo-Pacific Security Initiative at the Scowcroft Center for Strategy and Security of the Atlantic Council, and tweets at @Mister_G_2.

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Two major issues are constraining US offshore wind deployment: challenges in securing permits and cost inflation. Regulatory uncertainty and a slow approval process are slowing the United States’ deployment of offshore wind. Project developers stress that there are not enough regulatory personnel to quickly approve projects. Meanwhile, projects are also constrained by rising installation costs which are largely macroeconomic in nature. The sector is not immune to broader inflationary forces and rising interest rates, while trade policy and steel tariffs are also raising costs. Still, there are also industry-specific cost pressures, including limited port and vessel infrastructure and skilled labor shortages.

These are, to some extent, growing pains for a rapidly developing industry. How fast the US offshore wind market matures will depend in part on whether the country quickly learns from others who have more developed offshore wind sectors.  

A complex regulatory web

Over the past few years, the Biden administration has taken renewed leadership in the energy transition, rolling out measures intended to advance offshore wind in the United States. In March 2021, the administration set a target to deploy 30 gigawatts (GW) of offshore wind by 2030, and the Inflation Reduction Act (IRA) incudes federal tax credits that support the deployment of offshore wind in the country.

Yet, these newfound commitments do little to address the bottlenecks that result from the environmental permitting process in the United States. Nor do they provide clarity on the federal regulatory process.

Since 2009, the US Bureau of Ocean Energy Management (BOEM) has been responsible for lease sales and the coordination of permitting activity for US offshore wind projects. However, the US Bureau of Safety and Environmental Enforcement (BSEE) remains responsible for offshore wind safety and environmental enforcement and compliance, while other agencies have environmental authority over permitting processes related to protected species and other filings under the National Environmental Policy Act (NEPA). This lack of federal coordination can result in delays issuing Environmental Impact Statements—federal documents that assess the impact that a project might have on the surrounding environment—preventing the deployment of these projects.

Similarly, connecting offshore wind power to the onshore electricity grid remains a work in progress in the United States, and will require significant infrastructure development. The environmental impact of expanding transmission infrastructure is largely unknown and will be subject to its own regulatory process.

Learning from Europe

Europe, in contrast, is a mature offshore market, boasting approximately 255GW of installed wind capacity. Europe is also developing a meshed grid, which will comprise clusters of offshore wind farms that are connected to multiple energy grids across the continent to allow for a more coordinated deployment of offshore wind power infrastructure. This success has been made possible by a clearly defined permitting process.

Germany, for instance, has a one-stop permitting approach, where a single government authority coordinates the entire process. This government agency, the BSH, handles all approval methods, including strategic environmental assessments. Germany also has a fixed permitting timeline, which requires specific permitting requirements to be completed on a predetermined schedule, providing additional clarity. These standardized procedures allow for a more streamlined permitting process.

The United Kingdom, Europe’s offshore wind leader, is moving toward an overall strategic—rather than site-specific—approach. This would allow offshore wind developers to offset their environmental impacts on a larger scale, granting developers access to larger infrastructure projects that can encourage large-scale renewable energy usage while avoiding detailed environmental assessments on a site-specific basis. This change aims to cut down the offshore permitting process from four years to one.

The US BOEM has recognized the need for more clarity and efficiency in the US regulatory processes and has taken steps to mitigate existing permitting bottlenecks. BOEM has proposed a Notice of Intent checklist for Environmental Impact Statements, a document that details the review process for any proposed offshore wind development project. This checklist would act as a resource to keep the process on track and avoid delays in NEPA reviews. This is a good start; although challenges remain, the United States has recognized the current obstacles impeding offshore wind deployment and is taking steps to mitigate them.

Cost inflation and deployment

Offshore wind has some unique advantages when compared to other renewables. It is the only variable baseload power generation technology, meaning it has a high utilization rate nearly on par with gas-fired combined cycle power plants. Offshore wind also enjoys relatively low hourly variability, especially when compared to solar photovoltaic systems.

Yet, offshore wind has still suffered from some of the problems plaguing other renewables—and the broader economy. Offshore wind costs have risen due to rising interest rates, higher labor expenses, and increased prices for steel, copper, and other relevant materials. Steel accounts for approximately 90 percent of the materials used for an offshore wind farm, and iron and steel prices remain well above pre-pandemic levels, although they have declined from record highs.

The offshore wind sector is also hurting from specific challenges. Steel prices in the United States are still subject to uncertainty stemming from Russia’s invasion of Ukraine removing supply from world markets, including Ukrainian manufacturing facilities. Moreover, Trump-era steel tariffs have not been fully lifted, and there is a chance that some of the tariffs that have been removed could return later in the year if the legislation’s October deadline to strike a US-EU deal is not met. Increased tariffs would hit offshore wind projects hard, dealing a further blow to the industry. 

Limited port and vessel infrastructure also continues to constrain projects, while some segments of the supply chain, such as wind turbine installation vessels and skilled labo, could become part of a tug-of-war between US and European projects. Already, several offshore wind projects along the US East Coast are seeking to renegotiate contracts because of these headwinds. Renegotiation attempts have faced legal challenges from state regulators, including in Massachusetts.

On the positive side, procurement contracts, which are critical for offshore wind development, have provided credible and durable long-term demand signals, enhancing certainty for suppliers. The IRA has also incentivized manufacturers to invest in steel, blade, tower, and nacelle capacity, while regional transmission planning has been funded through the bill.

The way forward  

To address the bottlenecks in issuing permits, the United States should learn from German and British offshore wind strategies by housing permitting authorities within a single agency and staffing regulatory bodies appropriately to enable large-scale, strategic approval processes. While these reforms may not be possible to implement at the national level, US states should consider adopting them to enable rapid deployment of offshore wind capacity.

Cost inflation remains a problem for US offshore wind. Steel prices remain elevated, there are a limited number of available service vessels, and transmission challenges will loom larger as projects move closer to deployment. However, in addition to the IRA, procurement contracts from states have helped incentivize project development. Ultimately, US offshore wind will require strong federal and state support if the ambitious targets to generate 30GW by 2030 are to be met.

Joseph Webster is a senior fellow at the Atlantic Council Global Energy Center. Elina Carpen is a program assistant at the Atlantic Council Global Energy Center. This article reflects their own personal opinions.

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In the June 2023 Issue of Longitude, Forward Defense Nonresident Senior Fellow Marco Tantardini published an article on the state of the space industry work force. He noted that the average age of many employees of aerospace companies is rising closer to retirement and that there is competition from other sectors for qualified engineers.

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Defense Journal by Atlantic Council IN TURKEY (DJ): You spent a lot of time working with the Turkish military at the tactical, operational, strategic, and political-military levels. What stands out as the key to success when working with this unique ally?

Gen. (ret.) Wesley K. Clark: Clarity of mission. Clarity of requirements. Clarity of the rules. This was actually the critical element in relationships with the Turkish military and at the higher levels. Don’t be slippery, don’t be vague, don’t leave the details undiscussed. Think it through. Lay it out. It’s a very engineering-centric approach. Not, let’s say, a soft science approach to military affairs. I think it was a very effective approach, and we were effective when we understood and worked in the same spirit.

DJ: A bit reminiscent of the Prussian approach to planning, perhaps? No nonsense?

Clark: It’s no nonsense, and it’s no backsliding on a commitment once given. So, we always understood that, you know. When you are working with Turkey, if you get the agreement they will follow through. You must also follow through. You will not be given the opportunity to back away from commitments, and this is the key with Turkey. Know what you’re doing, what you’re ultimately going after. Lay it out clearly, work it out in detail, and when you shake hands on it, it’s as good as gold.

DJ: Is it easier to work with the Turks on a multilateral and alliance basis than bilaterally?

Clark: The Turkish approach is consistent—this is the way the Turks are. Work is consistent both in an alliance and bilaterally. But the differences have been in the circumstances, the environment, the exogenous issues. Turkey has always been very sensitive about its internal security, going back to the creation really of modern Turkey. Some of the key concerns and issues go back to the founding by Mustafa Kemal Atatürk.  Concern over the Aegean is one. We were trying to resolve cross tell [military information exchange between organizations at the same operational level] when I was a young major, then again when I came back eighteen years later.

We were working with different generations of equipment and personnel, but it was the same set of issues more or less. Turkish leadership has always been proud, nationalistic, cognizant of their heritage, and also the unique geography and position of their country.

DJ: Washington as a policy community in the post-Cold War period shifted from operating within formal alliance structures to more ad hoc or issue-based coalitions. Alliances can be cumbersome and bureaucratically challenging, but there is a payoff in terms of trust and institutional commitment. Turkey is a prime case of an ally that becomes more difficult the further afield we get from formal understandings. Has Washington lost the muscle memory, or the patience, for such alliances?

Clark: I think the Biden administration is getting very high marks for consultation. But, unfortunately, there’s a legacy that they picked up from the previous administration.

And, as you know, NATO was prepared to invoke Article 5 in support of the United States after 9/11, and the United States chose to primarily to work through a coalition of the willing rather than through NATO. We didn’t want to mess with this messy political stuff.

The policy decision was taken to work more unilaterally under the Bush administration. This was driven by [then US Defense] Secretary [Donald H.] Rumsfeld, rather than [then US] Secretary [of State Colin L.] Powell. [Rumsfeld] was a dominant leader who didn’t want to worry too much about the diplomatic niceties that were required. He wanted people who would follow easily rather than having to work out an agreement. That was his operating style, and I think that style is what drove serious problems in our relationship with Turkey, such as our inability to bring the 4^th Infantry Division through Turkey in 2003. It was astonishing—astonishingly ineptly managed by the United States and this has had consequences that have lasted for a long time.

DJ: This goes back perhaps to the issue of stating the end-state commitments up front. Ankara was pretty clear on their concerns over economic losses and destabilization in northern Iraq.  This was portrayed in the US press as haggling or “bargaining at the souk,” but perhaps it had more to do with the engineering mentality you referred to earlier, and their prior experiences with regional instability.

Clark: This was a real problem we faced with the end of the Cold War, the problem of regional instability. Of course, we were focused on the Balkans, and in the Balkans, Turkey did a wonderful job with us. But at the same time, we were dealing with the legacy of the Gulf War and the problem of Operation Provide Comfort, where we depended greatly on the Turks and operated out of the base at İncirlik.  Yet we were pursuing policies which promoted an independent Kurdistan, which was a threat to Turkey. So, you have to give the Turks credit for being able to handle an ambiguous and ambivalent situation. They were, at the time, happy to have the United States’ support, and we had overlapping interests. They certainly wanted to protect the Muslim community in the Balkans, as we did. I think they did more than they were ever given credit for officially in this, but at the same time they were very patient in putting up with the United States’ need to hem in Saddam [Hussein in Iraq].

During my time as NATO commander, we flew repetitive missions out of Turkey under Operation Northern Watch. We overflew Iraq, and in 1998 we began responding to radar lock-on with kinetic fire. Turkey was very accommodating with that. If you look at the balance of the relationship, they’ve been long-term excellent partners for the United States.

DJ: Turkey has developed impressive defense industrial relationships, operational reach, and power projection capabilities beyond its own border areas. It’s engaged in Africa, Central and South Asia, the Caucasus, and the Gulf as well as the Balkans. Is this a threat or an opportunity for the West?

Clark: I think it’s a great opportunity. It’s based on something fundamental that’s changed in Turkey, which is the development of Turkey’s home-grown engineering and higher education.

In the 1950s, when we first had our relationship with Turkey through NATO, and we were brought together as allies in Korea, Turkey was a much different place. It always had a cadre of good engineers and tools, but it was more isolated.

Turkish engineering today is working throughout the world. They were very effective in supporting us in Afghanistan. They’re working in the Middle East. They’re working in Africa. It’s a tremendous opportunity for the West to work with Turkish engineering in general, not just the military.

DJ: Lastly, what’s your fondest memory of the Turks or Turkey?

Clark: Great restaurants in Istanbul and having three kinds of lamb in the same meal, looking up and out at the beautiful architecture.  I love looking at the city whenever I fly to or through Istanbul, and watching all the ships going through the Bosporus. You get a sense of the wonderful civilization, the dynamism, the economic development. The place is a testament to Turkish entrepreneurship and character, and I feel so blessed to have seen some of this in my lifetime.

General (Retired) Wesley K. Clark is a former NATO Supreme Allied Commander Europe (SACEUR) who now serves as Chairman and CEO of Wesley K. Clark and Associates. He is a board director at the Atlantic Council and a member of the Defense Journal’s honorary advisory board.

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Defense Journal by Atlantic Council IN TURKEY (DJ): You worked with the Turkish military a fair amount, interacting at both operational and political-military levels. What lessons did you learn about the Turks, the bilateral relationship, what works and what doesn’t work within it?

Gen. (ret.) Philip M. Breedlove: My career was bookended in a way by Turkey. Early in my career, I found myself at İncirlik [Air Base] a lot. During that time, I made a lot of very close associations and acquaintances. I got to know a lot of the Turkish leadership down there personally. I found them to be good, faithful, understanding partners.

When I came back as the three-star numbered Air Force commander [Third Air Force], İncirlik was home to one of my wings. I would conduct regular visits, and when our talks focused on the mission at hand in İncirlik, we had willing, wonderful partners. Yet we were starting to run into some of the difficulties associated with not being able to operate out of Turkey during Operation Iraqi Freedom. Then, of course, I was chosen to be SACEUR [Supreme Allied Commander Europe]. We were starting to see the front end of Washington’s friction with [Turkish] President [Recep Tayyip] Erdoğan, though I still found on the personal level that my interaction with Turkish peers was very good. Turkey had undergone a change of political philosophy in a few years, more clearly challenging the principle of Western alignment.

I found that as I related to the ambassadors and civilian officials, they were less warm than the officers perhaps, but they were very professional. Turkish statesmen are very professional; inside of that word is a lot of things [smiling]. They were insistent…really good at presenting their side of the story, and [had] an amazing sense of historical recall. They were adept at leading off conversations with historical precedents and anecdotes. They were professional and, yes, difficult.

DJ: What did you find to be the key challenges in dealing with allies within NATO, especially Turkey?

Breedlove: The first thing for [the United States] to remember in dealing with an ally, in this case Turkey, is that in an alliance it is a peer-peer relationship. We need Turkey geopolitically; the physics, the geography, the place that Turkey finds itself—we need them onside. We need them just like they need us; this is not a lopsided relationship. Their control of the Dardanelles and of access to the Black Sea—these are very important things, and even though we have drawn down our forces a bit at İncirlik, it remains an incredibly important airfield for anything you need to do in the Middle East. So, we have to start from that—geography and a peer relationship.

What causes the complications in working from that basis? Well you’ve got politics on both sides. In Turkey, you’ve got the politics of Erdoğan, very different from what preceded it. In the United States, all too often we take what should be bipartisan geopolitical and geostrategic issues and subject them to the priorities of domestic politics. We allow petty politics to dominate the geostrategic narrative. Recently, we’ve seen a bipartisan body formed in Congress to watch and attend to China policy and issues, to build effort across the aisle for something that works. Perhaps we need something like that for Turkey.

DJ: Domestic concerns in both countries impact the framing and conduct of bilateral relations. This is perhaps natural, but creates challenges for “relationship managers”—diplomats, military, bureaucrats, and others. Given your experience as one of the managers, how did you account for the role of domestic factors in foreign policy decisions?

Breedlove: In Turkey, before the [2016] coup attempt, the military had a different relationship with the government than after. The military was respected, but not only protected the people from external enemies, but from internal disorder as well. The attempted coup represented a major dislocation in civil-military relations, and prompted a redefinition and restructuring. Things have changed, and the United States needs to understand that—it won’t go back to a situation where the Turkish military drives the bilateral relationship. [We] also need to understand that some, but not all, problems go away if there is political change. We’ve had our own presidents who prompted allies to say, “If it weren’t for that guy, things would be great.” All governments have their challenging times, and we are certainly going through one of those now.

DJ: Turkey has developed important power projection capabilities in recent years and has demonstrated those in Libya, Syria, the Caucasus, and is engaged in Central and South Asia, the Balkans, Africa. This is a relatively new phenomenon. Do Turkey’s Western allies view this as a threat or an opportunity?

Breedlove: The question is one of coherent strategic action with allies. If growth of capabilities is accompanied by NATO solidarity and consultation with allies, the allies cheer. Whereas if capability growth is perceived as being driven by narrow or parochial interests, even partisan interests, many see it as destabilizing or nefarious. Taking the long view, Turkey was an ally before and will be an ally after the current period of tension within the Alliance, and we want Turkey to play that role as a capable and formidable partner. We’ll have to navigate through the present period, but again, allies of the United States have occasionally had to navigate difficult periods with our political leaders, too.

DJ: In an era of great-power competition, what are the keys to better alignment and cooperation between the United States and Turkey? Where are the opportunities?

Breedlove: This is a tough one. I suppose I understand portions of what Turkey is doing: they want to sell kit [military gear], they want to exercise influence abroad. Yet it still interests me that Ankara takes the stance it does with Russia. When you look north from Turkey and see what Russia is doing—immoral, inhumane, illegal military action in Ukraine—one would think that there would be a different approach to Russia. It would be easy to say just embrace our values and morals, but that card doesn’t play so well. The geostrategic security piece, looking at Russia’s destabilizing actions in the Black Sea and elsewhere on Turkey’s periphery, that’s where we have opportunity and work to do.

DJ: Several years ago, an argument was made in the State Department that Turkey had options with Russia, and if Washington insisted on pursuing regional policies in Turkey’s near neighborhood that contradicted Turkish interests, especially regarding the PKK [the anti-Turkish Kurdistan Workers’ Party] and YPG [PKK-affiliated People’s Defense Units], we would see Turkish cooperation with Russia. Not out of perfidy, but out of “naked practicality.” There were few takers for that argument at the time because there were few people that believed Turkey had the leverage and agility to do so.

Breedlove: I believed it. I was fairly vocal during that period of time. [US Defense Secretary] Lloyd Austin and I were peers at the time, commanders of the two combatant commands. I still count him as a friend; we agreed on about 90 percent of our views on strategy, but YPG was not one of those things. I argued more than once that we were aligning with a group for an immediate purpose that would ultimately cause us major problems over decades and generations with Turkey. This is another one of those occasions when I think politicians played an unhealthy role in deciding how to move forward, because it was all about how to win a war, and not win the peace afterwards.

DJ: Defense was traditionally the heart of US-Turkey bilateral relations: defense industry, military cooperation, regional cooperation. These have attenuated in recent years, and other sources of traction—bilateral trade, tourism, people-to-people contact—have not taken their place, lagging Europe, Russia, and other partners.

Breedlove: Yes, in military terms the contact has decreased. This is also a problem in the United States in terms of how the military relates to other Americans: fewer people serve, the military becomes sort of a family business for some and mysterious for others. A smaller military and less overseas basing have affected relations with Turkey.

Lack of people-to-people contact is one of the biggest problems we have. In my generation we had very close contact with our peers in the Turkish military, we maintained those relationships, and we were able to keep in touch and deepen mutual awareness and understanding over time. The reduced contact is not producing the same types of contacts and friendships at present—the informal relationships. The granular contact that we used to have at the middle rank and senior rank levels, joint exercises and training especially, we’ve lost it. That would be a place to start rebuilding.

The second place is the politicization of defense industrial products. The F35, the F16, and other defense sales all went south too quickly and without due concern for long-term effects. On the Turkish side, they messaged us hard that they wanted Patriots, but we couldn’t find our way to mutually acceptable terms until they had already concluded negotiations with Russia on the S-400, which set off an unfortunate chain of events. If the US side had shown a little more flexibility on meeting Turkish terms—similar to what was offered in the end but after decisions were made—and realizing that every deal is a new negotiation…if we had approached that differently, we might be in a very different place. Turkish industries are amazing and were going to be a big part of building F35s for countries all around the world.

Lack of close personal contacts, decreasing cooperation, and deficits of trust are all mutually reinforcing.

General (Retired) Philip M. Breedlove is a former NATO Supreme Allied Commander Europe (SACEUR). He is a board director at the Atlantic Council.

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A rift opens up

The war in Syria has grown into a major wedge between the United States and Turkey. Many Turks believe that Washington wants to erect a PKK-aligned state in Syria, and many in Washington believe Turkey has been insufficiently focused on eradicating Sunni extremism. Yet it was not always so; once upon a time there was a sense of shared purpose. National leaders from both countries demanded Assad’s ouster at the outset of the war. Turkish President Recep Tayyip Erdoğan pledged Turkish support should the United States impose a no-fly zone and saw general overlap on Syria with then US president Barack Obama.

Obama came to view the war as more about the IS than Assad, his support to the Syrian opposition evaporated and the war became overwhelmingly a matter of counterterrorism policy. The United States and Turkey each demurred from new military commitments while urging the other to take the lead. Between the fall of Mosul to the IS in 2014 and the fall of Aleppo to Assad in 2016, the United States exited the war against Assad and refocused on the war against the IS; this removed the common, if tenuous, shared political logic.

Unwilling to commit large US forces to Syria and disappointed in hopes that Turkey might, Obama in 2014 struck a bargain of “naked practicality” to support the PKK-aligned YPG. While the move was billed as “temporary, transactional, tactical,” its open-ended nature constituted a “ticking time bomb” by disregarding Turkish concerns over empowering PKK networks. Over time, some in Washington came to think that a rebranded YPG might be able to create an autonomous Kurdish region on the cheap, analogous to the Kurdish region in Iraq and useful as a long-term platform for US forces. The YPG seemed to offer what had eluded Washington for a generation: effective counterterrorism without the need for state building or a political theory of success.

A multiaxial proxy game

It became clear after 2014 that the YPG’s ambitions extended beyond the defense of Kurdish-majority areas right up to security and political control over northern Syria and a key role in shaping the political future of Syria. This comported with the broader PKK project of carving self-ruled regions out in Syria, Turkey, and elsewhere under a common ideological banner. Because the US “by-with-through” operational approach abjured strategic control over the YPG while arming and equipping it, the United States became a de facto sponsor of that project.     

The Euphrates River became a proverbial Rubicon in 2016 when YPG forces crossed it and remained in control of Arab-majority areas, despite US assurances of withdrawal. This proved to be a watershed moment for Ankara, as the Turks adopted an increasingly militarized approach to strengthening the anti-Assad opposition and rolling back YPG gains. A series of Turkish military operations in Syria eviscerated the YPG’s ambitions for autonomy, leaving them much-reduced territory and growing dependence on Damascus. Yet they retained a singular strategic asset—massive US military aid and a free hand in local and regional politics.

Northern Syria has become a region of intricate balances and overlapping conflicts. The Turkish-supported Syrian National Army (SNA) and the US-supported Syrian Democratic Forces (SDF, the core of which is the YPG) skirmish and spar uneasily while Ankara contemplates further action against the YPG.  The SDF works with Assad’s forces in some places, claiming official status under Assad, while the United States provides its salaries and logistical support. Turkish and Russian forces conduct joint patrols in sensitive areas. Iran-backed militias target US bases in the east, while YPG and Iran-backed militias confront the SNA in northern Aleppo.

Meanwhile, SDF forces appear increasingly enmeshed in the struggle for control of the neighboring Kurdistan Region of Iraq (KRI). The YPG’s parent organization, the PKK, has come into open conflict with the Kurdistan Democratic Party (KDP), which the United States and Turkey support, while parlaying the weakening of the Patriotic Union of Kurdistan (PUK) into greater control of Iraq’s border with Iran. Meanwhile, highly trained elite counter-terror units (YAT) from the SDF have been operating in PUK-controlled Iraqi territory using PUK helicopters, likely with the knowledge of US forces. Even as Iran instrumentalizes the PKK to undermine the KDP, the PKK appears to be instrumentalizing the SDF to support its drive to supplant the KDP.  The US war against the IS has morphed into something else—a multiaxial proxy game with no clear end game and multiplying side effects—and the biggest beneficiary may be Iran, in Syria as well as Iraq.

A narrowing path

Turkish commitment to prevent a PKK-aligned entity from ruling northern Syria or northern Iraq has been amply demonstrated. Washington, too, seems committed to keeping troops in Syria, less for a clear political goal than to prevent any other power from filling in when they leave. The modus vivendi of simply staying in Syria but out of one another’s way satisfies no one (not even the YPG). Are there ways to find convergence between the respective national policies, other than one or both parties exiting Syria and leaving it to Assad and the Iranians?

One theoretical path would be the YPG and its political wing, the Democratic Union Party (PYD), renouncing the broader PKK movement and its armed campaigns against Turkey. This could result in the movement being seen as authentically Syrian, and cooperating with the Syrian opposition in negotiations to end the war. Yet YPG fighters consider themselves inextricably linked to the PKK and its ideology, rendering distinctions more cosmetic than substantive. Further, the US interest in sustained use of the YPG as a counter-IS force requires continued arming and training that by definition poses a threat to Damascus, Ankara, and other Syrians, making reconciliation unlikely. The PKK uses the YPG as connective tissue to the Assad regime, and PKK-appointed commissars or “kadros” in Syria ensure that key decisions taken by the YPG or PYD comply with the political line set by the PKK’s senior leaders. The United States lacks the means, or the will, to reform the PKK control mechanism to placate Ankara or promote power sharing with other Syrians.

Former US Syrian envoy James Jeffrey argued that a reasonable compromise for Ankara and Washington lies in physical separation between Turkish-backed groups and the SDF, with consistent efforts to address specific Turkish sensitivities. Yet how long can the United States keep nine hundred troops on Syrian soil while they are subject to increasing attacks from Iranian proxies and there is no discernible end state? Other observers have argued that the time has come to negotiate with Moscow and Damascus a US withdrawal that returns nominal control to Assad but maintains SDF control in fact. It is hard to conceive of a more blatant repudiation of US values than to reward, and trust, Assad as guarantor of what follows.

The path forward

One obstacle to the United States simply declaring victory and leaving is al-Hol and prison camps like it. These camps hold tens of thousands of IS members, supporters, and relatives, and the SDF guards them; US withdrawal would likely lead to their release. In a sense, the United States is prisoner to the prisoners; with fewer IS targets in SDF-controlled areas, preventing a new wave of IS attacks by keeping IS members in prison has become a key measure of “enduring defeat.” The assumption of this contingent form of stability that outside actors—Turkey, Iran, Russia, or Damascus—will refrain in perpetuity from disrupting it appears tenuous.

US forces will depart Syria in the coming years, and the YPG and its political wing lack the resources and legitimacy to maintain control of majority-Arab northeast Syria on their own. A reasonable political strategy for the United States must recognize that protecting US geopolitical and humanitarian interests, as well as effective counterterrorism, in the long run rest more on cooperation with Ankara and Erbil than on propping up the YPG. A soft landing of sorts for those that fought the IS with the United States should be part of the strategy but can only be achieved if Ankara and Erbil receive assurances that the massive US military subsidies and political license granted the movement will be removed, forcing it into compromises with them, rather than with the United States’ enemies in Tehran and Damascus.

In short, the United States might signal an off-ramp from the YPG to Ankara and Erbil while incentivizing authentically Syrian components of the YPG and PYD to seek peace and political cooperation with the Syrian opposition—and with the KDP. Ironically, the best protection for US interests in Syria may rest in building down the power of its current proxy in a deliberate and transparent manner and negotiating a new relationship between it and our other friends in the region. This is no mean task but offers much-needed clarity to all sides. The alternatives of propping up an unsustainable status quo or matchmaking between the YPG and Assad, whatever their other results, will perpetuate the deep Syria rift in US-Turkish relations.

Rich Outzen is a geopolitical consultant and nonresident senior fellow at the Atlantic Council IN TURKEY with thirty-two years of government service both in uniform and as a civilian. Follow him on Twitter @RichOutzen.

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As I reflect on these questions, I am reminded of the late 1940s and early 1950s, a time when Turkish-US relations were at their peak. During this period, close to fifteen thousand Turkish Armed Forces personnel participated in the Korean War, demonstrating Turkey’s commitment to its alliance with the United States. The sacrifices were significant: 721 Turkish soldiers were killed and 2,147 wounded in the war. In February 1952, a little over a year before an armistice brought an end to the war, Turkey became a member of NATO. Many refer to Turkey’s participation in the Korean War as the “cost” of joining the Alliance.

In addition to the deepening political and economic relations between Turkey and the United States during that era, the two countries were also engaged in robust military cooperation, particularly in aviation. Admittedly, there were times when the political environment was fraught with tension. Some prominent examples include the 1962 Cuban Missile Crisis, crises involving Cyprus in 1964 and 1974, the 1975-78 US arms embargo on Turkey, and the 2003 US-led invasion of Iraq, which caused a strain in the friendly atmosphere, even interrupting it. Nevertheless, through prudent diplomacy, mindful of ever-changing realities and alliance interests, sagacious minds prevailed. Relations were eventually restored, and strategic-level contacts were established in both civilian and military spheres.

Ties between Turkey and the United States, already strained over the 2016 coup attempt and US criticism on ties between Turkey and Russia, fell further in 2019 over the war in Syria and Turkey’s purchase of a Russian missile system.

Impact of the war in Syria

Turkey has borne some of the burden of the consequences of the war in Syria since its start in 2011. According to the United Nations, Turkey hosts some 3.6 million registered Syrian refugees. The large number of refugees has not only shifted the demographics in the border region, it has also added a crippling economic burden. Turkey has also faced cross-border terrorist attacks by Kurdish terrorist groups.

As a consequence of US policy miscalculations, northern Syria has become even more unstable with the presence of terrorist groups such as the Islamic State and the Syrian Kurdish Democratic Union Party (PYD) and its military wing, the People’s Protection Units (YPG), an offshoot of the Kurdistan Workers’ Party (PKK), which the United States and the European Union (EU) consider to be a foreign terrorist organization.

Despite requests from Turkey, neither the United States nor the EU consider the PYD and YPG to be terrorist organizations. The United States first started providing support to the YPG and PYD in 2014 to assist them in their fight against the Islamic State in Syria. While the threat posed by the Islamic State in the region has effectively disappeared, the United States maintains its support to the PYD and YPG, which have been key partners of the US-led Global Coalition to Defeat ISIS. The PYD and YPG also serve as the backbone of the coalition-created Syrian Democratic Forces (SDF). Despite Turkey providing Interpol and other senior US officials detailed allegations of terrorist acts by the PYD and YPG, aid to the terrorist organizations has not ceased, rather it has increased.

This support has caused significant harm to bilateral relations between the United States and Turkey. Early 2023 visits by the US Chairman of the Joint Chiefs of Staff and US Central Command (CENTCOM) commander to the region, although described as troop visits, have also contributed to rising tensions between the two countries. Ankara views these activities as part of an attempt by the United States to establish a satellite Kurdish statelet in eastern Syria, similar to what was tried in northern Iraq.

Missile defense

In 2013, NATO responded to Turkey’s request for ballistic missile defense by temporarily deploying systems such as the Patriot and SAMP-T from five allied countries to the region on a rotational basis with command and control located in Allied Air Command at Ramstein Air Base in Germany.

However, following Turkey’s 2018-19 operation against the YPG and PYD in northern Syria to safeguard its own security, the systems provided by the allied countries, with the exception of the Patriot system from Spain, were withdrawn. Despite ongoing discussions during bilateral meetings between the Turkish Ministry of National Defense and the Chief of General Staff at NATO headquarters, the allied countries that had previously deployed their systems declined to redeploy them citing various reasons.

In 2018, Turkey launched an effort to manufacture its own long-range regional air defense system called Siper. The war in Syria added a sense of urgency to this mission and a thorough review of alternatives, including the Patriot Advanced Capability-3 (PAC-3) system, was conducted at the request of the Air Force Command. The United States declined to meet the terms of a Turkish request for the Patriots. A 2018 attempt by Turkey to buy the SAMP-T from a Franco-Italian consortium also ground to a halt due to French objections. Turkey eventually opted to procure the S-400 system from Russia despite US opposition to the deal.

The procurement of the Russian S-400 system, coupled with US support to the YPG and PYD in Syria, proved to be the breaking point in the already strained US-Turkey relations.

As the Turkish military representative to NATO in Brussels at that time, I personally experienced not only the reactions of my US counterparts but also the questions and concerns raised by other representatives about the procurement of the S-400 system. Naturally, each country viewed the issue from their own perspective, which was closely tied to their respective policies and interests. However, recurring concerns centered on the compatibility of the Russian S-400 system with NATO’s integrated air defense system and the difficulty of safeguarding the intellectual property and sensitive information pertaining to the F-35 aircraft. Furthermore, there were frequent inquiries about why Turkey chose to procure such a system from Russia, a country that ranked as the top threat in NATO assessments since 2014.

Turkey faces a backlash

Following the S-400 purchase, the US Department of Defense removed Turkey from the F-35 program in 2019. And in 2020, the United States imposed sanctions on Turkey’s Presidency of Defense Industries (SSB) pursuant to Section 231 of the Countering America’s Adversaries Through Sanctions Act (CAATSA).

Turkey had been a joint producer of the F-35 program, having signed a memorandum of understanding with the US government on January 26, 2007. Turkey had also paid for and completed the first package of pilot and ground personnel training. The justification for its removal was based on the claim that the use of the S-400 in the same environment as the F-35 could potentially lead to the theft of high-tech aircraft system information.

As a result of Turkey’s removal from the F-35 program, six F-35A aircraft that were produced for Turkey were confiscated and stored in hangars, and the personnel in training were sent back home. Negotiations are still ongoing regarding the repayment of the $1.25 billion that Turkey had previously paid for the program.

Turkey’s removal from the F-35 program led to a need to review the force structure of the Turkish Air Force, as relations between the Turkey and the United States became strained. It was decided to extend the lifespan of the F-4 aircraft that were originally planned to be phased out. Additionally, Turkey decided to acquire forty F-16V aircraft from the United States to meet its urgent air combat needs. The procurement by Turkey of seventy-nine modernization kits to boost the capabilities of its existing F-16 aircraft was also discussed.

A turning point?

Based on recent statements and evaluations made by Turkey and the United States, there appears to be a relatively positive atmosphere in administration circles. US President Joe Biden, who has not been very receptive to improving bilateral relations, has been supportive of Turkey’s request to procure aircraft and modernization kits. This support was especially visible in face-to-face meetings at the level of heads of state, such as the 2019 NATO summit and the Group of Twenty meeting in Rome in 2021. Yet, some members of the US Congress are dragging their feet regarding the implementation of these procurements.

It must be noted that even if the deal is approved today, delivery would take between three to five years in the best-case scenario. Nevertheless, reaching common ground can still be considered significant progress.

Rethinking the fate of the S-400 system, which was delivered in 2019, is of critical importance to resolving issues between Turkey and the United States. Regarding the S-400 systems that were stored in depots following some tests, I believe that a solution can be found involving either the frameworks proposed since then or by simply keeping the systems in storage.

A recent statement by Haluk Görgün, CEO of the Turkish defense firm Aselsan Elektronik Sanayi, is noteworthy. Görgün said that “with the development of UMBHSS-SIPER, we no longer need the S-300/S-400s.” Until the Siper system fully matures, though, SAMP-T might be a medium-term solution as well.

Removal of this obstacle may encourage members of Congress who are against Turkey to reconsider their positions on the supply of F-16Vs and modernization kits. With the establishment of such a positive climate, it is possible that Turkey could revive interest in its return to the F-35 program.

If Turkey can procure forty F-16V aircraft and modernization kits in sufficient numbers, it can easily embrace the motto “Leader in Its Region, Effective in Its Continent” that was popular in the early 2000s. A possible future return to the F-35 program might also lead to the reutilization of production capabilities that the Turkish defense industry lost after Turkey was removed from the program, the establishment of regional engine depot maintenance capability for domestic and allied use, and provide experience relevant to further development of the Turkish National Combat Aircraft (MMU).

Given Turkey’s formidable air force; its strategic location in a region with key transportation, energy, and hydrocarbon resources; and improving relations with Israel, the United States can again view it as a reliable and strong strategic ally. With the right mindset, Turkish and US state authorities can still turn back time.

The way ahead

The resolution of issues related to the S-400, PYD, and YPG is key to mending relations between Turkey and the United States. Ideally, this must be followed by the approval of the sale of F-16Vs, the lifting of CAATSA sanctions, and a return to the F-35 program.

Addressing Turkey’s security concerns is a prerequisite for successful and sustainable cooperation between strategic partners in the Middle East. This would allow for stability to be achieved in Syria, curtail the activities of foreign actors operating in the region, and encourage Syrian refugees currently residing in Turkey to return to Syria. Combined, these developments would drastically reduce the threats to Turkey’s security. In addition, it would have positive implications for peace and stability in the Eastern Mediterranean region, and it may also allow for the safe transport of natural gas extracted in the region to Europe via Turkey.

The United States, which has always prioritized Israel’s security in its Middle East policy, should also consider Turkey’s positive contributions to regional stability in the process of normalizing relations.

A partnership with Turkey is crucial for balancing China’s increasing economic and military strength in the Asia-Pacific region, especially as Russia’s position in the world has diminished as a consequence of its ongoing war in Ukraine. Turkey is located at a critical crossroads of the Middle East and the Caucasus. In the long run, Turkey’s strategic ties to Central Asia will also be an important asset for NATO. Hence, the United States must accept the importance of Turkey to NATO’s policy in these regions as an undeniable reality.

The Turkish-US relationship has had its bad days in the past. However, consultations resulted in the recognition of the significance of this strategic partnership, leading to a resumption of political and military relations. Now, similarly, I am hopeful that the US approach toward the support it provides to the PYD and YPG can be resolved in good faith alongside the S-400 issue.

Despite some members of Congress attempting to impose restrictions on Turkey similar to the 1975 arms embargo, I believe that the Biden administration will soon approve the supply of F-16V aircraft and the modernization package. This could potentially create a favorable atmosphere for Turkey’s return to the F-35 program as well, thereby removing obstacles to the development of bilateral political relations and a strengthened Turkish-US strategic partnership.

Turkish Air Force Lt. Gen. (ret.) Nihat Kökmen served as Turkey’s military representative to NATO from 2017 to 2019. Between 2001 and 2004, he served as the air plans officer at the Supreme Headquarters Allied Powers Europe. He currently serves as Executive and Supervisory Board member at the Centre for Economics and Foreign Policy Studies (EDAM).

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Table of contents

Executive summary

I. Introduction

II. The role of economic statecraft in a Taiwan crisis

Goals of economic countermeasures

Current economic statecraft tools

Tools in a future crisis

III. Sanctions scenarios and their costs

Economic countermeasures aimed at China’s financial system

Economic countermeasures aimed at individuals and entities associated with CCP and PLA leadership

Economic countermeasures aimed at China’s industrial sectors

IV. Practical challenges in sanctions development

Conclusions and recommendations

Executive summary

In recent months, growing tensions in the Taiwan Strait as well as the rapid and coordinated Group of Seven (G7) economic response to Russia’s invasion of Ukraine have raised questions—in G7 capitals and in Beijing alike—over whether similar measures could be imposed on China in a Taiwan crisis. This report examines the range of plausible economic countermeasures on the table for G7 leaders in the event of a major escalation in the Taiwan Strait short of war. The study explores potential economic impacts of such measures on China, the G7, and other countries around the world, as well as coordination challenges in a crisis.

The key findings of this paper:

1. In the case of a major crisis, the G7 would likely implement sanctions and other economic countermeasures targeting China across at least three main channels: China’s financial sector; individuals and entities associated with China’s political and military leadership; and Chinese industrial sectors linked to the military. Past sanctions programs aimed at Russia and other economies revealed a broad toolkit that G7 countries could bring to bear on China in the event of a Taiwan crisis. Some of these tools are already being used to target Chinese officials and industries, though at a very limited scale.
2. Large-scale sanctions on China would entail massive global costs. As the world’s second-biggest economy—ten times the size of Russia—and the world’s largest trader, China has deep global economic ties that make full-scale sanctions highly costly for all parties. In a maximalist scenario involving sanctions on the largest institutions in China’s banking system, we estimate that at least $3 trillion in trade and financial flows, not including foreign reserve assets, would be put at immediate risk of disruption. This is nearly equivalent to the gross domestic product of the United Kingdom in 2022. Impacts of this scale make them politically difficult outside of an invasion of Taiwan or wartime scenario.
3. G7 responses would likely seek to reduce the collateral damage of a sanctions package by targeting Chinese industries and entities that rely heavily and asymmetrically on G7 inputs, markets, or technologies. Targeted sanctions would still have substantial impacts on China as well as sanctioning countries, their partners, and financial markets. Our study shows economic countermeasures aimed at China’s aerospace industry, for example, could directly affect at least $2.2 billion in G7 exports to China, and disrupt the supply of inputs to the G7’s own aerospace industries. Should China impose retaliatory measures, another $33 billion in G7 exports of aircrafts and parts could be impacted.
4. Achieving coordination among sanctioning countries in a Taiwan crisis presents a unique challenge. While policymakers have begun discussing the potential for economic countermeasures in a Taiwan crisis, consultations are still in the early stages. Coordination is key to successful sanctions programs, but high costs and uncertainty about Beijing’s ultimate intentions will make stakeholder alignment a challenge. Finding alignment with Taiwan in particular on the use of economic countermeasures will be central to any successful effort. G7 differences on Taiwan’s legal status may also prove a hurdle when seeking rapid alignment on sanctions.
5. Deterrence through economic statecraft cannot do the job alone. Economic countermeasures are complementary to, rather than a replacement for, military and diplomatic tools to maintain peace and stability in the Taiwan Strait. Overreliance on economic countermeasures or overconfidence in their short-term impact could lead to policy missteps. Such tools also run the risk of becoming gradually less effective over time as China scales up alternative currency and financial settlement systems.

I. Introduction

For decades, Taiwan’s deepening economic ties with China and the rest of the world have helped maintain peace and stability in the Taiwan Strait. Mutual trade and investment have spurred rapid economic growth and—at least until recently— appeared to diminish the likelihood of military conflict.

The long-standing guardrails around the China-Taiwan status quo have weakened. Intensifying US-China geopolitical tensions, China’s increased use of military and economic tools to put pressure on Taiwan, Beijing’s draconian handling of Hong Kong, and evolving Taiwanese perspectives on their national identity and relationship with the mainland have all contributed to rising tensions. Taiwan’s presidential elections set for early 2024 increase the risk of escalation, as do both a rancorous US debate on China and political anxiety in Beijing in the face of a deteriorating economic outlook.

As concerns grow, so does awareness of the global economic stakes of a Taiwan crisis. Prior Rhodium Group research estimates that more than $2 trillion of global economic activity would be at risk of direct disruption from a blockade of Taiwan annually.¹ This is a likely underestimate of the short- and long-term economic fallout of a full-blown crisis. In all cases, the scale of these likely global impacts—ranging from widespread goods shortages, mass unemployment, and a possible financial crisis—underscores the need for clear-eyed analysis about the costs of a conflict. 

In this context, policymakers and business leaders around the world have begun discussing the potential role of sanctions and other economic countermeasures in a military crisis. The G7’s coordinated use of sanctions against Russia in the wake of its invasion of Ukraine have highlighted the range of tools on the table. In Washington and other G7 capitals, as well as in Beijing, leaders are now considering the potential for, and implications of, sanctioning China. Yet G7 coordination in a Taiwan crisis would involve a different set of challenges. China’s economy is ten times larger and more globally interconnected than Russia’s, raising questions about the viability of joint economic countermeasures.

Given these open questions, the purpose of this report is to provide a data-driven and objective first look at the potential for a coordinated G7 response to a Taiwan crisis. It evaluates different economic statecraft tools and considers the global economic repercussions from their use. Based on an extensive series of in-person roundtable discussions in the United States, the European Union, and the United Kingdom, interviews held with G7 policymakers and experts, and our own independent economic analysis, the report sets out the order of magnitude of what is at stake and the coordination that would be required for sanctions options to be effective.

While few US, European, and Chinese officials want to see tensions escalate in the Taiwan Strait, the past year has shown that situations previously regarded as highly unlikely can quickly materialize into a devastating reality. Understanding the scenarios and risks of using the tools of economic statecraft is not only a useful exercise, but also a critical step in ensuring all sides understand the full impact of actions that may be undertaken in a crisis.

II. The role of economic statecraft in a Taiwan crisis

A sense of heightened risk in the Taiwan Strait and the use of sanctions against Russia has led decision-makers around the world to reflect on the potential use of economic countermeasures against China in a Taiwan crisis. US lawmakers have already proposed legislation mandating sanctions on China in the event of an invasion of Taiwan.² Surveys of European countries underline an increasing—if still minority—willingness to sanction China if it were to take military action against Taiwan.³ Officials in Beijing are asking these questions as well, with China’s State Council reportedly considering the potential for Western sanctions in a Taiwan crisis.⁴ The economic fallout from sanctions on Russia have also led business leaders and major banks to conduct contingency planning exercises exploring their exposures to a cross-strait crisis, including sanctions on China.

In defining what sanctions to use—if any—policymakers are likely to take a series of factors into consideration: what goals they are looking to achieve, what options are on the table to achieve those goals, and their relative impacts, costs, and limitations. This section reviews these factors and lays out the most likely options on the table.

Goals of economic countermeasures

Economic countermeasures—defined broadly here to include financial sanctions, export controls, and other restrictions on economic activity—can have a variety of objectives. They may aim to deter aggression, either by promising punitive economic actions in response to a transgression (deterrence by punishment) or by denying an adversary the technology or resources to engage in aggressive activity in the future (deterrence by denial). They may also aim to degrade an adversary’s ability or willingness to sustain aggression after it has begun.

The aim of economic countermeasures may evolve over time. The United States had long imposed export controls to limit the flow of military and dual-use technology to Russia. Immediately prior to Russia’s full-scale invasion, the United States and allies threatened sanctions on Russia in a bid to deter military action. After the invasion, the focus of sanctions shifted to degrading Russia’s ability and willingness to continue the war. Sanctions may also have had a signaling effect that G7 countries were aligned and willing to bear prolonged costs in support of Ukraine.

As in the case of Russia, the United States and allies have limited the flow of arms and military technology to China in part to blunt its ability to engage in aggression against Taiwan long before a potential crisis. The proper design of these long-term restrictions is a matter of contentious debate in the field of export controls and technology policy, but is not the focus of this paper.

Some G7 partners are already communicating to China that actions short of an invasion could trigger economic countermeasures

Economic countermeasures might also be considered after a full-scale invasion of Taiwan to degrade China’s ability to sustain the conflict. In fact, interviews and roundtables highlighted near consensus about the fact that sanctions would be imposed on China were it to use military power to seize Taiwan. However, if the case of Russia is any guide, these sanctions take time to have an effect. Recent studies suggest that absent military intervention from the United States and allies, Taiwan is unlikely to withstand a full-scale invasion for the length of time necessary for sanctions alone to meaningfully degrade China’s military capacity.⁵

Some level of sanctioning might therefore also be contemplated in a crisis below the level of invasion, to deter further aggression. Some G7 partners are already communicating to China that actions short of an invasion could trigger economic countermeasures. These actions are the core focus of this report. While we do not identify specific triggers for economic action below invasion—because these are still intensely debated—they might include a military quarantine scenario, where the PRC restricts the free movement of ships or planes to Taiwan; acts of overt economic coercion such as wide-ranging punitive restrictions on cross-strait trade; and major cyberattacks or other disruptions to telecommunications networks on the island. Taiwanese officials have described some of these below-invasion scenarios as the most likely and pressing military risks to Taiwan’s sovereignty.⁶ Some of these “gray zone” actions, besides, come with high global economic costs that could warrant efforts by G7 nations to deter Chinese actions.⁷

Current economic statecraft tools

In looking to achieve these goals, G7 leaders have a range of tools available. Many economic countermeasures have been deployed in the context of previous crises (Table 1), including Russia’s 2014 annexation of Crimea and 2022 full-scale invasion of Ukraine, making them useful starting points to assess potential future action.

In understanding whether these tools could also be deployed in a major cross-strait crisis, it is important to remember that some tools are already being used against China today, both by the United States and other members of the G7. Actions include, among others:

• Export controls including product-based and end-user-based controls on certain strategic technologies, such as semiconductors, integrated circuits, and supercomputing technology.⁸
• Restrictions on the trading of debt and equity instruments in certain military-related companies under the Non-SDN Chinese Military Industrial Complex Companies List.⁹
• Sanctions imposed on persons involved in the repression of minorities in Xinjiang, as well as small Chinese banks aiding Iran and North Korea in sanctions evasion.¹⁰
• US and EU coordination of sanctions against Chinese firms involved in supporting Russia’s war on Ukraine.

While these measures are applied at a much smaller scale than they would be in a Taiwan Strait crisis, they illustrate the fact that G7 nations have already shown willingness to use economic measures against China when Chinese actions or policies were considered problematic. Importantly, these measures have been selective. From manufactured goods to inputs for electric vehicles, to machine tools, and pharmaceuticals, China is deeply embedded in global supply chains in a way wholly more complicated than Russia’s energy exports. At the same time, China’s reserves, capital controls, the state-owned banking sector, and abundant fiscal space provide the Chinese economy with critical buffers and economic defense mechanisms.

Tools in a future crisis

In imposing sanctions in a Taiwan crisis, G7 partners would seek to amplify existing measures taken against China and focus on asymmetric dependencies. Policymakers will likely look to the same types of targets described in Table 1, with varying intensity depending on the level of escalation, namely:

1. Sanctions on China’s financial sector
2. Sanctions on individuals associated with the leadership of the Chinese Communist Party (CCP) and People’s Liberation Army (PLA)
3. Restrictions on industrial companies in sectors relevant to China’s defense industrial base

We take these three types of tools as our baseline for likely G7 countermeasures in a Taiwan crisis and analyze each in depth.

While these are the most likely sets of tools identified by experts based on past actions, future crises may bring new tools to the table too. Conversations with US and European officials made clear that Russia’s invasion of Ukraine reshaped the contours of what was possible in the realm of economic statecraft. Just as blocking Russia’s central bank reserves and implementing an oil price cap were initially considered unrealistic, crises may spur discussions around new tools. Roundtable discussants raised options ranging from targeting casinos in Macau, which are regarded as havens of capital flight for China’s elite as well as illicit finance and money laundering; to imposing controls on China’s digital industries and firms, which power much of the country’s urban and consumer economy; to limiting access to International Monetary Fund (IMF) Special Drawing Rights, and stopping repayments of dollar-denominated Belt and Road Initiative (BRI) debt. We do not explore these potential countermeasures in this study. However, some of the ideas discussed by stakeholders illustrate the range of additional tools that could be brought to bear in a crisis.

III. Sanctions scenarios and their costs

In this section we examine three likely channels of G7 sanctions—on China’s financial system, on certain individuals and entities, and on industrial sectors. We provide an assessment of China-G7 economic value at stake through use of each type of tool, and evaluate implementation challenges, possible effectiveness, and risks.

Economic countermeasures aimed at China’s financial system

In a Taiwan crisis, G7 leaders could consider deploying economic countermeasures targeted at China’s financial system. Financial sector sanctions are a central pillar of the G7’s recent sanctions program aimed at the Kremlin. These measures include actions to block transactions with major Russian banks, freeze their assets, and deny them access to the global dollar payments infrastructure.

This section explores the economic implications of sanctions on China’s financial system, considering two primary options: a targeted sanctions program to limit dollar financing to small banks involved in funding military-related activities, and a comprehensive sanctions program targeting China’s four largest banks and its central bank with the aim of cutting China off from global financial markets.

Global economic links: Finance

For an economy of its size, China has relatively limited external financial sector ties. China is the world’s second-largest economy and has the largest volume of international goods trade, yet it ranks eighth and ninth in the world in terms of total external assets and liabilities.¹¹ Nonetheless, these ties have critical global importance. As of the end of 2022, China held 95 percent of its $3.3 trillion in reserves in foreign currency (with the remaining held in gold).¹² China does not report the exact composition of its foreign exchange reserves, but it is known to hold at least $1.1 trillion in US government bonds through US custodians, and more routed through custodians in Belgium,¹³ as well as about $300 billion in corporate debt and equity.¹⁴ The remainder of China’s foreign currency reserves are held predominantly in euros, Japanese yen, and pounds sterling.¹⁵ In addition to China’s official reserves, China’s banking sector holds $1.5 trillion in cross-border assets according to State Administration of Foreign Exchange statistics, most of which is held in G7 currencies.¹⁶ 

Global bank holdings of assets within China’s banking system are much lower. On average, only 3 percent of global central bank reserve holdings are in RMB-denominated assets.¹⁷ G7 banks hold $112 billion in claims on Chinese banking institutions such as loans, deposits, and debt instruments, which is only 1 percent of total cross-border bank claims.¹⁸ While this means that global banks, on average, are not heavily exposed to China in terms of explicit bank assets, it also means that Chinese banks primarily borrow from Chinese domestic savers and do not depend heavily on foreign borrowing to maintain their balance sheets.

Global exposures to China’s banking system are much greater when considering China’s role facilitating cross-border financial flows, particularly trade. When Chinese importers and exporters do business abroad, they typically do so in foreign currencies: 77 percent of China’s total $6.8 trillion in goods and services trade is settled in currencies other than the RMB, primarily US dollars and euros.¹⁹ To facilitate these cross-border payments, Chinese banks maintain correspondent accounts at global banks, which debit or credit dollar and euro payments to the Chinese correspondent accounts on behalf of the foreign customer or supplier. Maintaining these correspondent accounts is a key part of the financial infrastructure underpinning global trade.

Chinese banks also finance other important cross-border flows, including $384 billion in repatriated income from foreign businesses and investments, $330 billion in inbound and outbound direct investment, and $381 billion in cross-border portfolio investment.²⁰

Scenarios

With these financial sector linkages in mind, we consider two potential sanctions scenarios: one in which G7 countries would impose limited sanctions on a small bank with linkages to China’s military or technology sector, and another where they would deploy full-scale sanctions on China’s central bank and China’s Big Four banking institutions.

Limited sanctions scenario

One potential scenario would involve imposing blocking sanctions on a small Chinese bank with limited financial ties to the global financial system and with links to China’s military or dual-use technology sectors. The nominal purpose of these sanctions would be to constrain the flow of foreign financing to military-relevant economic activities.

Actions of this kind have been imposed by the United States before. In 2012, the US Treasury Department sanctioned China’s Bank of Kunlun for providing financial services to six Iranian banks sanctioned by the United States for involvement with Iran’s weapons program and international terrorism.²¹ In 2017, the United States issued a final rule under Section 311 of the USA PATRIOT Act severing China’s Bank of Dandong from the international dollar financing system for its role in helping the Democratic People’s Republic of Korea (DPRK) evade sanctions.²²

The Bank of Kunlun and Bank of Dandong were relatively small and had limited ties to the global financial system. The financial impact from these actions on the global financial system was minimal. In the case of the Bank of Dandong, for instance, the bank processed $844 million in cross-border transactions in 2016 just prior to being identified as an institution of “primary money laundering concern,” a modest sum in the broader picture of global financial flows.²³ While these banks were cut off from the global dollar financing system, they remain connected to the rest of China’s banking sector. As raised in our roundtables, this enables them to continue providing financial services for US sanctioned entities, including Iran and the DPRK.

In a Taiwan crisis scenario, policymakers would face a similar challenge. G7 countries could impose blocking sanctions on small banks, freezing any foreign assets held in G7 jurisdictions and prohibiting domestic individuals and entities from transacting with those banks. However, even if the sanctioned banks lost direct access to correspondent banks in the United States and Europe, they would still have access to financing channels from other Chinese banks, and China’s military-industrial enterprises could still easily access dollar financing, if needed, from other channels in China’s state-run banking system. Rather than make a substantial impact on China’s financing flows, the primary impact of these types of sanctions would be limited to conveying an intent to escalate financial sanctions further, potentially on larger, more systemically important institutions.

Full-scale financial sector sanctions scenario

At the other extreme, the United States and allies could take much more drastic measures against China’s financial system by, for example, imposing blocking sanctions and denying SWIFT access to China’s central bank, its finance ministry, and China’s Big Four banks, which collectively hold one-third of China’s total banking assets.²⁴

The economic impact of such moves would be dramatic, both for China and for the world. This would effectively freeze China’s foreign exchange reserves held in overseas custodial accounts, making them unusable for the defense of China’s currency or to meet short-term obligations to finance China’s imports or external debt repayments. The bulk of overseas assets of the Big Four banks —amounting to around $586 billion—would be frozen.²⁵ This represents a floor, not the ceiling, of the global economic disruption from these actions, which are many magnitudes higher.

G7 assets in China would also be at risk. It is likely that China would freeze the (relatively small) renminbi-denominated holdings of G7 banks. Chinese banks, facing a sudden shortage of foreign exchange due to asset freezes, would likely fall into technical default on G7 bank-issued debt, totaling around $126 billion.

Sanctioned banks would also be cut off from the international dollar payments system. Chinese banks do not systematically report the scale of their cross-border transaction settlements, so we are left to estimate the scale of disruption if China’s Big Four banks were sanctioned. Starting from China’s balance of payments statistics on cross-border trade and investment, we estimate what share of that activity is attributable to the Big Four. We assume that the Big Four banks’ role in facilitating cross-border trade and investment is proportional to their share of foreign asset ownership in China’s whole banking sector, indicating approximately $3 trillion in trade and investment flows could be put at risk, primarily from disruptions to trade settlement. This is only a rough estimate and is likely an undercount, but it illustrates the scale of economic activity at risk from full-scale sanctions on China’s largest banks.

Over the long term, Chinese importers and exporters could move to other, unsanctioned banks for trade settlement and finance, but the immediate disruption to global trade would be substantial and smaller banks would likely struggle to backfill the enormous demand for trade-facilitating financial services in the short term. Eventually, Chinese importers and exporters would adapt to financial-sector sanctions by turning to a different set of banks and potentially engaging in more renminbi-denominated transactions (see Box 1 on China’s international payments alternatives). But the vast majority of China’s exports would be impacted in the short term, as it would be extremely difficult for Chinese companies to receive US dollar- or euro-denominated payments for goods.

$3 trillion in trade and investment flows could be put at risk, primarily from disruptions to trade settlement.

Freezing China’s official foreign exchange assets would also have substantial global spillovers. An asset freeze of China’s dollar reserves would suddenly make dollars in China scarce, driving down the value of the renminbi relative to the dollar. Beijing could fight this depreciation pressure in the short term through strict capital controls and exchange rate interventions, but ultimately would need to allow the renminbi to depreciate to ease outflow pressures and stabilize China’s balance of payments.

A weaker exchange rate would make goods imports more expensive and reduce China’s global economic throw weight. Disruptions to China’s export trade would also entail substantial economic hardship and financial stress for Chinese companies and suppliers to global markets. However, assuming that Chinese exporters and importers eventually found other non-sanctioned banks to legally conduct trade with foreign counterparties, China would still avoid a balance of payments crisis. China presently runs a large current account surplus, providing a consistent flow of dollars into its financial system. In fact, devaluation of the renminbi would ultimately make Chinese exports more competitive relative to other countries, which would push some of the impact of sanctions on to exporters in those countries. Other emerging market currencies, including those of US allies, would be likely to depreciate sharply against the US dollar as well. Countries that depended upon exports to China, such as Angola and Brazil, would see those export markets contract sharply.

The imposition of broad-based financial sanctions on Chinese banks would create significant dislocations within the global financial system and would likely require a coordinated policy response among developed market central banks in order to manage the fallout. Global supply chains would be upended while exporters and importers routed activities to unsanctioned banks. Countries that rely on dollar financing— to finance trade with the United States and Europe, for instance—would face a surge in financing costs, requiring the Federal Reserve to pump dollars back into the global economy through central bank swap lines. But even if swap lines with China were prohibited, these dollars would find their way back into China’s economy due to its trade surplus with the rest of the world.

Takeaways

While it is likely that a financial sanctions package would be on the table in the case of a major Taiwan crisis, avenues for sanctioning China’s financial system face limitations. A lower-scale response that targeted small banks involved with financing military activities would limit the negative impact on the global economy, but it would have little effect on Chinese behavior or military activities because other financing channels would remain open. On the other extreme, a full-scale sanctions response targeting China’s central bank and most of the country’s major commercial banks would have massive economic spillovers—for China’s economy, but also for the global financial system and the global economy. Second-order consequences could include a tightening of global trade financing conditions; weakness in emerging market currencies and balance of payments problems in emerging markets; major supply chain disruptions and interruptions to global manufacturing of consumer goods; and inflationary short-term impacts from interrupted China-world trade.

Sanctions on China’s financial sector could end up falling somewhere between these two extremes, with sanctions placed on midsize banks, for instance. Impacts from these sanctions on trade and financial markets would be more moderate than in the case of a maximal sanctions scenario, but these face many of the same limitations as more comprehensive sanctions.

Fundamentally, the long-term strategic benefit of financial-sector sanctions is unclear. Imposed on small banks, they would have minimal impact on China’s ability to finance military activities. At a large scale, sanctions would disrupt trade with China in the short run, but they would not fundamentally change China’s position within global manufacturing supply chains. Over time, China’s terms of trade would probably improve along with a weaker exchange rate. The symmetrical impact of such sanctions on China and the rest of the world reduces the credibility of such broad-based financial sanctions as a deterrent.

Box 1: How Well-Developed Are China’s International Payments Alternatives? 

Over the past five years, China’s Ministry of Finance and the People’s Bank of China (PBOC) have established several platforms to facilitate cross-border transactions and reduce reliance on dollar-based payment systems. Given the increased interest from across the Global South in alternative payment systems to the dollar in the wake of G7 sanctions on Russia, it is likely that in the next five years more of the Chinese systems could be used as a means of sanctions evasion.

In 2015, China launched its Cross-border Interbank Payment System (CIPS) to function as a settlement and clearance mechanism for renminbi transactions. An alternative to the dollar-based Clearing House Interbank Payment System (CHIPS), CIPS is supervised by the PBOC, and participants have the opportunity to message each other through the CIPS messaging system.

Data on CIPS usage suggest that transaction volumes have more than doubled in that period, growing by 113 percent.²⁶ However, while China is making significant progress in developing international payment alternatives, it lags behind the established global payment ecosystem.²⁷ Research indicates that CHIPS has ten times more participants and settles forty times more transactions compared to CIPS.²⁸ These incumbents have well-established networks, widespread acceptance, and trust among global users.

Perhaps the most significant payment alternative is China’s development of its Central Bank Digital Currency (CBDC), the e-CNY, which began in 2017. The retail CBDC project focuses on enabling individuals and businesses to use the e-CNY for everyday transactions. Interestingly, the PBOC has over 300 staff working on their CBDC project, and only about one hundred working on CIPS.²⁹ However, this retail CBDC project may have limited ability to help internationalize the yuan and facilitate its use as a means of sanctions evasion given its domestic focus and the lack of infrastructure for cross-border use.

The same cannot be said, however, of China’s wholesale CBDC ambitions. China’s wholesale project aims to streamline interbank transactions and improve its cross-border financial system efficiency. Project mBridge is a joint experiment with the Hong Kong Monetary Authority, Bank of Thailand, Central Bank of the United Arab Emirates, and Bank for International Settlements to create common infrastructure that enables real-time cross-border transactions using CBDCs. In October 2022, the project successfully conducted 164 transactions in collaboration with twenty banks across four countries, settling a total of $22 million, with almost half of all transactions in the e-CNY.

This initiative demonstrates China’s active involvement in exploring innovative solutions for international payments, particularly in the context of cross-border transactions which do not use dollars or euros. This system, though not yet ready for full launch, could help countries bypass dollar-denominated systems like SWIFT or CHIPS and develop an alternative financial architecture.

The biggest challenge for new China-based cross-border payments architecture is liquidity. China maintains capital controls on yuan and offshore clearing, and settlement of yuan is severely limited in comparison to the dollar, euro, pound, and yen. Removing these capital controls to provide liquidity pools for offshore clearing and settlement in yuan will come with some financial instability in Chinese markets, which is undesirable to leadership in the short term.

However, even if certain transactions will be more costly to execute, the recent history of sanctions evasions shows actors are willing to pay a premium to have specific transactions avoid dollars and US enforcement. China is investing significant resources in scaling up these capabilities.

Economic countermeasures aimed at individuals and entities associated with CCP and PLA leadership

Sanctioning the leadership and key associates of adversarial governments, criminal organizations, and terrorist groups is a well-established mechanism deployed by G7 nations and international organizations, including the United Nations. These measures are meant to pressure the targeted individuals, organizations, and governments to change their behavior or policies, while freezing their assets and restricting their ability to raise, use, and move funds.³⁰. In the event of a Taiwan crisis, G7 countries could impose targeted financial sanctions on Chinese government and military officials as well as other politically connected elites to attempt to deter further escalation and increase economic pressure on General Secretary Xi Jinping and his close allies.

Sanctions targeting Russian government and military officials and elites have been a central part of the G7 and allies’ sanctions strategy to counter Russia’s aggression toward Ukraine. Since the 2014 invasion of Crimea, G7 allies have collectively sanctioned more than 9,600 Russian-linked individuals, with a specific focus on government and military officials, oligarchs, and others with links to the regime as well as their family members and close associates who received asset transfers before a sanctions designation.³¹ As of March 2023, members of the Russian Elites, Proxies and Oligarchs (REPO) Task Force—a coalition of G7 nations, Australia, and the European Commission—have blocked Russian assets valued at more than $58 billion, including both financial accounts and assets such as real estate and luxury goods.³²

Separately, some G7 nations have imposed unilateral sanctions on PRC officials in response to human rights abuses and PRC actions in Hong Kong. As of May 2023, the United States had designated forty-two government officials, including former Chief Executive of the Hong Kong Special Administrative Region Carrie Lam and other PRC government officials, in response to actions undermining Hong Kong’s autonomy.³³ In March 2021, the EU also made a rare use of its Global Human Rights Sanctions Regime to sanction four high-ranking Chinese officials for their involvement in human rights abuses against ethnic minorities in the Xinjiang Uyghur Autonomous Region, with sanctions including travel bans and asset freezes³⁴—a move complemented by economic countermeasures taken the same day by the United States, the United Kingdom, and Canada.³⁵

It is highly likely that G7 nations would consider multilateral targeted designations against Chinese government and PLA officials and their associates in a major Taiwan crisis, given their relative success coordinating multilateral sanctions to counter Russia’s invasion of Ukraine.³⁶ The following section explores economic ties at stake and potential sanctions scenarios.

Global economic links: Individuals abroad

Assessing the scale of overseas assets covered by a potential sanctions regime on Chinese government, party, and military officials is extremely complex. There is limited available public information on the wealth of Chinese officials, in large part because that wealth is concealed via layers of personal networks and investment vehicles, and is often managed by third parties. These third parties invest on behalf of officials in domestic and overseas properties, publicly listed companies, and other investments—often in offshore jurisdictions such as the British Virgin Islands (BVI), the Cayman Islands, and Samoa. These offshore company structures often open bank or brokerage accounts in other jurisdictions, thereby further obscuring the relationship to the ultimate beneficiary.

For the purpose of this study, the authors used data derived from investigative reports and leaks of financial information such as the Panama Papers, which combined give a broad sense of the scale of assets connected to some of the highest-ranking figures of China’s leadership. In 2012, Bloomberg reported that Xi’s extended family held more than $400 million in business holdings and real estate.³⁷ The same year, reporting by the New York Times identified $2.7 billion in assets linked to former Premier Wen Jiabao and his close network.³⁸ Leaks of financial information including the offshore accounts analyzed by the International Consortium of Investigative Journalists in 2014 confirmed the existence of shell companies incorporated in the British Virgin Islands that are linked to the relatives of Wen and Xi, although the value of assets linked to these companies is unknown.³⁹ The leaked information also contained evidence of BVI-incorporated companies held by relatives of former Premier Li Peng and former President Hu Jintao, among others. Despite the opacity surrounding the overseas assets of the elite of the CCP, these single cases are potential indications that relevant, sanctionable assets likely represent tens of billions of dollars in aggregate.

This figure could grow quickly if the targets of financial sanctions were extended beyond high-level CCP and PLA leadership to include politically linked private business leaders. The estimated net worth of the top 200 wealthiest people in China is around $1.8 trillion.⁴⁰ Twenty-nine of those business leaders are current members of the National People’s Congress (NPC) or the Chinese People’s Political Consultative Conference (CPPCC), with a combined net worth of $278 billion. Much of this net worth is, however, linked to business activities taking place in China, rather than within G7 jurisdictions.

Twenty-nine of those business leaders are current members of the National People’s Congress (NPC) or the Chinese People’s Political Consultative Conference (CPPCC), with a combined net worth of $278 billion

Scenarios

A scenario involving sanctions on Chinese officials could proceed in several stages, with a first set of actions targeting a narrow and lower-level set of party, government, and military officials with direct links to a Taiwan crisis. Further actions could expand these sanctions to close associates of designated individuals, a longer list of officials, or ultimately to a broader set of politically connected business elites. Under the most extreme of scenarios, these sanctions could be widened to include China’s highest-level leaders in response to major developments in the Taiwan Strait.

Sanctions on a narrow set of CCP, government, and military officials 

One likely scenario would involve sanctions—asset freezes and travel bans—imposed on a narrow group of CCP, government, and military officials with clear responsibilities over actions taking place in the strait. China’s current minister of defense, Li Shangfu, is already under US sanctions⁴¹—but designations could be extended to cover select members of the Central Military Commission or high-ranking PLA commanders. These could also include close advisers to these officials or to China’s high-level leaders on Taiwan-related issues.

The nominal purpose of these sanctions would be largely symbolic, and a means to condemn Beijing’s actions. Their effectiveness in changing behavior is likely to be extremely limited and could contribute to a hardening of positions. Most of this group of designated officials would likely be highly aligned with Xi’s decisions on Taiwan. Narrowly crafted sanctions on officials might also generate limited financial outcomes, given that these individuals are already under tight political scrutiny in China and unlikely to be allowed major overseas holdings. The scope of sanctionable assets might grow marginally larger, however, if close associates and family members are included, especially children of government officials studying in G7 countries, as well as close aides and the third parties handling their investments. Similar to the Russian case, these individuals may become a focus for the G7 if asset transfers occur ahead of designations.

Sanctions on a wider range of CCP, government, and military officials as well as business elites 

In response to an escalation in the Taiwan Strait, G7 countries could decide to progressively expand sanctions to cover a longer list of government, CCP, and PLA officials. The list could also include certain business elites with known links to China’s leadership, who lend their public or financial support to China’s actions, or those who are active in sectors linked to China’s military-industrial base. The United States has already designated several Chinese executives and companies for breaking US law by providing support to North Korea, among other violations.⁴²  

In addition to asset freezes and travel bans, G7 governments might impose restrictions on professional and financial services provided to these elites, including wealth management or business advisory services.⁴³ While Chinese clients overwhelmingly rely on the expertise of wealth managers based in Hong Kong, a small percentage of other managers are located in Switzerland (1.6 percent), the UK (1.6 percent), and the United States (1.1 percent).⁴⁴ 

The purpose of this second round of sanctions would be to attempt to pressure these officials to push internally for a change in policy. Assuming intelligence about their overseas assets were available to G7 implementing authorities, these broader sanctions could end up covering tens of billions of dollars in overseas assets. The costs to designated officials could be high: besides the financial implications of an asset freeze, even the public revelation of foreign assets could be politically damaging.

Our roundtable participants noted that sanctions on individuals amid a Taiwan crisis could potentially produce a stronger response than has occurred with recent designations of Russians. Whereas many Russian officials have been under sanction since 2014 and have had time to adapt, such sanctions on China would be mostly new and immediately impactful to those designated.

Still, it remains unclear whether sanctions on China’s business elites would compel a change in policy. Business leaders arguably have the most to lose from Chinese aggression against Taiwan to begin with, since disruptions in trade and investment with Taiwan and G7 partners will affect businesses first and foremost. The waning influence of the private sector in governance due to crackdowns on the technology and financial sectors under Xi raises further questions about business elites’ ability to influence policy outcomes toward Taiwan.

Sanctions on China’s high-level leaders

In an extreme escalation in the Taiwan Strait, sanctions could end up targeting China’s highest-ranking officials including most members of the Political Bureau of the CCP’s Central Committee and Xi himself. If Russia sanctions are any indication, this third circle of sanctions could also include China’s ministers of foreign affairs, science, and technology or finance, the PBOC governor, or high-level members of China’s legislative bodies (the NPC and CPPCC). These sanctions would similarly be largely symbolic.

Takeaways

The G7’s response to Russia’s invasion of Ukraine demonstrates that coordinated multilateral financial sanctions on political and business elites are now a central tool in G7 economic statecraft. By design, these sanctions have the benefit of having relatively low immediate economic impacts on G7 economies, concentrating costs on a small number of targeted officials. In principle, these sanctions also have the benefit of avoiding indiscriminately targeting China’s broader populace.⁴⁵ Though in practice they often end up inadvertently affecting the broader population or the national economy, as foreign banks and private-sector entities reduce exposure to a broader range of individuals or entities than the ones directly sanctioned.

Their effectiveness as deterrence tools in a Taiwan crisis is in question, too. Narrow sanctions on CCP, government, and PLA officials would probably end up targeting political leaders already aligned with Xi’s decisions on Taiwan. Chinese officials may conceal their offshore assets through complex personal networks and corporate structures that are potentially painful and costly to unravel. They also require tight coordination and information sharing among sanctioning parties, in order to locate and act against sanctioned individuals’ assets across jurisdictions. (The foundation for this cooperation does exist, however, as a result of recent sanctions on Russia).

Broader sanctions on business elites could freeze greater overseas wealth, but this may have limited impact on policy outcomes. Private business leaders are already incentivized to disfavor Chinese aggression toward Taiwan and have diminishing political sway after years of power centralization under Xi. Yet because they are an important signaling tool, sanctions on Chinese officials would very likely be considered in a major Taiwan crisis.

Economic countermeasures aimed at China’s industrial sectors

Finally, G7 leaders may consider deploying export controls and other economic statecraft tools against Chinese companies or industries linked to China’s military or defense industrial base.

These actions featured prominently in the G7 sanctions program on Russia, with a variety of trade and investment-related measures imposed on companies and industries linked to mining, electronics, aviation, and other sectors. The United States implemented stronger sector-wide export controls on certain industrial and electrical equipment, added military-linked companies to the US Commerce Department’s (export-control) Entity List, and designated numerous companies on the SDN list.

Currently, Chinese firms with ties to the PLA and specific companies utilizing dual-use technologies already face sanctions and export controls. This signals additional businesses operating in these sectors as likely targets in a Taiwan crisis. In a crisis scenario, a number of economic countermeasures could be used to limit the flow of potential dual-use goods to China’s military and restrict the operation of sectors critical to China’s defense industrial base.

This section describes the economic linkages between potentially targeted sectors and the global economy, as well as the economic assets and flows that could be implicated under an economic statecraft program. To bring more granularity to our analysis, we use a case study approach that explores the potential for restrictions on China’s aerospace sector.

Our findings point to significant economic risks from a broad sanctions package, as well as deep interdependencies between China and G7 economies in potentially targeted sectors. This suggests that, if deployed, countermeasures would likely target narrower industries—or single firms within industries—where China depends on imported G7 technology and where global dependence on Chinese exports is small. Even then, sanctions could come with substantial costs to G7 technology exporters in the sanctioned industries.

Global economic links: Industries and supply chains

A number of Chinese industries could become the target of G7 countermeasures in the context of a major Taiwan crisis, due to their linkages to China’s defense sectors. Among them, chemicals, metals, electronics, aviation, and shipbuilding already feature prominently in US lists of Chinese military-industrial companies, including the Non-SDN Chinese Military-Industrial Complex Companies list and the Department of Defense’s Chinese Military Companies list—making them likely potential targets for future action.⁴⁶  

Collectively, these five industries already comprise over ten percent of Chinese gross domestic product, produce over $6.7 trillion in annual revenue, and employ over 45 million people.⁴⁷ They also are deeply linked to the global economy: in 2018, Chinese companies in these industries imported goods valued at $686 billion, and exported goods valued at nearly $1.1 trillion.

These sectors are also linked to the global economy through investment. Collectively they have been the destination for $107 billion in direct investment from the United States, United Kingdom, and European Union since 2000, and Chinese companies in these sectors have invested at least $179 billion abroad, either through acquisitions or greenfield investment, according to Rhodium cross-border FDI monitoring. Bloomberg data and Chinese official data suggest that foreign holdings of listed Chinese companies and their subsidiaries in these sectors amount to about $120 billion, and these firms have at least $76.9 billion in dollar-denominated debt instruments currently outstanding.⁴⁸

Scenarios

G7 countries have a range of economic countermeasures that could be brought to bear against select Chinese industries in the event of a Taiwan crisis. Here we consider two potential scenarios, a maximalist export controls scenario targeting major industries with comprehensive export controls, and a targeted sanctions scenario using China’s aerospace industry as a case study.

Maximalist export controls scenario

In an extreme scenario, G7 countries could impose strict export restrictions on trade with China on a range of major industrial sectors, such as chemicals, metals, electronics, and transportation equipment. These sanctions, though highly costly, would not be entirely unprecedented. In the case of Russia, the United States and other G7 countries imposed restrictions on exports in the oil and gas, metals and mining, defense, and technology sectors through a combination of tightened export controls and property blocking rules.

The disruptions to China from such sanctions would be substantial: G7 exporters are the source of 18 percent of the imported content these industries in China consume, totaling $153 billion based on trade in value-added data that estimates the origin and value of production activity along supply chains. G7 countries also account for 43 percent of China’s export market in these industries, putting $225 billion in Chinese manufacturing activity at risk. Altogether, over fifteen million jobs in China are estimated to depend on exports in these sectors. Many more jobs would be put at risk from the loss of imported inputs into Chinese production processes.

These dependencies run both ways, however, and impacts on the sanctioning countries would also be extremely high. The $153 billion in goods that G7 countries export to these industries in China support approximately 1.3 million jobs across the G7; and China itself is the source of 25 percent of G7 imports in these industries.

Even these substantial figures far underestimate the total economic impact from a total ban on trade between G7 economies and these industries in China. The value-added approach provides a useful estimate of the value that different countries contribute to well-functioning global value chains. But disruptions from a sudden stop of trade in these industries—in particular in hard-to-replace critical components—would result in massively greater economic disruption until alternative sources were fully brought up to speed.

Exports from China to the G7 would be disrupted as well. Trade restrictions on foreign inputs to these industries would affect Chinese production and exports. China could also take retaliatory action banning exports from these and other sectors to the G7.

In some cases, alternatives to disrupted trade flows might be found quickly, putting the efficacy of trade restrictions in doubt. A ban on G7 exports of iron ore to China, for instance, would disrupt only a small volume of trade unless other partners such as Australia, which exported $72 billion of iron ore exports in 2022, were also to join. Even so, these supplies could in large part be replaced by exports from other countries such as South Africa and Brazil.⁴⁹ Additionally, the G7’s challenges in halting the export of high-end Western technology to Russia following its invasion of Ukraine demonstrate that such regimes can be porous.⁵⁰

The deep interlinkages between Chinese and global industries mean potential economic disruptions from targeting certain sectors could be significant. Altogether, a conservative accounting of the trade flows disrupted by export controls in these sectors amounts to at least $378 billion in disrupted trade.⁵¹  

Except under extreme circumstances, it is unlikely that G7 leaders would be able to agree to trade restrictions on this scale. Germany, for instance, is deeply invested in and dependent on China in the chemicals industry. The French, UK, and US aviation industries have huge sales to China (see case study below), and Japan and non-G7 members South Korea and Taiwan are deeply connected with mainland China in electronics. These linkages would make agreeing on a broad package extremely difficult. Broad trade restrictions would also be indiscriminate in their impact on China’s citizenry, a fact with serious ethical implications and potentially political ones, as a broadbased export-control regime could in fact strengthen popular support for the government rather than undermine it.⁵²

Finally, a broad export-control package would have major spillovers to the global economy due to global value chains that depend on imports of Chinese intermediate goods (electronics, for instance) that would be disrupted by strict controls. These considerations make measures of this scale highly unlikely, except under the most extreme circumstances.

Targeted sanctions scenario

Due to the costs of a maximalist approach, economic countermeasures against China’s industrial sectors are more likely to be narrower in scope, targeting specific companies or subsectors with high technological dependencies on G7 countries and relatively low global dependency on Chinese exports. The key feature of these countermeasures would be asymmetry: imposing restrictions that disproportionately affect China’s economy. Importantly, asymmetry does not imply costlessness. Any effective trade restriction inevitably results in costs to the sanctioning economy and the global economy as a whole.

China’s aerospace industry, which depends on foreign-sourced engines and parts, provides a case in point. In a potential sanctions scenario, the United States and G7 partners could impose blocking sanctions and export restrictions on China’s two largest aerospace companies, the Commercial Aircraft Corporation of China (COMAC) and the Aviation Industry Corporation of China (AVIC). These companies depend heavily on inputs from overseas suppliers. Of the eighty-two primary suppliers to China’s first narrow-body jet, the COMAC C919, only fourteen are from China (and seven of those are Chinese-foreign joint ventures).⁵³ China’s most critical vulnerability is engines: all three of its domestically manufactured commercial aircraft rely on foreign-produced engines, and China’s domestic jet engine manufacturers are widely believed to be far behind Western competitors in terms of technological sophistication.⁵⁴

In a scenario in which blocking sanctions and export restrictions were placed on AVIC and COMAC, all exports of aerospace goods to these firms could be prohibited, amounting to approximately $2.2 billion in aerospace parts trade at risk.⁵⁵ However, the ultimate impact of such measures on China’s aerospace ambitions would be much greater. China has begun mass production of its ARJ21 regional airliner–which depends on GE engines–and exported its first model to Indonesia last year. COMAC’s flagship C919 narrow-body jet marked its first commercial flight in May 2023, and the country has aspirations to sell over 1,200 over coming years. Restricting the sale of aviation parts to COMAC and AVIC would substantially disrupt China’s civil aviation ambitions.  

$33 billion of G7 aerospace exports to China could be disrupted through retaliatory measures.

While the impact of these measures would be particularly acute for China, the costs on foreign aerospace companies would also be substantial. China could respond to restrictions by halting aerospace exports to G7 countries. China exported $1.2 billion in aircraft parts to G7 countries in 2018, including inputs to for eign airliners. While most are low-tech inputs, they can be difficult to replace in the short run: a shortage of wire connectors that coincided with widespread lockdowns in China in 2022 led to US production delays for the Boeing 737.⁵⁶ China could also respond by delaying purchases of Airbus and Boeing planes. In total, approximately $33 billion of G7 aerospace exports to China could be disrupted through retaliatory measures.

Foreign aerospace companies also have substantial tie-ups with AVIC and COMAC. Since 2000, US and British companies and those based in EU member states have invested an estimated $3.7 billion in China’s aerospace sector, according to Rhodium’s cross-border FDI tracking. A substantial number of these projects are connected to AVIC and COMAC, including Airbus’s A320 final assembly line in Tianjin, which produces six aircraft per month, about 10 percent of Airbus’s average monthly production.⁵⁷

AVIC and COMAC also have invested in global aerospace companies. AVIC, for instance, acquired Austrian FACC AG, which produces aerostructures and other components for Airbus, Boeing, and other global firms. In a scenario where COMAC and AVIC were put under blocking sanctions, these operations would likely be forced to wind down or divest

Finally, foreign investors would be exposed to losses in equity and debt in AVIC. Foreign equity holdings in twenty-four listed subsidiaries of AVIC companies totaled $1.4 billion, or 1.4 percent of their combined market capitalization as of April 2023.⁵⁸ Dollar-denominated debt issued by AVIC and subsidiaries amounted to $3.8 billion, approximately 21 percent of its total debt issuance.⁵⁹  

Sanctions on China’s leading aerospace companies and export controls on the components they import would be a heavy blow to its civil aerospace ambitions, making them a plausible economic countermeasure in a Taiwan crisis. However, the impacts on foreign aerospace companies would be significant given the high degree of trade and investment ties to China, making these countermeasures costly and potentially difficult to coordinate in a crisis. Targeted sanctions on other sectors where G7 countries hold asymmetrical technological advantages could also be considered, but these all come with non-negligible costs to the sanctioning economies as well.

Takeaways

China is deeply connected to the global economy in sectors that would potentially be targeted for economic countermeasures in a Taiwan crisis. The expansive nature of these ties would make broad export controls and trade restrictions extremely costly and likely hard to justify except in the most extreme circumstances.

Targeted sanctions on specific firms and technology choke points are more plausible, but they come with substantial costs to foreign companies. Our case study, with export controls placed on China and full blocking sanctions imposed on China’s leading aerospace manufacturers, shows that tens of billions of dollars in aerospace goods trade, inbound and outbound direct investment, and portfolio holdings in China’s aerospace sector would be put at risk. While China would face substantial challenges in achieving its goal of developing a strong domestic commercial aviation industry, foreign aerospace companies would lose out on billions of dollars in exports and sales to China and risk seeing billions of dollars in direct investment lost.

IV. Practical challenges in sanctions development

Beyond identifying specific tools and appropriate targets for economic countermeasures, policymakers will confront a range of complex coordination issues around implementing sanctions in a Taiwan crisis. Discussions with participants in our roundtables highlighted areas of consideration in developing economic countermeasures to deter aggression against Taiwan.

Understanding Taiwan’s perspective. A crucial factor in designing G7 economic responses to possible aggression against Taiwan should be the policy preferences of Taiwan itself. Depending on the nature of the crisis and political conditions in Taiwan, Taiwanese officials might not support economic countermeasures against China and opt for a de-escalatory response. Given the depth of economic ties between China and Taiwan, certain economic countermeasures against China could be highly costly for the Taiwanese economy. Public opinion would likely be divided on the question of how to respond. With only mixed Taiwanese support, G7 coordination on economic countermeasures could be difficult to achieve. Strong Taiwanese support on the other hand would make coordination easier, so long as Taiwanese actions were not seen to have precipitated the crisis.

Defining clear redlines and triggers across the G7. A key barrier to coordinating sanctions among G7 partners and with Taiwan arises from the difficulties in agreeing on what Chinese acts of aggression should trigger economic countermeasures. While some actions might be seen by all parties to have crossed redlines–such as a military quarantine of Taiwan—Chinese coercion against Taiwan often takes the form of “gray zone” measures that are more ambiguous and brush up against but do not clearly cross redlines.⁶⁰ Getting G7 nations to agree to impose economic countermeasures against China in response to such actions will be more challenging. The roundtables highlighted different levels of tolerance for escalatory action measures among G7 partners.

The specific drivers of a crisis would matter as well: European experts note that a crisis that was seen to be provoked by the United States or Taiwan would make G7 alignment more difficult, especially given divergent views among EU member states about how to respond to a cross-strait crisis.

Coordinated signaling in order to deter. The challenges involved with identifying redlines and agreeing on responses in advance also complicate efforts to signal resolve to China. Successful deterrence depends on the would-be aggressor knowing what actions would provoke a response and believing that the defender’s threats of retaliation are credible.⁶¹ The ambiguous nature of Chinese escalatory actions and the potential for disagreements among partners over how to respond in the moment of crisis make establishing deterrence through the threat of economic countermeasures a significant challenge.

Participants in roundtables disagreed about the best signaling approach, with some arguing that clarity about redlines and consequences is essential, and others arguing that providing too much specificity could instead encourage aggressive behavior and focus China’s countersanctions and sanction-proofing work. Providing clarity on what Chinese actions would elicit a punitive response could encourage Beijing to take actions just below such thresholds.

Building out necessary tools. Our roundtables highlighted the fact that G7 countries joining a sanctioning coalition may need additional legal tools to carry out effective countermeasures on China. In the wake of enhanced export controls on Russia, for instance, the EU faced challenges restricting reexports of export-controlled products through third countries to Russia, as doing so would require additional legal authorities.⁶² And differences in UK, EU, and US regulations have complicated the efforts of multinational companies to wind down their operations in Russia.⁶³ For effective action and deterrence, such authorities would need to be shored up.

Scoping a cost mitigation strategy. Even limited economic countermeasures against China would have global economic spillovers. This means any sanctions program would likely need to be paired with measures to support industries at home as well as third countries affected by lost trade and investment with China. Sanctions triggering a devaluation of the renminbi would negatively affect countries dependent on commodity exports to China. A stronger dollar resulting from global investors seeking liquidity and safe assets in a crisis would put additional stress on countries with substantial dollar-denominated debt. G7 countries would need to manage the global spillovers of sanctions with additional dollar liquidity, loan extensions and forgiveness, and other tools to support the global economy in a period of economic stress.

Factoring in the market reaction. Any G7 economic statecraft response would have to contend with additional disruptions to global supply chains from Chinese aggression against Taiwan and the resulting market impacts. Russia’s 2022 invasion of Ukraine caused market gauges like the S&P 500 to fall by around 4 percent, and the initial market impact of a Taiwan crisis could be significantly larger due to the size and importance of the economies involved. US officials have estimated a disruption to the exports of Taiwan Semiconductor Manufacturing Company alone could cost the global economy between $600 billion to $1 trillion a year.⁶⁴ Roundtable participants stressed that G7 actions would have to avoid aggressively compounding the inevitable supply chain and market effects of a crisis. The initial shock could undermine domestic political support for sanctions that would incur additional economic costs.

Conclusions and recommendations 

Policymakers in G7 capitals are increasingly discussing Taiwan crisis scenarios, and starting to explore the range of options available to them in responding to Chinese actions against Taiwan, both beyond and below the level of invasion. While our work shows that maximalist countermeasures would be highly costly and therefore unlikely except in the most extreme circumstances, G7 countries may consider a set of more limited tools that target areas of asymmetric Chinese dependence on foreign technology and critical inputs. 

That options are available, and that G7 leaders are discussing them, does not mean that deploying them in an aligned fashion would be easy. Coordination on economic countermeasures will be critical to effective deterrence, but could be hard to achieve given the difficulty to define red lines in a conflict that is likely to be marked by ambiguity and uncertainty. Given these limitations, economic countermeasures can only be one part of a broader deterrence effort and toolbox that also includes diplomatic and military channels.

From our research, roundtables, and interviews, a set of recommendations emerged for policymakers considering the use of economic countermeasures in a Taiwan crisis:

• G7 partners and Taiwan should scale up private coordination and signaling. G7 discussions about the role of economic countermeasures in a Taiwan crisis are still in the early stages. Given the challenges involved in agreeing upon red lines and appropriate countermeasures, pragmatic discussions around contingencies must be a priority. This includes creating effective private channels of communication among G7 partners and key stakeholders on emerging trends, financial ties, and shared vulnerabilities. Meanwhile, G7 partners should privately message to China the extent they are willing to go in using economic tools to counter Chinese aggression toward Taiwan. Coordination with Taiwanese officials is also crucial.
• The G7 should coordinate beyond its membership. This report assumes that most or all of the current coalition that has imposed sanctions against Russia would align on measures in a Taiwan Strait crisis. Roundtables and consultations with like-minded capitals in the Asia-Pacific region have suggested this is a reasonable assumption. However, even more so than in the case of Russia, exchanges outside the G7, including the rest of the G20, will be necessary given the scale of economic disruption at stake.
• Economic asymmetries need to be better understood. Policymakers argued that the most likely economic countermeasures would focus on areas where China is asymmetrically dependent on foreign goods, technology, and finance. Further research is needed to identify these areas and the potential costs, vulnerabilities, and limitations of targeting them in a crisis.
• Take practical legal steps now to boost the credibility of G7 deterrence. Discussants noted that successful deterrence requires making clear that G7 nations are ready to act decisively in a crisis. This may require legal steps, including: shoring up of the EU’s framework for export controls; advance preparation of US executive orders specifying and granting sanctions authorities to the Office of Foreign Assets Control; preliminary analysis on the potential impact and spillovers of proposed packages; and the construction of communication channels among US government stakeholders such as the Federal Reserve, Commodity Futures Trading Commission, Securities and Exchange Commission, Office of the Comptroller of the Currency, Financial Crimes Enforcement Network, and appropriate bilateral, plurilateral, and multilateral counterparts. This may include preparing the legal and regulatory landscape across G7 jurisdictions to ensure appropriate authorities are in place to deter or respond to a crisis.
• Invest in other forms of deterrence. Economic countermeasures should be considered as part of a whole-of-government and multilateral strategy as they have costs and limitations that can make them less effective on their own. These tools will be more effective when paired with traditional tools of deterrence in both the military and diplomatic realms.
• Keep lines of communication open. Bilateral and plurilateral communication is the best tool to de-escalate in a crisis. Recent breakdowns in military-to-military communication channels between the United States and China are of serious concern given elevated tensions in the region. Maintaining open communication lines and regular exchanges with Chinese counterparts is a key element in any risk-mitigation strategy.
• Balance credible threats with credible assurances. Effective deterrence requires credible threats to be matched with credible assurances. The G7 should make clear to Beijing it has no desire to change the status quo in the Taiwan Strait. Efforts to maintain the status quo and shore up traditional diplomatic, military, and economic tools to ensure peace and stability in the Taiwan Strait should be the priority. 

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About the authors

Charlie Vest is an associate director on Rhodium Group’s corporate advisory team. He manages research and advisory work for Rhodium clients and contributes to the firm’s research on US economic policy toward China. Vest holds a master’s degree in Chinese economic and political affairs from UC San Diego and a bachelor’s degree in international affairs from Colorado State University. Prior to joining Rhodium, he worked in Beijing as research manager for the China Energy Storage Alliance, a clean energy trade association.

Agatha Kratz is a director at Rhodium Group. She heads Rhodium’s China corporate advisory team, as well as Rhodium’s research on European Union-China relations and China’s economic statecraft. She also contributes to Rhodium work on China’s global investment, industrial policy and technology aspirations. Kratz holds a Ph.D. from King’s College London, having studied China’s railway diplomacy. Her previous positions include associate policy fellow at the European Council on Foreign Relations and editor-in-chief of its quarterly journal China Analysis, assistant editor for Gavekal-Dragonomics’ China Economic Quarterly, and junior fellow at the Asia Centre in Paris.

Acknowledgements

This report was written by Charlie Vest and Agatha Kratz with support from Juliana Bouchaud in collaboration with the Atlantic Council GeoEconomics Center. The principal contributors from the Atlantic Council GeoEconomics Center were Josh Lipsky, Kimberly Donovan, Charles Lichfield, and Niels Graham.

The GeoEconomics Center and Rhodium Group wish to acknowledge a superb set of colleagues, fellow analysts, and current and former officials who shared their ideas and perspectives with us during the roundtables and helped us strengthen the study in review sessions and individual consultations. These individuals took the time, in their private capacity, to critique the analysis in draft form; offer suggestions, warnings, and advice; and help us to ensure that this report makes a meaningful contribution to public debate. Our gratitude goes to Dave Shullman, Jörn Fleck, Logan Wright, Daleep Singh, Jeremy Mark, Richard Aboulafia, Annie Froehlich, Julia Friedlander, David Barboza, Chris Skaluba, the Centre for Financial Crime and Security Studies at the Royal United Services Institute (RUSI), and Atlantik-Brücke.

This report is written and published in accordance with the Atlantic Council Policy on Intellectual Independence. The authors are solely responsible for its analysis and recommendations.

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The rise of sustainable investing in the private sector

Mobilizing private sector capital to boost sustainable development and ESG priorities makes sense given the numbers. With the top 500 asset managers holding $131.7 trillion in Assets Under Management (AUM) and the combined market capitalization of the top ten global companies reaching over $10 trillion in 2022, the private sector is well-positioned to contribute. Moreover, sustainable investing, mostly in renewable energy, was the fastest growing Foreign Direct Investment (FDI) theme in 2021—with 70% directed to developing countries. Up until 2021, financial markets have also experienced large shifts toward sustainable investing, with ESG fund issuance increasing by 53% to $2.7 trillion in 2021, while the green, social, sustainable and sustainability-linked bond market rose $1 trillion, grabbing 10% of the global debt market share. Sustainable companies also issued $48 billion in new equity, while sustainable lending reached close to $717 billion in borrowing. For example, in Indonesia, companies like Pertamina Geothermal Energy are looking to issue green bonds to help grow its business but also facilitate the transition to clean energy.  

Meanwhile, multinational corporations (MNCs) are integrating sustainability metrics into their supply chains, based on the Science Based Targets Initiative (SBTI). Financial and reputational risks from poor ESG practices can negatively impact a company’s future profits and resilience, which filter down to its local value chain. Many MNCs, including, Nestle, PepsiCo, and Unilever, are working towards preventing this by establishing and adhering to SBTI targets to increase sustainable practices within their global supply chains. Others, including Starbucks, are diverting funds to support climate and water projects in developing countries in an effort to conserve or replenish 50% of the water they deplete through their operations, including the agricultural supply chain. 

Together, ESG investing and SBTI targets should contribute significantly to sustainable development and lower the cost of hitting the SDGs. However, last year revealed several barriers that threaten that potential.

Roadblocks to investing in sustainable development

Sustainable finance faced challenges in 2022 as increased global regulatory scrutiny and divergent ESG standards led to a dip in ESG investing. Reuters reported that in 2022, sustainable investments reversed course for the first time in a decade, with sustainable bond sales decreasing by 30% and green bonds down 23%. Overall, ESG performance declined by nearly 9%, as international investment in ESG, especially climate change, declined.

Varying ESG rating standards, methodology, and data sources, that are often reclassifying sustainably labelled products, contributed to lower levels of ESG investing in 2022. Several ESG labelled securities were downgraded due to criteria conflicting with both major ratings agencies, while conflicting or overly prescriptive requirements led to a decline in support for ESG related shareholder proposals and the withdrawal of several financial industry members from regional ESG alliances. With over 600 ESG data providers, globally, it is not surprising a lack of consistency and standardization leave investors confused about the true risks and rewards from sustainable finance. Recent research reported that 20 of the 50 largest global asset managers assess their sustainable finance products using four or more ESG rating providers, while the other 30 use internal models for the same purpose. Underlying biases in ratings can often exclude developing countries struggling to attract sustainable finance due to inherent country-specific risks, like fossil fuel dependence, budget constraints, and high sovereign debt from external shocks, market access, and lack of technological innovation. However, some asset managers, like Abrdn, have developed in-house ESG ratings system based on data and metrics from external sources, like the World Bank and IMF, to consider unique factors when evaluating alignment with the SDGs for companies listed in their Emerging Markets Sustainable Development Corporate Bond Fund. 

Global regulations for ESG have also complicated cross-border sustainable investing, potentially leading to an increase in compliance costs and reduction in the number of eligible sustainable funds for firms.  Although evolving European, UK, and US frameworks regulating ESG have similar objectives, the approaches towards sustainable investing vary among the jurisdictional regulations and oversight bodies, especially around labelling and reporting. This disparity has also encroached on the Asia-Pacific financial industry, where many banks are starting to require local asset managers to comply with European ESG standards despite the existence of similar local regulations.  An analysis of ESG and sustainable-labelled funds identified that less than 4% meet the standards of all three jurisdictions, while 85% do not comply with any of them.  Additionally, different jurisdictional requirements and contradicting assessments of how to measure sustainable supply chains brought an additional level of uncertainty to MNC’s ESG initiatives in FDI. Companies are starting to realize they may not have fully assessed the impact of carbon emissions on its operations in other countries, specifically in the developing market.  Streamlining allowing for flexibility in the global ESG regulatory framework will be critical to ensuring sustainable investments increase and assist with countries in meeting their ESG goals. 

A way forward

To help meet the SDGs, the World Bank recently announced the creation of a roadmap that focused on three main objectives, including increasing private sector funding, improving country-level engagement and analysis, and establishing a global taxonomy for sustainable investment tools. UN Deputy Secretary-General Amina Mohammed recently warned that “the SDGs will fail without the private sector,” because private sector actors can “invest in the transitions necessary to accelerate development progress and get the SDGs back on track.” The private sector has not only the financial capacity, but also the commitment, to fuel sustainable investing, but faces barriers to keep up the momentum. The IMF and World Bank have an incredible opportunity to address the current ESG investing challenges. The World Bank roadmap is an important first step, but more will be needed to ensure globally consistent standards and data for ESG. The potential for greenwashing or indiscriminate exclusion of countries can be avoided by working with governments and ratings providers, and by improving country-level engagement to both align metrics and to integrate unique country risks in sustainable investing and supply chains. With many firms already leveraging IMF and World Bank data, creating a formal framework will encourage the expansion and scaling up of private sector ESG financing for regions in urgent need of funding.

Nisha Narayanan is a Non-Resident Senior Fellow with the GeoEconomics Center.

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Imran Khan, Pakistan’s former prime minister, has been on the warpath in the streets of Pakistan against the military-led establishment ever since he was voted out by parliament last year. Once seen as the military’s darling and reportedly assisted by the military and its intelligence agencies in the elections that brought him to power in 2018, he has now turned on the army and its chief. In an interview with the Atlantic Council this week, he also claimed that the former army chief General Qamar Javed Bajwa told him “frequently” that the army was not equipped or prepared for a war with India.

In the interview, conducted June 18, Khan confirmed that there was indeed an opening for peace with India—despite New Delhi’s rescinding of disputed Jammu and Kashmir’s semi-autonomous status in 2019—and the Pakistani army chief favored it. (Bajwa had previously revealed this plan to reporters.) Normalizing trade between the two nuclear-armed countries was reportedly one of the steps that was to be taken before Indian Prime Minister Narendra Modi could visit Pakistan.

Watch the full interview

However, despite successfully deescalating a military standoff in 2019, Khan couldn’t explain why he faltered on trade normalization with New Delhi after India changed its relationship with the disputed territory of Kashmir by removing its special status in the Indian union. Khan responded to India’s Kashmir move by closing the border for trade with India.

“I don’t remember the trade talks,” Khan said. “All I know is that there was supposed to be a quid pro quo. India was supposed to give some concession, give some sort of a roadmap to Kashmir, and I was going to then host Prime Minister Modi in Pakistan. But it never materialized.”

Bajwa’s plan, which included a ceasefire with Indian forces on the Line of Control in Kashmir, was a lost opportunity for establishing long-term peace with Pakistan’s archrival. “I tried everything, but I came across this brick wall,” Khan said. “And I realized it’s something to do with the RSS-BJP [the Modi-aligned ideological movement and political party] mentality where they’ve cashed in on hostility with Pakistan. That’s all.”

Transcript

Jun 20, 2023

Read Imran Khan’s full Atlantic Council interview on failed peace with India, Pakistan’s plight, and his own fate

By Atlantic Council

In an Atlantic Council conversation, former Pakistani Prime Minister Imran Khan shared details about a potential peace plan with India and discussed the future economic and political prospects for Pakistan.

Economy & Business Elections

Currently, Khan says he is facing nearly 160 legal cases, ranging from terrorism to corruption to conspiracy against the state—a roster that keeps him busy court-hopping to secure bail or relief. The seventy-year-old former cricket champion-turned-populist firebrand spends his weekdays commuting from city to city in protective gear to attend court hearings. Every evening, he addresses his followers on YouTube from his residence in Lahore, which just last month was surrounded by security forces.

Khan said he fears that he may be incarcerated over the next two weeks but admitted that he’s “prepared for everything,” including the prospect of being assassinated. (Khan was wounded in an assassination attempt last November and claims to have survived another plot in March.)

Reviewing his performance as premier, Khan admitted to political blunders during his tenure, including granting an extension of service to Bajwa, who Khan claims was responsible for engineering his ouster. He did not elaborate on the exact reasons for their break-up.

Khan confessed that he was dependent on the military’s clout to push his reforms through parliament because he had a weak coalition government with a razor-thin majority. But this admission—needing the military to remain in power—runs counter to his claim that he didn’t need or get the military’s support to achieve power in the 2018 general elections.

“If you want a reform program and to take on the big mafias, you cannot do it if you have a coalition with government, with a thin majority, you can’t do it,” Khan said. “So that is the mistake I made. And that’s why I became more and more dependent on the army chief, because he could get a budget passed because they have the clout. It’s exactly what’s happening right now. If the military withdraws support, this coalition would fall apart in days.”

Crucially, Khan also said he sacked the current army chief, General Asim Munir, from his previous position as the director-general of the Inter-Services Intelligence (ISI) because he “couldn’t work with him.” He did not explain why. Yet he went on to declare his willingness to talk to the all-powerful chief of army staff now—but not to his civilian counterparts—an unsustainable position in a multi-party parliamentary democracy that he wants to lead again. Claims by former members of Khan’s own party suggest that Khan sacked Munir because he had alleged that Khan’s wife was involved in corruption; Khan has denied these allegations.

While Khan defended his economic and foreign policy record and claimed that his Pakistan Tehreek-e-Insaf (PTI, or Movement for Justice) is the most popular party in the country’s history, he also claimed that ceding further space to Pakistan’s all-powerful military while he was in power was the right thing to do—until it wasn’t.

But as Pakistan faces the prospect of economic default, and his quest for an immediate election seems to be waning, Khan stands isolated. Over one hundred of his party leaders, including many senior deputies, have left the PTI, through what he claims is coercion by the military. Thousands of party workers face trials over the riots of May 9, when many Pakistanis took to the streets to attack government and military installations while protesting what Khan says was his provocative detention, designed to trigger mass outrage.

“The country is going into a black hole,” he said. “The only policy is to get rid of Imran Khan. That’s no policy. I mean, what is the future of Pakistan?”

Meanwhile, the military-backed regime continues its legal and information crackdown against sections of the press and public who dare to support Khan on mainstream and social media. Also, as the military claims that Khan and the PTI leadership tried to sow dissent in the rank and file of the all-powerful army—treason by definition and law—Khan has denied that he has any active links to senior military leadership.

None of Pakistan’s foreign friends and allies have issued any statements in favor of Khan. The US State Department said last week that it would refrain from comment as Khan is a “private citizen”—a categorization that he shrugged off without expressing regrets about his bashing of the United States following his ouster. Khan continued to blame a senior US official for, as Khan claims, making his removal as prime minister a condition for US assistance and goodwill—a claim that he watered down earlier this year while blaming Bajwa for poisoning the US view of Khan through Husain Haqqani, Pakistan’s former ambassador to Washington. (Haqqani has rejected Khan’s allegations as baseless and his attorney has issued a cease-and-desist notice to Khan, threatening legal action if Khan keeps on alleging Haqqani’s involvement in the former premier’s ouster. The US State Department has said that “there is not and there has never been a truth to” Khan’s claims that the United States was involved in removing him from power, adding that “we will not let propaganda, misinformation, and disinformation get in the way of any bilateral relationship, including our valued bilateral [partnership] with Pakistan.”)*

Further evidence of Khan’s shifting position is his party’s active support for lobbying efforts inside the United States, including letters from members of the US Congress admonishing the Pakistani military’s crackdown. Furthermore, not a single influential member of the fifty-seven-state Organization of Islamic Cooperation (OIC), a grouping that Khan claims to have galvanized, has come out in support of him.

Khan has responded by saying that as long as he has the people of Pakistan behind him, he doesn’t need foreign help. How he will do this now is unclear considering that many of his party’s senior leaders have deserted him after having been arrested and released by the authorities. Khan claims they were coerced and has named new, younger members to replace them. He believes strongly that he is still the most popular political leader in Pakistan and this will help him yet again in the elections that currently are expected to be held in October or November.

Khan said that popularity is the reason why his enemies have tried to kill him. “As long as that reason is there, they could try again,” he said. “So, in that sense, mentally, I mean I have overcome the fear of dying. I feel that I should be prepared for everything.”

Wajahat S. Khan is a nonresident senior fellow at the Atlantic Council’s South Asia Center and an Emmy-nominated journalist and author. He is the former bureau chief in Kabul and Islamabad for NBC News.

This article was updated to include the US State Department’s denials of Khan’s allegations about US involvement in his ouster.

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Recent progress between US and European Union (EU) negotiators to secure a more sustainable transatlantic data transfers regime has put a critical area of the transatlantic economy on a more secure footing. Yet the work for digital policymakers on both sides of the Atlantic is far from done.

Imminent completion of the US-EU Data Privacy Framework (DPF), to replace the invalidated Privacy Shield agreement, will open a new chapter in transatlantic data transfers. However, the DPF is expected to face an immediate challenge in the Court of Justice of the European Union from European privacy advocates whose past efforts doomed previous data transfer agreements.

Washington and Brussels should explore other forms of bilateral engagement on this long-troublesome set of issues. They could ask the Trade and Technology Council (TTC) to study commonalities in transatlantic approaches to accountability for personal data in the commercial context. A second avenue could be a stand-alone digital trade agreement, utilizing at least some elements of provisions on that subject developed during the failed Transatlantic Trade and Investment Partnership negotiations.

But fashioning sustainable data transfer architecture is a global – and not simply transatlantic – problem. The EU’s model of conditioning data flows on strict privacy protections has won widespread adherence around the world, but it has yielded a complex and tangled international reality. The US approach of open data flows has supporters internationally, but it has faltered in recent years as US administrations have abjured broad-scale trade agreements. The US failure to adopt comprehensive privacy legislation also makes it a global outlier.

This issue brief outlines and assesses multilateral efforts to achieve greater policy coherence across the global data transfer ecosystem. These include the World Trade Organization’s e-commerce negotiations, the Organization for Economic Co-operation and Development’s declaration on government access to personal data, Council of Europe Convention 108+, the G7 Data Free Flow with Trust initiative, and the Asia-Pacific Economic Cooperation Cross-Border Privacy Rules system.

The interplay and synergies among these mechanisms could in time encourage a durable, interoperable global data transfer architecture.

About the author

Fellow

Kenneth Propp

Nonresident Senior Fellow

Europe Center

European Union Digital Policy

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Markus Garlauskas: Measure Blinken’s success by the world’s reaction, not Beijing’s intransigence

John K. Culver: Blinken’s visit shows how China will be a 2024 campaign issue in the US

Matthew Kroenig: The relationship will continue to be defined by its more confrontational elements

Dexter Tiff Roberts: Xi had his own reasons to meet with Blinken

Emma Verges: Any US-China thaw is unlikely to extend to Taiwan

Thomas Cynkin: China is interested in stabilizing ties, but the US is the demandeur

Parker Novak: The developing world will welcome Blinken’s visit to Beijing

Measure Blinken’s success by the world’s reaction, not Beijing’s intransigence 

Before Blinken even departed for Beijing, Washington was setting the bar low for his meetings, with a top US diplomat warning not to expect any breakthroughs. There was little reason to expect, for example, that Beijing would accept one of Blinken’s top asks—resumption of bilateral military-to-military communications between the People’s Republic of China (PRC) and the United States. Beijing has regularly rebuffed this request, in line with its longstanding policy of skepticism of military-to-military hotlines, including frequently suspending them or refusing to answer them in the very moments of crisis for which they are designed.

After his meetings, Blinken publicly emphasized that he had made this ask repeatedly, which was emblematic of the pattern of the entire visit. Blinken made his case to Beijing’s officials on various issues, they remained unmoved, and then Blinken made his case again on these issues, this time to the global media. In the end, perhaps Xi and his officials were actually not the most important audience for this and other messages from Blinken.

Though a breakthrough on military-to-military communications or other important issues would have been ideal, building support for Washington’s position on the global stage would still represent a worthwhile outcome for Blinken’s visit. Establishing more clearly that the United States is seeking to responsibly manage disagreements with the PRC and to prevent a military conflict could help blunt criticism that Washington is recklessly fueling tensions. Similarly, Blinken made the point at the post-meeting press conference that a Taiwan crisis would have global implications. This was likely aimed at convincing US allies and partners that deterring and restraining PRC aggression against Taiwan is in their interest as well. Ultimately, even if Beijing’s position remains unchanged, if Blinken’s efforts resonate in friendly capitals, then it could still be considered a great success.

—Markus Garlauskas is the director of the Indo-Pacific Security Initiative of the Scowcroft Center for Strategy and Security and a former senior US government official with experience as an intelligence officer and strategist.

Blinken’s visit shows how China will be a 2024 campaign issue in the US

The most notable aspect of Blinken’s visit to Beijing is that it happened at all after being postponed in early February as a Chinese reconnaissance balloon drifted across a large portion of the United States. The Biden administration, reflecting the domestic competition for politicians to out-hardline one another on China policy, set low public expectations for the visit. So the result mildly exceeded the minimum threshold—he was hosted by his counterpart, Chinese Foreign Minister Qin Gang; held meetings with Qin’s boss, Director of the Communist Party Foreign Affairs Commission Wang Yi; and was granted an audience with Xi. 

Substantively, Blinken’s “successful” visit and mutual pledges that the senior officials from both countries will continue talking sets the stage—but doesn’t guarantee—that US President Joe Biden could meet Xi in San Francisco during the Asia-Pacific Economic Cooperation Leaders’ Summit in November. No Chinese president has failed to attend the annual summit since the first in 1993 (the 2020 and 2021 summits were virtual due to the global pandemic). In the meantime, the door is open for cabinet-level visits, perhaps including US Treasury Secretary Janet Yellen, US Commerce Secretary Gina Raimondo, or US Trade Representative Katherine Tai. Direct senior military engagement appears to remain off the table.

The other notable aspect of Blinken’s visit was the level of anti-China rhetoric unleashed in the United States over the mere prospect that it would occur. Various US media, citing unnamed sources, revealed a Chinese intelligence facility in Cuba, although apparently it dates back years. The secretary’s cautious visit underscores that China will be a campaign issue in the 2024 presidential race, and while US allies may welcome signs that Washington and Beijing are trying to build a floor under what remains of the relationship, there is little upside politically for progress.

—John K. Culver is a nonresident senior fellow with the Atlantic Council’s Global China Hub and former US national intelligence officer for East Asia.

The relationship will continue to be defined by its more confrontational elements

Blinken’s visit to Beijing shows that the Biden administration wants to pursue a balanced strategy toward China. On one hand, there is a need to compete and protect US interests from a wide range of threats posed by China. On the other hand, Washington wants to pursue an engagement track to maintain clear channels of communication, to prevent competition from veering into conflict, and to cooperate on shared global challenges.

Blinken’s visit revealed that maintaining an effective engagement track will remain challenging. The trip did not achieve breakthroughs on any of the major desired deliverables, such as the establishment of a military-to-military hotline. And the readout of the meetings suggest that the two sides mostly exchanged rehearsed talking points on contentious issues, such as Taiwan.

This visit and planned follow-up trips from other Biden administration officials in the coming weeks still serve a useful purpose, but they will not be able to meaningfully shift the trajectory of the US-China relationship, which will continue to be defined by its more confrontational elements.

—Matthew Kroenig is vice president and senior director of the Atlantic Council’s Scowcroft Center for Strategy and Security and the Council’s Director of Studies.

Xi had his own reasons to meet with Blinken

As a backdrop to the US secretary of state’s visit to China, including Xi’s decision to sit down with Blinken on Monday, it’s important to consider the role played by the dismal state of the Chinese economy. And it is in serious bad straits, with the poor showing by retail sales and industrial production in May providing more evidence. Already, the People’s Bank of China has cut interest rates and Beijing is preparing big stimulus spending. At the same time, it needs job-providing, tax-paying, innovation- and technology-producing private and foreign investors to keep investing, even as the recent crackdown on some foreign firms has spooked them. 

Since at least March, Beijing’s official message has been that China is open to the world and that includes American companies. Just before giving an audience to Blinken, China’s president and party general secretary had already met with Microsoft co-founder Bill Gates, where he touted the importance of the friendship between the US and Chinese peoples. If Xi had stiffed Blinken (Xi met with earlier US secretaries of state) that would have sent the opposite message about China’s openness—including to business. As I anticipated before the visit, by meeting with Blinken, Beijing got to look benevolent and still have Washington in the supplicant seat.

Talking is the first step and key to avoid ugly mishaps flaring into outright conflict, as might have happened if the Chinese fighter jet that recently buzzed a US spy plane had instead collided with it. But even as some high-level contacts have now been reestablished, Beijing rebuffed Blinken on setting up a military crisis hotline. And senior discussions between the two sides, of course, doesn’t equal resolving the many deep disagreements, including over the future of Taiwan, semiconductor chips, and human rights. Nor does it erase the deep suspicion each country’s leadership feels towards the other.

—Dexter Tiff Roberts is a nonresident senior fellow with the Indo-Pacific Security Initiative and Global China Hub.

Any US-China thaw is unlikely to extend to Taiwan

During Blinken’s trip to China, his talks with Xi, Wang, and Qin highlighted sensitivities about external interference in perceived internal affairs. This becomes all the more complicated in the context of Taiwan, which Beijing views as a domestic matter implicating not only Chinese geopolitics but also nationalism. The United States, on the other hand, understands it to be of international concern, particularly in the name of promoting a free and open world and upholding an international rules-based order.  

As Beijing wishes to showcase its handling of the matter, it seems timely that Blinken’s visit coincided with the Fifteenth Straits Forum, which kicked off in Xiamen the day prior to Blinken’s arrival in Beijing. Xi even sent a congratulatory letter to the forum. Meanwhile, in talks with Blinken, Qin identified the Taiwan issue as “the most pronounced risk in the China-US relationship.” It comes as no surprise that Beijing worries about US interference in Taiwan. 

Blinken’s visit to Beijing laid the groundwork for the thawing of US-China relations, in a return to the consensus that Biden and Xi reached in Bali on maintaining open lines of communication. While communication cannot get rid of fundamental disagreements on certain issues, it can help overcome misperceptions which otherwise threaten to antagonize and lead to divisive actions. Perhaps these talks might inform a recalibration of greater engagement within the scope of a US-China strategy. 

—Emma Verges is a program assistant with the Indo-Pacific Security Initiative. 

China is interested in stabilizing ties, but the US is the demandeur

Blinken’s China visit ostensibly helped restore a more amicable tenor in bilateral communications, if not actual stability, to the Sino-US relationship. Before the visit, China’s foreign minister had a tense exchange with Blinken by telephone, in which the lead Chinese diplomat pinned the blame for the dismal state of bilateral relations squarely on the United States. This may have been a way for him to get the tough talk on the record before the actual visit, in order to clear the way for more workmanlike discussions in Beijing. A promising first sign was when Qin met Blinken outside their meeting hall, rather than follow the usual practice of waiting for him inside—a key gesture in a political system that imbues such gestures with deep symbolism. Blinken also met with Qin’s superior in the Chinese leadership, the director of the Chinese Communist Party Central Foreign Affairs Office, for a similar workmanlike exchange along familiar lines.

The Chinese are masters at dangling the possibility of senior leadership meetings as incentives for “good behavior” during bilateral discussions, and this was no exception, as Blinken’s meeting with Xi was only confirmed about an hour or so before it took place. Overall, the symbolism was clear: China is interested in stabilizing ties with the United States, but the United States is the demandeur. In similar form, while Blinken pressed repeatedly for restoring military-to-military contacts, the Chinese resisted on the convenient grounds that Defense Minister Li Shangfu has been sanctioned by the United States (in 2018, for Russia’s arms sales to China). The United States repeatedly raising the issue has no doubt convinced Beijing that it can hold out for a concession, or at least a significant warming in bilateral relations, before acceding to the US request. 

Blinken’s visit may have helped “stabilize” the relationship, but what’s more important right now is how Washington is negotiating with itself on how hard to push China in advancing US national interests. An outbound investment executive order has been on hold for months, a possible ban or limit on TikTok remains up in the air, and the Commerce Department continues to allow some export licenses issued to US suppliers for sales to blacklisted Huawei. The wisdom of these and other measures should be considered on their own merits. It is laudable for Washington to work on improving communication with Beijing; after all, Washington and Moscow managed to maintain channels through the height of the Cold War. That said, it is important that the desire to improve ties not lead Washington to trade something for nothing, or to be deterred from taking basic steps to protect US national interests vis-à-vis China.

—Thomas Cynkin is a nonresident senior fellow in the Indo-Pacific Security Initiative and the practice lead, Japan and Northeast Asia, of the Transnational Strategy Group.

The developing world will welcome Blinken’s visit to Beijing

Broadly speaking, developing countries are averse to picking sides in the accelerating geopolitical competition between the United States and China. They don’t see the choice in front of them as a binary one, and they want to avoid becoming pieces on the proverbial geopolitical chessboard that are pushed around by larger powers. Instead, they seek to maintain positive relationships with the two behemoths—a balancing act, for sure, but a manageable one from their point of view.

Collectively, these countries have trillions of dollars in development needs, and no single source can meet the necessary scale. Their leaders know that they stand to benefit as the world’s two most powerful nations lavish them with attention and resources, each aiming to gain an upper hand over the other in their global contest for influence. Indonesia, for example, has welcomed support from several countries as it tries to grow its economy and create jobs for the 1.7 million young people entering its workforce every year.

In recent months, the direction of US-China relations has caused alarm bells to ring across the developing world. Increasing tension around Taiwan, for example, is raising concerns in Southeast Asian capitals that their region is being put on a path toward armed conflict that could spell economic doom for them. It’s why, at the Shangri-La Dialogue earlier this month, a parade of Southeast Asian officials called for communication and diplomacy between the United States and China.

With this perspective in mind, the developing world will welcome Blinken’s visit to China. Leaders in developing countries will see it as a credible effort to sensibly manage a relationship that impacts the entire globe and welcome any respite in tension it provides, even if only temporary. It won’t escape their attention that China refused restoration of military-to-military communications, despite the United States’ repeated efforts to do so—bolstering the case that, between the two, the United States is the more responsible actor.

—Parker Novak is a nonresident fellow with the Global China Hub and Indo-Pacific Security Initiative.

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One of the most glaring examples of governments’ poor performance is the egregiously low number of victims governments identify—a problem I routinely faced over the last two decades working on this issue as a federal prosecutor, nongovernmental organization leader, and US ambassador. The United Nations (UN) Protocol to Combat Trafficking in Persons is one of the most widely subscribed instruments of international law, under which governments commit to identifying the people whom traffickers exploit. According to the latest TIP report, however, governments around the world reported identifying only 115,324 human trafficking victims in the last year. This number comes from data governments provide to the US State Department about the number of victims whom law enforcement or nongovernmental organizations identify and who receive protection services. Although this number is higher than last year’s number, it is slightly lower than the high of 118,932 victims identified in 2019.

Meanwhile, the estimated number of human trafficking victims is increasing. Compare the number of victims that governments reported identifying with the UN estimate based on surveys and data modeling. The UN estimates that traffickers are compelling 27.6 million people into forced labor or sex trafficking.

If 27.6 million victims exist and governments are only identifying 115,324 victims, then the world only identifies less than half of 1 percent of the estimated victims (0.4 percent). This means that 99.6 percent of victims remain trapped by their traffickers, unable to decide where they work or who touches their bodies.

Sex trafficking dominates the discussion of governments’ lackluster victim identification efforts. Forced labor has received less attention, but in this year’s TIP report governments identified a higher number of forced labor victims than in any prior year: 24,340. This improvement, along with governments prosecuting the largest number of labor traffickers, is encouraging. However, when the victim identification statistics are isolated for just forced labor, governments are only identifying 0.1 percent of the total estimated forced labor victims.

Victim identification is made even more difficult due to state-sanctioned human trafficking. The TIP report found that in eleven countries, the governments themselves trafficked people. These offenders include Cuba, North Korea, Eritrea, and China, where millions of Uyghurs are forced to work in Xinjiang reeducation camps. It is especially odious when the government charged with identifying victims is, in fact, the perpetrator.

Without effective victim identification, governments cannot hold traffickers accountable, and people of goodwill cannot offer tailored, trauma-informed services to trafficking survivors. Society cannot address what it cannot identify. Victim identification is the prerequisite to successful prosecution and prevention of this crime. Yet, governments’ rate of victim identification is appallingly low.

It is time for governments to match their rhetoric with their resources and dramatically increase funding for prevention efforts, investigators, prosecutors, service providers, and trauma-informed care. Specialized investigative units should no longer be paper tigers. Survivor leadership should no longer be an ornamental add-on. Holding companies and individuals accountable for committing human trafficking crimes should no longer be elective. Human trafficking victims should no longer be prosecuted for the unlawful acts their traffickers compel them to commit.

Improvement and success must begin with increased victim identification. There are several practical steps that concerned citizens should ask their governments to take:

• Mandate that educators and health care providers become mandatory reporters.
• Invest in specialized investigative units and prosecutors focused on stopping traffickers. 
• Create pathways for survivors to rid themselves of criminal records caused by their traffickers. 
• Ensure companies are not using forced laborers to produce solar panels, electric vehicles, apparel, tomatoes, and batteries. 
• Fund trauma-informed services for survivors. 
• Elevate and center survivors in the fight to put traffickers out of business.

Traffickers thrive in an ecosystem where mere intentions and underfunded public justice systems are their only challenges. It is time for leaders to arise and become champions for freedom. Millions of victims count on governments, civil society, and faith communities to do more than merely care about their plight, designate awareness days, and think good thoughts. Survivors need the world to accelerate its strategic investment and meaningful action to increase victim identification.

John Cotton Richmond is a nonresident senior fellow at the Atlantic Council, chief impact officer at Atlas Free, president of the Libertas Council, and former US ambassador-at-large to monitor and combat trafficking in persons.

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The White House and Congress currently disagree over the type and number of nuclear weapons required to deter nuclear-armed adversaries in the coming decade, including Russia and China, but also North Korea and potentially Iran. As long as this disagreement persists, it casts doubt on the viability of whatever the administration might agree to in bilateral talks—in particular, whether any new treaty could be ratified or survive a change in administrations. However, a bargain is available that bridges these differences, and it would strengthen the president’s hand in arms control negotiations, if the administration and Congress seize the opportunity.

2010 plans do not address 2030 threats

In his June 2 speech at the Arms Control Association annual forum, Sullivan called attention to the growing threats posed by China, Russia, North Korea, and Iran. In doing so, he reaffirmed the warnings in the Biden administration’s National Defense Strategy and Nuclear Posture Review that as it approaches 2030, “the United States will need to deter two near-peer nuclear powers for the first time in its history.” To address this emerging challenge, the White House is continuing the nuclear modernization program begun by the Obama administration and reaffirmed by the Trump administration, though the Biden administration has canceled the development and deployment of a nuclear sea-launched cruise missile (SLCM-N) proposed in the 2019 Nuclear Posture Review.

These 2010 modernization plans assumed a reset with Russia. And they did not envision the rapid expansion of Chinese conventional and nuclear capabilities or the “no limits” partnership between an aggressive Moscow and Beijing bent on upsetting the international world order. This begs the question, then, whether the current nuclear modernization program—which amounts to a one-for-one replacement of nuclear force levels established in the 2010 New START—will be sufficient against two nuclear great powers.

In March, Senate Armed Services Committee Chairman Jack Reed (D-RI) asked General Anthony Cotton, head of US Strategic Command, how the US nuclear command is adapting to this “new trilateral nuclear competition.” Cotton replied that the United States is “in an absolutely good place today with our [nuclear] systems… but the basis of which we did our modernization efforts was on a 2010 threat.”

The divide over more nuclear weapons

The threats have grown manifestly worse since 2010, but the administration has been ambivalent about them. According to Sullivan in his recent speech, “the United States does not need to increase our nuclear forces to outnumber the combined total of our competitors in order to successfully deter them.” Sullivan added that “effective deterrence means that we have a ‘better’ approach—not a ‘more’ approach.” This position is at odds with Republican leaders in the House and Senate armed services committees, who have advocated “higher numbers and new capabilities” for nuclear weapons. 

There are practical limits to how quickly the United States could expand its nuclear capabilities to address the expansion of China’s nuclear forces. One option by the time New START expires in 2026 is to restore nuclear warheads to existing intercontinental ballistic missiles (ICBMs) and submarine-launched ballistic missiles (SLBMs) that were removed to accommodate the lower New START force limits (a process called “uploading”). Additional nuclear bombs and cruise missiles could be loaded onto heavy bombers, and bombers previously converted to conventional weapons use only can be made ready for nuclear operations. 

Importantly, Sullivan said in his speech that “the type of limits the United States can agree to after [New START] expires will of course be impacted by the size and scale of China’s nuclear build-up.” The administration will require a sense of what additional nuclear forces may be needed beyond New START, both to ensure any negotiated limits provide the United States with headroom to deploy sufficient forces in the future, and because adjustments to US nuclear posture will likely take years to implement. 

It is entirely conceivable that Russia and the United States could agree to new (modestly larger) nuclear force limits that consider US requirements to address China’s expanding nuclear capabilities and limit and reduce Russia’s regional nuclear weapons and new novel long-range systems that are not covered under New START. Such an approach might maintain limits (albeit somewhat higher than the current 1,550 warhead limit in New START) on all US and Russian nuclear forces while allowing the United States to address the problem of two nuclear peers.

The bargain the White House and Congress could strike

Sullivan was correct when he said that “responsibly enhancing our deterrent capabilities allows us to negotiate arms control from a position of strength and confidence.” But if “responsibly” implies a set policy of no new US nuclear capabilities or no expansion of US strategic nuclear forces, then Russia has no reason to come to the negotiating table. A big incentive for Moscow to negotiate is if it fears the United States will build up its own nuclear arsenal. Just as important, an arms control approach that does not include some augmented nuclear capabilities will be a non-starter for Republicans and some Democrats on Capitol Hill.

A bargain is required. The Biden administration could, for example, agree to develop the SLCM-N and prepare for a nuclear upload onto existing ICBMs and SLBMs. In exchange, congressional Republicans could lend public support to the administration’s efforts, hopefully fruitful but perhaps not, to secure a post–New START follow-on arms control framework or agreement. In such a deal, the arms control community would see the value in continued constraints on arms competition, while the deterrence community would welcome augmented nuclear capabilities to answer the growth in Chinese nuclear forces. Russia also would have an interest in limiting the potential expansion of US nuclear forces. This approach leaves out China for the time being, given its unwillingness to engage in a dialogue; but any future limits on Russian and US forces will have to take into account the likely expansion of China’s nuclear arsenal. 

During the question-and-answer period following his speech, Sullivan spoke about the bipartisan US Senate support of the 2010 New START. He failed to mention, however, that the Obama administration’s commitment—insisted upon by Republican senators as part of the deal for New START—to modernize each leg of the nuclear triad enabled that consensus. It is worth demonstrating once more that nuclear deterrence and arms control go hand in hand.

Robert Soofer is a senior fellow in the Forward Defense program in the Atlantic Council’s Scowcroft Center for Strategy and Security, where he leads its Nuclear Strategy Project. He formerly served as US deputy assistant secretary of defense for nuclear and missile defense policy and as a professional staff member on the Senate Armed Services Committee.

The post Before embarking on arms control talks, Biden needs a nuclear deal with Congress appeared first on Atlantic Council.

The criticism stems from the kingdom’s connection to the 9/11 attacks, its track record on human rights, and the high-profile killing of US-based journalist Jamal Khashoggi in 2018, very likely at the direction of Saudi Crown Prince Mohammed bin Salman. Some critics have started to search for potential regulatory tools to block the deal. Merger review, both in the United States and Europe, seems the most likely path. However, there are competing views on whether courts would be persuaded by anti-trust arguments given how highly concentrated professional golf already is and how most US professional sports leagues operate as de facto monopolies.

Several members of Congress, including Senator Ron Wyden (D-OR), Senator Mitt Romney (R-UT), and Congresswoman Maxine Waters (D-CA), have issued public calls for the Committee on Foreign Investment in the United States (CFIUS) to review the deal. CFIUS is an interagency committee that evaluates the national security implications of foreign acquisitions of US businesses. If CFIUS finds a national security risk, it can negotiate mitigation agreements with transaction parties to restructure deals in ways that sufficiently reduce those risks. It can also recommend that the US president prohibit the transaction. CFIUS has traditionally been restrained in its approach; only seven transactions have been prohibited through the CFIUS process since 1975, though a good deal more were voluntarily abandoned by parties after realizing that CFIUS found a national security risk that it did not deem mitigable. 

So is CFIUS the answer to the prayers of those who wish to stop the PGA Tour/LIV Golf merger? Probably not. To understand why CFIUS is likely not able to stop this deal, even if US lawmakers may view the deal as distasteful, it’s necessary to understand CFIUS’s jurisdiction—which it likely has over this deal—and the investment prohibition authorities that CFIUS provides the US president.

1. The committee is wary of overextending its authority

First, CFIUS has jurisdiction over any foreign acquisition of a controlling stake in a US business, regardless of the US business activity. It also has the ability to review non-controlling transactions that confer special rights—such as access to non-public technical information or board observer status—if foreign entities invest in critical technology, critical infrastructure, or sensitive personal data of US businesses. The cross-sectoral nature of CFIUS jurisdiction contrasts with the investment screening authorities of many other advanced economies, which often only allow review of transactions in specified sectors, such as critical infrastructure or defense materials.

Thus, as long as the merger deal—which apparently exists only conceptually at the moment—directly or indirectly confers a controlling stake of PGA Tour to PIF, CFIUS will be able to review the transaction. CFIUS likely would also be able to review even a non-controlling stake if the PGA Tour meets the definition of a sensitive personal data business. CFIUS operates mostly through a voluntary notification process, but it can also pull a concerning transaction into its orbit through a “non-notified” review.

Just because CFIUS has jurisdiction to review does not mean that it will block the transaction. CFIUS is designed to be a tool of last resort and to only intervene when national security is threatened. To act, the committee would have to find a risk arising from the transaction that threatened to impair US national security. While national security is not defined in the statute, the committee process is designed to be fact-based, deliberative, and restrained. Highly attenuated risk scenarios are unlikely to persuade the committee to recommend action. 

Moreover, the committee is conscientious not to overextend its authority in order to retain process legitimacy, as it operates largely through the voluntary cooperation of transacting parties. It is careful to stay within its statutory authority to prevent legal risks that could narrow its ability to act in the future. And, as the United States is actively encouraging partners and allies to enact and strengthen their own investment screening mechanisms, it does not want to give the impression that broad use of such power is legitimate, for fear that doing so could lead to other countries harming US businesses operating abroad.

2. Data collection risks can be mitigated

The CFIUS process revolves around determining whether a transaction creates a national security risk, and if so, whether that risk can be adequately mitigated through a legal agreement with the parties. CFIUS evaluates the vulnerabilities to national security that a US business generates and the likelihood that the foreign entity will exploit those vulnerabilities or make it easier for a third party to do so. 

One potential security vulnerability is the PGA Tour’s collection of fans’ data on its fans through ticket sales and its smartphone app. Since the 2018 legislative update to CFIUS, the committee has been increasingly concerned about how acquiring a US business could aid a threat actor in the collection, use, and sharing of sensitive personal data. Data collected on smartphone apps can be particularly concerning if the app allows for real-time geolocation of individuals and if the app’s data collection does not adequately protect vulnerable populations. However, these concerns can easily be mitigated by preventing PIF or its agents from having access to such data. It is highly unlikely that the business rationale for the merger depends on PIF or LIV Golf being able to access these data, so it is likely a mitigation term to which the parties would agree.

3. Real estate concerns can be mitigated, too

Another issue is the roughly thirty golf courses the PGA Tour owns and operates through its Tournament Players Club (TPC) network. Some of these golf courses are located close to sensitive US government sites such as military bases. CFIUS views such “co-location” as risky because it can create opportunities for surveillance. In 2012, for example, US President Barack Obama prohibited a Chinese investment in an Oregon wind farm over concerns that Beijing could use access to wind turbines to surveil a particularly sensitive military site close by. Again, however, the deal could easily be structured in a way in which PIF did not have access rights to these courses or the ability to choose venders to operate or maintain these locations.

4. Soft power is a soft argument

Some have argued that CFIUS should consider the “soft power” implications of golf tour ownership from which the Saudis could benefit. However, it is unlikely that CFIUS will be willing to make strong claims about national security risks on this basis. Nor should it. Soft power by its nature is diffuse. This means that the consequence of soft power on US national security is difficult to clearly express. A poorly articulated consequence reduces the ability of the committee to act. After all, the committee must find a “risk to national security arising from the transaction” to mitigate or recommend a presidential prohibition. Vague claims to “sportswashing” and generally burnishing a regime’s brand do not meet this threshold. If CFIUS could block transactions on bad vibes alone, then it could pretty much block anything. And that would undermine the argument that CFIUS is a fact-based, non-partisan committee that narrowly and soberly assesses national security risk. This would have substantial negative consequence for the legitimacy of the process in the eyes of business, the public, and allies and partners.

In sum, there are many reasons to be angered by, or at least uncomfortable with, the PGA Tour/LIV Golf merger. Anti-trust may represent a legitimate hurdle to its execution. But CFIUS is not a trump card to prohibit every problematic foreign transaction, and it certainly is not an appropriate tool for blocking this particular merger given what we know about it. Rule of law means the law is not just a tool but also a constraint. And here, the rule of law will likely bind the United States against using CFIUS to block a transaction some lawmakers are wary of but does not rise to the level of a clear national security risk. 

Sarah Bauerle Danzman is a nonresident senior fellow with the GeoEconomics Center’s Economic Statecraft Initiative. She is also an associate professor of international studies at Indiana University Bloomington where she specializes in the political economy of international investment and finance.

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On June, two members of the Atlantic Council’s Commission on Defense Innovation Adoption, former US Undersecretary of Defense for Policy Michèle Flournoy and Palantir Senior Vice President Wendy Anderson, co-wrote an article in Breaking Defense discussing adopting and leveraging innovative software across the Department of Defense. In their op-ed, Flournoy and Anderson highlighted one of the recommendations from the Commission’s interim report for Congress to authorize funding for scaling operationally relevant and mature commercial technology demonstrated in major exercises, such as Rim of the Pacific.

Forward Defense, housed within the Scowcroft Center for Strategy and Security, generates ideas and connects stakeholders in the defense ecosystem to promote an enduring military advantage for the United States, its allies, and partners. Our work identifies the defense strategies, capabilities, and resources the United States needs to deter and, if necessary, prevail in future conflict.

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Stoltenberg has announced he will conclude his secretary general tenure as planned at the end of September. He has served since October 2014*, just a few months after Russia invaded Ukraine’s eastern Donbas region and Crimea. Since then, Stoltenberg has shown himself to be NATO’s most impactful wartime secretary general. It would surprise no one should historians ultimately deem him the strongest, most capable secretary general in Alliance history. He has kept NATO out of direct combat with Russia while boldly marshaling allied support for Ukraine with mountains of nonlethal matériel and the promise of political backing for “as long as it takes.” (NATO members themselves provide Ukraine lethal warfighting matériel outside of NATO structures, as the core of the fifty-nation Ukraine Defense Contact Group.)

Should NATO members accept Stoltenberg’s decision to step down? Or should he be pressed to stay on as NATO navigates the fierce fighting and political choices ahead; until the path of the war in Ukraine is better known, perhaps in early 2024? Alliance members may decide as soon as their July 11-12 NATO Summit in Vilnius.

Issue Brief

Apr 11, 2023

Defining success for NATO’s Vilnius summit: A primer

By Charles Barry and Christopher Skaluba

A successful NATO summit in July requires significant progress on a host of NATO’s political and military priorities, especially those enumerated at Madrid.

Europe & Eurasia National Security

There is a good case for Stoltenberg staying longer. He has been remarkably successful at countering Russian propaganda and nuclear threats and in parrying the internal disruptions of highly contentious members, including by former US President Donald Trump and current Turkish President Recep Tayyip Erdoğan and Hungarian Prime Minister Viktor Orbán. He has also skillfully guided Alliance responses to China’s growing presence and influence in Europe. Above all, Stoltenberg has been the stalwart pillar of Alliance cohesion. As the war in Ukraine intensifies this summer and into the fall, and especially should Russia up the ante on nuclear threats, NATO would do well to have Stoltenberg’s seasoned leadership.

Allies might feel an urgency to select Stoltenberg’s replacement at the upcoming Vilnius summit, but they are not required to at that time. That decision could be made later in 2023 or early 2024, still in time for a new secretary general to be installed at the seventy-fifth anniversary summit in Washington DC. If Stoltenberg does indeed step down this September, he will have already completed nearly ten years of service, making him the second-longest serving NATO secretary general after Joseph Luns, who served from 1971 to 1984. Stoltenberg has given NATO a full measure of service. Yet changing captains in the heat of battle should give some NATO capitals pause.

Key calculations in choosing Stoltenberg’s eventual successor

Whether in September or later, when Stoltenberg does depart and a new secretary general is needed, whom should the allies select?

Some members chafe at the fact that twenty years after new members from Eastern Europe joined the Alliance, no candidate from those seven countries has been selected as secretary general. Other members, including the United States, have shown notable interest in seeing women chosen for high leadership positions. Women leaders have been elected as heads of state for many NATO members, as well as for international organizations such as the European Commission (Ursula Von der Leyen), the International Monetary Fund and European Central Bank (Christine Lagarde), the World Trade Organization (Ngozi Okonjo-Iweala), and the United Nations General Assembly (Maria Fernanda Espinosa Garcés).

To be sure, NATO is past due to join the growing club of glass ceiling breakers. That achievement must be weighed in the context of giving both any prospective candidate and the Alliance the best conditions for success. The conditions facing the next secretary general could not be more challenging. There will be no quiet time for a transition before assertive transatlantic leadership and momentous decisions will be required.

Most immediately, it is critical that NATO solidarity and momentum not slacken in backing Ukraine’s military success over Russia. By the end of this year, the war in Ukraine will likely have moved into a new stage, either—and hopefully—toward a full Ukrainian victory or into a steady stalemate. Until then, and as Vilnius approaches, the war and other major issues—Sweden’s NATO membership, defense spending levels, confronting China’s challenges—will demand unrelenting leadership and diplomacy. The months ahead are not optimum for farewelling NATO’s most capable leader—or for welcoming a new one. Proceed with caution!

Correction: An earlier version of this piece incorrectly stated Stoltenberg began his role as secretary general in March 2014. He was appointed as secretary general designate in March 2014, but formally began the role in October 2014.

Charles Barry is a visiting research fellow at the Institute for National Strategic Studies at the National Defense University. Since 1990, he has assisted senior US and NATO officials in developing three NATO Strategic Concepts and preparing for fourteen NATO summits. These views are his own and do not reflect those of the US Department of Defense or the National Defense University.

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On June 12, Forward Defense Senior Fellow Dr. Robert Soofer’s recent nuclear arms control article was republished in RealClearDefense.

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Robert Soofer

Senior Fellow

Forward Defense

Arms Control Defense Policy

Forward Defense, housed within the Scowcroft Center for Strategy and Security, generates ideas and connects stakeholders in the defense ecosystem to promote an enduring military advantage for the United States, its allies, and partners. Our work identifies the defense strategies, capabilities, and resources the United States needs to deter and, if necessary, prevail in future conflict.

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On Wednesday, June 5, 2023, Carla Norrlöf, a nonresident senior fellow at the Atlantic Council’s GeoEconomics Center, testified to the US House Committee on Financial Services Subcommittee on Financial Institutions and Monetary Policy. Below are her prepared remarks for the committee on preserving the US dollar’s status as a global reserve currency. Some charts and figures in the original prepared testimony are not included in this version.

Dear Committee Members, thank you Chairman Luetkemeyer and Ranking Member Beaty for inviting me to testify on the important topic of dollar dominance and the preservation of the dollar’s status as a global reserve currency. I am honored. Despite numerous challenges, dollar dominance has persisted for nearly eighty years. Why does the dollar continue to play such a prominent role, is the dollar likely to reign supreme over the long term, and what are the most important threats on the horizon?

The extent of US dollar dominance and its preservation has become a principal theater for the great power struggle between the United States, China, and Russia—placing the future of liberal international order in the balance. The dollar is the only truly global currency in the world, and is widely used for transactions, pricing, settlement, and investment by governments and private actors outside the United States. These roles offer the United States economic, political, and social privileges. Economically, Americans benefit from the ease and convenience of transacting in dollars, from seigniorage, monetary flexibility, and safe-haven benefits in times crisis. Politically, the dollar offers the United States a non-military instrument of coercion with which to police international order. Socially, the United States gains status and prestige. Preserving the dollar’s status as the global currency is therefore in the United States’ interest, and potentially in other countries’ interest.

Dollar dominance refers to the disproportionate use of dollars in the world economy, a condition which has prevailed during the entire postwar era. The absolute dominance of the dollar is unlikely to change in decades to come, though the dollar’s relative dominance has receded from peak levels. Even though the dollar remains dominant, a relative weakening of the dollar’s status is considered a harbinger of the long-term power shift to the East, hastening the onset of a multipolar order in which the United States is less capable and less influential.

Assessing dollar dominance

The precise meaning of dollar dominance in this regard remains unsettled. How strong must the dollar be relative to other currencies used for international purposes for the international currency system to be characterized by dollar dominance? This question is rarely tackled head on. The lack of a common focal point makes it very difficult to determine whether dollar dominance is truly threatened and how to discern a multipolar currency system if, and when, one comes to pass. Using metrics over the various functions of an international currency, for example the reserve currency function, it is possible quantify dollar dominance according to established criteria—for instance polarity or systemic concentration. Polarity is a term traditionally used by international-relations scholars to assess the international balance of power based on military might. But the concept is sometimes used to describe the international distribution of economic power. Polarity is particularly well-suited for characterizing the international currency system because great-power currency capabilities can be used to enforce international agreements and police international order.

Strictly speaking, polarity is the number of great powers in the international system. In a unipolar currency order, one great power enjoys preponderance and has no close rival. In a bipolar currency order, two great powers predominate and have distant rivals. And in a multipolar currency order, more than two great powers wield relatively equal influence. Yet this still leaves open the question of how to measure polarity.

Over the course of half a century, the dollar’s reserve currency role was strongest in the years following the collapse of the Bretton Woods dollar standard when President Nixon abandoned the promise to convert dollar reserves into gold—the 1971 Nixon shock. Regardless of which measure of dominance is used—polarity or systemic concentration—the dollar is significantly lower today than it was in 1973. However, the dollar’s reserve currency role is stronger than it was in 1990 when the Cold War ended. In a fifty-year perspective, the dollar reached a low point at that time, a period otherwise considered to mark the onset of America’s unipolar moment. Clearly, the level of reserve currency holdings in a single year, or within a limited time frame, is not a good predictor of US ascendancy or decline in any broader sense. Point estimates of reserve currency holdings are not a good predictor of dollar dominance either. That is because the liquidity creating role, assumed by the issuer of the first international currency, requires adjustment of expansionary policies, resulting in cycles of trade deficits when demand for dollar assets is typically high and deficit adjustment when dollar demand tends to fall. Depending on the measure used to assess dollar dominance, the most recent downward dollar cycle began in 2016 (polarity) or 2017 (concentration). According to both measures, an upward cycle began in 2020 and stabilized despite the 2022 sanctions against Russia.

The dollar’s many international roles

The dollar’s reserve currency role is used synonymously with the dollar’s ability to fulfill the range of currency functions—as medium of exchange, unit of account, and store of value—for governments and private actors. This shorthand reflects the view that governments’ willingness to accumulate dollar reserves is a condition for the longevity of the dollar system. For example, in times of crisis, when dollar shortages occur, private actors rely on their central banks to supply them with dollar assets, sometimes via swap lines extended by the Federal Reserve. Private actors’ willingness to use and hold dollars is necessary for the dollar system’s reach and entrenchment, but private entities coexist within a decentralized system. Their actions are not as consequential as those of official actors because each single entity typically holds a small slice of dollar assets. Even the considerable dollar assets held within large financial institutions consist of deposits by separate entities without any means or incentives to coordinate actions apart from inadvertently via the price mechanism. Unlike official actors, private actors’ choice of foreign currency is exclusively an economic decision. Moreover, they are unlikely to act collectively with the aim of disrupting the system. The reserve currency role is where the United States has the biggest lead relative to its nearest currency rival, the euro-zone.

How the dollar became dominant

The dollar rose to the top of the international currency hierarchy after World War I, superseding the British pound which regained its number one position in the interwar years before permanently losing currency primacy to the United States after World War II. After World War I, devastated European countries began relying on the United States for loans to rebuild their war-torn economies. The United States gradually became banker to the world with New York emerging as a financial center on a par with London. The stock market crash of 1929 and the ensuing Great Depression hit the United States hard, and the international role of the dollar declined between the two world wars. The 1944 Bretton Woods Agreement created a dollar-based system in which all currencies were pegged to the dollar and the dollar was pegged to gold, convertible at the rate of thirty-five dollars an ounce. World War II decimated European industry, which the United States helped rebuild through the Marshall Plan with large-scale investments and merchandise exports to Europe.

The United States’ strong economic lead after the two world wars, Europe’s dependence on the United States to resuscitate its ailing economies, along with the 1944 Bretton Woods agreement on the dollar-gold standard created the conditions for dollar dominance. Dollar primacy continued even as the United States broke away from the system which established the dollar’s prominent role. The Bretton Woods system capped US trade deficits at levels compatible with the United States’ ability to liquidate foreign dollar holdings through gold conversion. When the United States shook off the constraints reflected by gold conversion, the dollar system did not end. The 1971 Nixon shock simply decoupled the dollar from gold and replaced the gold constraint on US trade deficits with inflation and dollar depreciation.

The role of trade and oil

The dollar’s international role initially coincided with US trade surpluses as European countries absorbed American goods. As the European economies grew, demand for US assets grew, and the trade dynamic was reversed. US trade deficit pressures started to undermine the Bretton Woods dollar standard as predicted by the economist Robert D. Triffin. In his testimony to the US Congress, Triffin pointed to the contradiction between the United States’ liquidity provision and confidence in the dollar. The United States exported dollar assets, which were held abroad as foreign reserves, creating the liquidity needed to fuel economic growth. Dollar exports generated foreign investment in the United States leading to trade deficit pressures. In this case, the large supply of dollars undermined confidence in the dollar, particularly the United States’ ability to honor dollar conversion into gold, potentially jeopardizing the dollar standard. On the other hand, had the United States not accepted to run trade deficits the main source of international liquidity would run dry, which risked undermining international economic growth with destabilizing consequences. The United States’ liquidity provision was required for continued growth but in conflict with the long-term prospects of the dollar’s international role. Triffin predicted the breakdown of the Bretton Woods dollar system, and the dilemma remains relevant for the relationship between the United States’ liquidity creating role and confidence in the dollar. In the 1970s, oil and other commodities began to be priced in dollars, creating incentives for official and private actors to settle payments in dollars and therefore store value in dollars.

Threats to dollar dominance

The dollar remains dominant due to economic fundamentals and the history of using dollars, favoring future use because everyone else is using dollars. Supporting the dollar’s international role are factors such as the size of the US economy, its commercial and financial markets, the liquidity, depth, breadth and openness of US financial markets, the dollar’s convertibility, relative stability, and sound macroeconomic policies. The economic policies underpinning issuance of the primary international currency has not been flawless, but the historical record does not need to be perfect for the historical record to support the dollar’s continued use. The network effects of plugging into the dollar system due to the liquidity, depth, and breadth of the market for dollars creates an incumbency advantage, which is hard to overcome. In the absence of major economic or geopolitical upheaval, inertia disincentivizes a major switch to alternative currencies. Political factors could also impinge on the dollar’s role. For example, strong political institutions and property rights protection contribute to shoring up confidence in the US economy. Security ties to the United States are also said to have favored dollar use in the early Cold War days. US sanctions to uphold the liberal international order invite dollar support from states backing the order. On the flip side, an erosion of US political institutions, a weakening or reduced need for US security guarantees, or alternatively a sanctions backlash would likely reduce dollar support.

Unless political developments within the United States or US foreign policies radically shake confidence in the United States and access to dollars, economic factors are more likely to determine the fate of the dollar system.

US decline

The United States’ relative economic decline has been debated for at least sixty years. In the 1960s, Organski predicted China’s inevitable rise as a systemic leader and noted India’s likely emergence as a great power. In the 1980s, Paul Kennedy famously predicted that the United States would lose the superpower competition with the Soviet Union due to military overstretch. And an emphasis on competition in the era of economic interdependence led to repeated warnings about the United States’ ability to maintain its edge over rising economic powers, notably Europe and Japan.

The United States has declined relative to other great powers along various dimensions but remains the absolute strongest power across most dimensions. China’s gross domestic product (GDP) is nearly eighty percent of US GDP, and its goods imports are roughly equivalent to US goods imports. However, China’s financial markets are nowhere near the size or sophistication of US financial markets and China’s yuan accounts for less than three percent of foreign exchange reserves. The euro area is a closer competitor to the dollar. Euro area GDP is approximately sixty percent of US GDP, goods imports account for some ninety percent of US goods imports, and euro area financial markets are both advanced and large. The euro is the second strongest reserve currency, accounting for approximately twenty percent of foreign exchange reserves compared to the dollar’s sixty percent share.

US domestic economic policies

While the dollar enjoys an extraordinary lead over other international currencies, it is not invincible. Poor domestic policies could shake confidence in the dollar. Structurally, the United States’ liquidity-creating role—providing dollar assets to the rest of the world—and the ability to invest in the United States can interact unfavorably with low savings in the United States, resulting in large deficits, rising public and/or private debt. Unlike the euro-zone, however, the United States does not face the prospect of involuntary sovereign default because the dollar is a convertible sovereign currency. The recent specter of US default, a possibility which arises periodically, is entirely voluntary and due to a self-imposed debt ceiling. In the United States, the upper bound of the debt limit is rather determined by foreigners’ willingness to hold dollars, at worst resulting in inflation and depreciation. Although the United States cannot be forced to default, such an adjustment process may not be benign.

Geopolitical challenges

There have been few deliberate attempts to unseat the dollar as the first international currency. In the early twenty-first century, Iraq and Iran discussed switching oil pricing from dollars to euros with a view to reducing dependence on the dollar system, a response to US sanctions and interventions in the Middle East. More recently, an anti-dollar counter-coalition centered around the BRICS countries has emerged. The inclusion of China and Russia, and large emerging economies, presents a more potent challenge to dollar dominance than in the past. If sanctions, or some other development, leaves other countries dissatisfied, the counter-coalition could grow and pose a more acute defiance against the dollar system.

Rising US public debt, high inflation, and other key developments are unfolding in a strategic setting reminiscent of the Cold War environment. The most striking parallel is the return of great-power rivalries and policymakers’ preoccupation with security concerns, which are taking precedence over economic efficiency. Fears about economic decoupling, deglobalization, and fragmentation abound. On the monetary front, the worry is that countries anticipating US sanctions will move preemptively to reduce their dependence on the dollar.

China and Russia have been especially energetic in pushing alternative currencies and building a multinational financial infrastructure for trade and investment in renminbi and rubles. For example, China’s Cross-Border Interbank Payment System (CIPS) acts as a clearing house similar to the US Clearing House Interbank Payments System (CHIPS). CIPS processes a mere fifteen thousand transactions per day, amounting to the dollar equivalent of fifty billion, whereas CHIPS processes twenty-five thousand transactions per day, with a value exceeding $1.5 trillion. The CIPS initiative has nonetheless laid the groundwork to clear and settle more cross-border exchange in renminbi. When China launches a financial messaging system capable of working independently from the Society for Worldwide Interbank Financial Telecommunication (SWIFT), it will have its own complete, autonomous architecture for settling cross-border transactions denominated in its own currency.

For its part, Russia has already taken steps to bypass SWIFT, creating its System for Transfer of Financial Messages (SPFS) after its illegal annexation of Crimea in 2014. Russia’s central bank claims that demand for SPFS has increased significantly since last year’s full-scale invasion of Ukraine. At the time, however, the system had only around four hundred users.

Still, owing to new payments infrastructure and various bilateral agreements, pursuing trade and investment in non-Western currencies has become somewhat easier. Russia and China have agreed to trade in renminbi; and, reviving the Cold War-era rupee-ruble mechanism, Russia and India were planning to trade in their own currencies following Russia’s invasion of Ukraine. However, that effort was recently discontinued, with both countries settling on using the United Arab Emirates’ dirham instead. All told, such use of alternative currencies by third countries remains small. While the renminbi is being used to settle a Russian investment in a nuclear-power plant in Bangladesh, other examples are scarce.

Governments are also making plans to move away from pricing oil in dollars, although the significance of this development is easily overstated. Oil may be one of the world’s leading export products, but it ultimately accounts for a small share of global trade.

More broadly, because international currencies are, by definition, used by third countries, adopting a trade or investment partner’s currency will not necessarily raise that currency’s international role, even if it does reduce the greenback’s relative role in cases where those transactions were previously denominated in dollars.

Those predicting the end of dollar hegemony also point to China’s own use of bilateral swap lines to allow foreign central banks to acquire renminbi in exchange for their own currency. Making renminbi available to foreign governments is a prerequisite for its use by public and private actors, and the ability to act as lender of last resort in times of crisis is a key reserve-currency function.

China has also been maneuvering to expand its institutional footprint, such as by introducing an emergency renminbi liquidity arrangement under the auspices of the Bank for International Settlements (BIS). Similarly, the basket of currencies underpinning the International Monetary Fund’s special drawing rights (SDR, the IMF’s reserve asset), now includes the renminbi, alongside the dollar, yen, euro, and pound sterling. And the BRICS (Brazil, Russia, India, China, and South Africa) have also discussed ways to push back against dollar hegemony, such as by issuing a joint reserve currency to bypass the dollar and other major Western currencies (as well as offering an alternative to SDR).

Finally, one of the most eagerly anticipated technological developments in this area is China’s creation of digital payment alternatives. China’s central bank introduced a digital currency, the e-CNY, in 2016 and offered this payment option to participants at the 2022 Olympics in Beijing. When fully implemented, the e-CNY will function independently of other payment and financial-messaging systems. By offering cheaper, faster, and safer transactions, a Chinese digital currency could make the renminbi more attractive and therefore more widely accessible and liquid. Promoting the e-CNY for trade and investment could accelerate renminbi internationalization.

But underlying trade and investment patterns must change before the global currency hierarchy does. Here, the China-centered Regional Comprehensive Economic Partnership, as well as China’s Belt and Road Initiative, could help internationalize the renminbi by multiplying economic interactions and encouraging renminbi use in third-country trade and investment. Still, in the medium term, renminbi internationalization is likely to encounter substantial hurdles, owing to China’s maintenance of capital controls and broader balance-of-payments constraints.

Why sanctions are an unlikely tipping point for dollar dominance

Following Russia’s invasion of Ukraine, geopolitical blowback is widely seen as threatening dollar dominance. To fully grasp what today’s turbulence means for the dollar system, we must however move beyond the motivations of countries targeted by sanctions. Many countries benefit from US currency coercion because they share the core principles behind US sanctions. Countries supporting sanctions on Russia have strong geopolitical incentives to continue holding and using dollars for international reserve and payment purposes. Supporting the dollar reinforces the constraining impact of the sanctions and helps ensure their future effectiveness. The economic incentives these governments previously had to diversify away from traditional currencies, particularly the US dollar must now be weighed against their geopolitical incentives to hold dollars. Together, the coalition arrayed against Russia accounts for more than ninety percent of global currency reserves, approximately eighty percent of global investment, and sixty percent of world trade and world economic output. Overcoming that dominance would be difficult even if every country that has declined to sanction Russia fell in line behind an organized anti-dollar coalition. Moreover, countries not participating in sanctions against Russia do not necessarily disagree with the goals behind them: ending the war in Ukraine and deterring future territorial aggression. The coalition behind the sanctions against Russia is broad, wealthy, and militarily powerful, and its objective of ending Russia’s barbarous war is widely shared, even by those not participating in the sanctions. Geopolitically induced dollar support is rather likely to stabilize dollar holdings.

Having noted the relationship between sanctions and dollar dominance a decade ago, I am not suggesting there is no possible scenario in which sanctions threaten dollar hegemony, simply that the Russia sanctions are highly unlikely to represent such a tipping point. Sanctions should be designed to prevent the unipolar currency order from further eroding. For example, by building broad sanctions coalitions in which participation is strictly voluntary and without forcing countries to choose sides. Sanctions can be costly for third parties. Whenever possible, steps should be taken to alleviate unintended consequences. In addition, sanctions should be reserved for clear-cut cases in which the international order is under threat, as in Ukraine, and should not be used for parochial purposes, as when sanctions were reinstated against Iran in 2018, even though Iran had not broken the terms of the nuclear deal, or when the Trump administration imposed overly harsh sanctions on Cuba. Imposing sanctions to pursue narrow US interests raises legitimate fears among countries that they could be targeted next, motivating them to find alternatives to the dollar. Using sanctions to preserve the central elements of the liberal international order is a goal many countries can subscribe to, or at least tolerate, leaving the dollar as their continued currency of choice.

Other geopolitical drivers

Sanctions risk is not the only geopolitical factor shaping dollar use. In today’s fraught international environment, countries question the wisdom of system-wide economic interdependence and privilege economic ties with friends. As security concerns eclipse economic concerns, the United States and Europe are limiting their economic dependence on foreign adversaries and pushing to relocate manufacturing and supply chains to allied nations in what has come to be known as “friend shoring.” Just as countries are beginning to source goods and inputs from friendly nations, they may very well adopt the currencies of friendly nations. We should therefore expect a return to the Cold War logic in which economic relations more frequently align with security relations. With the United States at the bullseye of the largest security network in the world, the dollar stands to benefit from this shift. As during the Cold War, US security provision may induce allied dollar support.

Concluding remarks

In short, the size of the sanctioning coalition, the number of nonparticipating sanctions supporters, and the number of countries under the US security umbrella, make large-scale currency diversification away from the dollar unlikely, at least in response to the Russia sanctions. To preserve the existing currency hierarchy and limit the long-term trend towards currency multipolarity, the United States must adopt sound economic policies and use economic statecraft to promote the public good of international order from which most countries stand to benefit. The United States cannot afford to alienate key allies, or a large portion of the international community, and simultaneously preserve the unipolar dollar era over the long term. For the first time since the collapse of the Bretton Woods gold standard, we are seeing a systemic limit on the dollar centered economic order and US foreign policy. 

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Dr. Carla Norrlöf

Nonresident Senior Fellow

Economic Statecraft Initiative GeoEconomics Center

Trade

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Table of contents

• Introduction: Why the United States needs a new targeting model better suited for cooperation
• Expanding the joint force’s competitive mindset
• Operationalizing integrated deterrence: A new model for targeting and effects
• Explaining the model of a modified targeting and effects process
• I. Placement and access
• II. Focused understanding
• III. Options
• Targeting throughout the competition continuum
• Harnessing data to improve the targeting and effects process
• Data
• Sense
• Make sense
• Act
• Using the competition space to prepare for high-end armed conflict
• Shaping the environment
• Shaping across the physical and virtual domains
• Capability development
• The way forward
• Culture: Adapting the joint force’s mindset to global problems across the competition continuum
• Incorporating all instruments of power
• Embracing the global nature of problem sets
• Technology and data: Building a resilient and holistic data architecture
• Authorities, rules of engagement, and risk: Updating DOD guidelines and standards
• Conclusion
• About the authors

Introduction: Why the United States needs a new targeting model better suited for competition

Traditional joint force deterrence is no longer sufficient: a near-singular focus on armed conflict and platform-based capability development fails to deter strategic adversaries like China and Russia from their pursuit of strategic objectives while simultaneously increasing the risk of war. Simply owning the most advanced weaponry, while ceding ground in the competitive space left of conflict, is not enough to meet US deterrence needs, nor is it sufficient to ensure the joint force prevails in conflict. Expanding the joint force’s construct for targeting and effects generation will enable the Department of Defense (DOD) to more effectively deter future conflict while simultaneously shaping the environment to the joint force’s advantage in conflict should deterrence fail.

Why the twenty-first century security environment merits an updated approach

Today’s security threats span the competition continuum, cut across theaters and domains, and are intensified through the application of emerging technologies. The joint force faces challenges spanning the full competition continuum from high-end conflict to gray zone competition, including cyber threats and economic coercion, to cooperation. Technological advancements have changed the character of threats, the types of activities that the DOD can conduct, the speed at which it can act, and expanded its notion of physical and non-physical tools and effects. Specifically, the evolution of the cyber domain has enabled the joint force to gain access to non-physical spaces and generate options to achieve effects in a matter of milliseconds. The realities of twenty-first century competition drive the need to confront adversaries across a global contact layer to counter malign activities and proactively advance US strategic objectives. In other words, actions in one theater or domain can generate options and lead to outcomes in distant corners of the globe.

Moreover, the joint force faces a far more sophisticated adversary in China—qualitatively and quantitatively—than it did in countering violent extremist organizations over the past two decades. Strategic competition requires a significant mindset shift to effectively harness the effects of multiple instruments of power in a global, multi-domain, and coherent manner. DOD doctrine acknowledges this, but the department and joint force have yet to fully operationalize it.

While many activities executed along the competition continuum can enable success in conflict, specific operations, activities, and investments are necessary to ensure joint force superiority in direct combat, especially considering the criticality of combined arms warfare with allies and partners, as well as the seamless integration of multi-domain fires and effects. joint force activities must continually pursue positional advantage across the competition continuum to achieve the necessary balance between deterrence and conflict preparation. Yet, currently, the level of attention to and investment in preparation for armed conflict inhibits the joint force from leveraging the vast data, tools, and authorities at its disposal to prevent such conflict from occurring in the first place.

How joint force operations can meet an evolving threat landscape

The joint force must update its approach to targeting and effects generation to respond to the range of security challenges at hand, else it risks losing without going to war. Success across the full competition continuum will be enabled by the joint force’s ability to effectively harness data and a wide spectrum of tools and authorities with speed, precision, and lethality. This necessitates a deeper and more informed understanding of adversary capabilities, the operating environment, the interconnected nature of the physical and virtual domains, and the range of data sources available to operators. By “expanding its competitive mindset and competitive approach”¹ —to include and integrate tools, information, and actions that span the competition continuum—the joint force can exploit this understanding to apply the right effects to the right problems at the right times, advancing strategic objectives and maintaining informational, decisional, and combat dominance. An expanded competitive mindset will allow the joint force to view competition not as an inevitable march toward future conflict, but rather as a persistent effort to gain and maintain positional advantage across all domains.

The joint force is designed to excel at crisis response; it must make a deliberate mindset shift to plan prior to impending crisis (and prevent such scenarios from occurring in the first place). However, while the urgency of evolving the joint force’s targeting framework is evident across doctrine and policy,² the joint force has not yet taken to scale an assertive approach to dominating across the competitive space. Doctrine included in the DOD’s 2022 National Defense Strategy (NDS) and the Joint Concept for Competing, for instance, make clear that the department and joint force are thinking about strategic competition more broadly, yet operationally—through authorities, combatant commands, and collaboration with different agencies and allies—DOD and the joint force have yet to fully realize integrated deterrence.

What this report sets out to achieve

Operationally, the joint force has not adapted to an era of strategic competition, which requires targeting across theaters and domains, the entire competition continuum, and leveraging the range of data sources at its disposal. Doing so requires the joint force to stitch together the data, tools, and authorities needed to achieve global objectives—rather than viewing missions as constrained to a singular region or ends, as has been the status quo.

This report outlines a framework to leverage existing targeting models to more assertively and deliberately compete by: 1) incorporating an expanded use of military and interagency capabilities; 2) leveraging expansive public and private data and harnessing it for effect through emerging technologies; and 3) smartly balancing priorities and weight of effort related to competition and conflict preparation. The authors offer key action areas for implementation at scale.

Expanding the joint force’s competitive mindset

While the Pentagon recognizes it must adopt a new mindset to prevail across the competition continuum, it continues to approach targeting and fires through a lens of armed conflict. Traditional approaches to targeting and fires still prevail across the joint force despite the recognition of a need to expand them. Traditionally, the joint force aligns “sensors to shooters” (i.e., targeting) to inflict damage on enemy personnel, materiel, or infrastructure (i.e., fires or effects generation). This sentiment is expressed through variations of the targeting cycle, whether it be the dynamic targeting kill chain (Find, Fix, Target, Track, Engage, Assess) or the Special Operations Forces-preferred cycle (Find, Fix, Finish, Exploit, Analyze, Disseminate). These processes lend well to a temporal and kinetic approach to targeting and fires—exemplified by strikes on violent extremist organization (VEO) leadership networks or disabling mobile surface-to-air threats as part of a layered suppression of enemy air defenses effort—yet they are insufficient for generating the nonlethal and continuous effects necessary in today’s expansive security environment. This traditional approach to targeting and fires is incongruent with current DOD realities, given “most joint force activities occur in the context of cooperation and competition below armed conflict.”⁴

As the DOD recognizes through its integrated deterrence concept, the joint force’s tool kit expands beyond the military arsenal, and solely relying on traditional approaches for targeting and effects is limiting. As articulated in the NDS, integrated deterrence campaigning calls for the joint force—in alignment with and often in a supporting role to other instruments of power found across the interagency—to execute “logically linked” activities to advance “strategy-aligned priorities over time” in order to counter or complicate competitors’ coercion across the globe.⁵ Linking activities across global campaigns require a high level of understanding of competitors’ intent and capabilities and their underlying geopolitical realities, enabled by prolonged access across multiple domains, which creates options to leverage multiple effects in achieving desired ends. For example, developing an understanding of how China’s coercive economic activities in Africa and Latin America support its broader global ambitions can inform the breadth (and complexity) of US response options. While the joint force typically excels at responding to crises, single-purpose platforms and the constant rotation of forces often prohibit the long-duration stare that integrated deterrence requires for proactive campaigning left of crisis.

Operationalizing integrated deterrence: A new model for targeting and effects

To achieve integrated deterrence, this paper outlines a model for operationalizing it. The joint force must meld the existing framework for joint targeting with a model that places a premium on gaining placement and access in a domain or region, enabling a focused understanding of an entity of interest, to facilitate a range of options for the joint force to execute in concert with other instruments of power, whether in a supported or supporting role. Each layer includes the concepts of persistence, local distinction, and global relevance, and can be in a near-constant state of change based on the sensing environment. For example, security cooperation with a partner in Southeast Asia requires access, understanding, and options that are: 1) persistent, to ensure ongoing understanding and to achieve effects over the long term; 2) locally distinct based on regional and local considerations; and 3) globally relevant, acknowledging that awareness and action related to one country affects global dynamics and goals. This layered model is represented in Figures 1 and 2 and further described below.

Integrated Deterrence Targeting. The figures above convey the elements of the joint targeting cycle and the dynamic targeting process (figure 1), with a philosophical and nonlinear pyramid approach to developing options for complex problems (figure 2). These two frameworks must be fused together to operationalize integrated deterrence. The joint force’s traditional targeting cycle must be informed by a foundation of situational awareness. Data, tools, and authorities are all necessary mechanisms to establish situational awareness.

Explaining the model of a modified targeting and effects process

Adopting this layered model is critical for two reasons. First, the complex, global, and multi-domain problem sets the DOD faces today necessitate options that are similarly sophisticated in nature and cut across the competition continuum. By prioritizing a deeper and more comprehensive understanding of problem sets, the joint force is presented with a wider array of options to address key challenges. Such focused understanding is possible when the near-infinite amount of data available across the public and private sectors is transformed into usable information and, ultimately, intelligence.

Second, a new competitive mindset requires broadening the joint force’s tool kit beyond traditional military effects. The joint force has the authority to, and does, execute non-kinetic targeting, albeit insufficiently, yet it prioritizes kinetic fires as part of the traditional targeting cycle. Fusing kinetic and non-kinetic fires is critical not only from a deterrence perspective but also, more significantly, to enable victory in armed conflict. Yet, alone, the military instrument of power is insufficient for the problem sets germane to integrated deterrence. While the joint force has significantly advanced its organic non-kinetic capabilities, it primarily leverages kinetic effects, which neglects other instruments of power, disincentivizes creative thinking, and leads to poor integration with interagency partners.⁶ A high degree of awareness of the capabilities and authorities that other instruments of power bring to the table is critical such that they can be synchronized with, or amplified by, joint force activities at all echelons.

The process of generating placement and access, focused understanding, and options is not linear, and each stage can and should inform the others over time. Specific placement and access may be generated to understand a particular problem in a sophisticated manner such that novel options can be developed. Similarly, focused understanding may drive the need for additional or alternative access to close critical intelligence gaps and inform options. Likewise, commanders may demand options to address a particular problem, which in turn will inform the planning process to generate the necessary access and understanding. Below is an overview of the three foundational elements of the pyramid.

I. Placement and access

To develop the focused understanding required for integrated deterrence, the joint force cannot stare at problems from afar. Placement and access are foundational to developing an enhanced understanding of the problem sets facing the United States. Placement and access, however, does not necessarily mean physical proximity of the military to a particular interest area—it also encompasses virtual presence and can be developed by the joint force, interagency partners, and allied counterparts. It also implies some degree of usability, sustainability, and repeatability; simply visiting a location or gaining virtual access to a network does not equate to true placement and access. Rather, that access must be repeatable if it is temporal in nature, sustainable over operationally relevant time periods, and usable for alternate purposes such as data collection, security cooperation, or reception, staging, onward movement, and integration. Placement and access can be enhanced by leveraging data from a multitude of sources to enable the joint force insight into digital networks of value to access, or the nature of key partnerships required for physical access. Additionally, enhancing existing authorities and making them more flexible would allow units pursuing a mission set in one area to adapt and undertake additional mission sets that may be valuable for a broader or global mission set.

Evolving the joint force approach to placement and access will open a range of opportunities given the interconnected nature of global problem sets. For example, France’s historical security cooperation and counterterrorism activities in the Sahel region of West Africa, during the 2010s, could have also served as an access vector to increasing understanding of the growing threat of Russian private military corporations (PMC) like Wagner Group in the region. This physical proximity can enable a deeper understanding of Wagner’s activities in the region, potentially driving requirements for further physical or virtual access or informing options in line with global campaign plans to counter Russian malign influence. Critically, the joint force must explore means to creatively exploit access when mission convergences exist—units or platforms deployed for one purpose, such as countering VEO, may enable access vectors to support another mission, such as strategic competition, and vice versa. While clarity of primary and secondary objectives of missions would need to remain, the makeup of units and task forces, and the requisite authorities given to them, should be meaningfully considered to capitalize on mission convergences. Not only does this approach create efficiencies with respect to endeavors like security cooperation, but it also offers the opportunity to obfuscate strategic intentions.

II. Focused understanding

Focused understanding of an actor, environment, or relationship is required to solve complex problems, not only due to the sophisticated capabilities of strategic adversaries but also because integrated deterrence campaigns are global in nature. Transregional, multi-domain problems cannot be thoroughly addressed in compartmentalized and only localized ways. Rather, the joint force must stitch together regional understandings based on local access and conditions with broader knowledge informed by other global touch points. The roles of partners, both interagency and international, are critical in developing focused understanding. Not only do they enable multi-domain access, but they also provide unique perspectives. The vast amounts of commercial and government data can and should be harnessed and fused to improve focused understanding of actors and problem sets. While data from traditional sources is immensely valuable, open-source information—organized into actionable information—can drastically improve understanding of patterns and behavior. For example, social media data may help inform US forces of the presence of an adversarial force’s covert presence in a country that may be hard to identify or find evidence for using other means. Ultimately, the fusing of different data sources more consistently can help understanding across the competition continuum.

Building on the previous example, to address Wagner Group’s activities in the Sahel, the joint force should first understand how those activities tie into Russia’s global campaign to secure influence and create instability through expeditionary PMC activities. A holistic understanding of Wagner’s activities across the Sahel, Central Africa, Latin America, Syria, and Eastern Europe presents a more informed picture of the totality of the problem, as well as the associated pressure points, vulnerabilities, and opportunities. Moreover, the local US country team, elements of the intelligence community, French forces, and host-nation partners will all view the Wagner problem in different lights, which can enhance the joint force’s perspective and is necessary in developing viable options leveraging all instruments of power.

This combination of regional and global understanding, enabled by joint force and partner access and capabilities, ultimately informs a far greater range of options than is achieved strictly through a regional military lens, which has been the status quo. Critically, focused understanding better informs risk assessments at echelon, abating risk aversion frequently seen at higher levels of command authority that are farthest removed from the tactical edge.

III. Options

Senior leaders and commanders typically request a range of options to address problems, both to allow flexibility and enable sound decision-making in light of strategic priorities and risks. The Joint Concept for Competing calls for the joint force to:

While doctrinally this is clear, today’s traditional approach to targeting and competition limits the most effective suite of options from being generated. More-nuanced options may place the joint force in a supporting role to other departments and agencies: for example, conducting traditional manhunting activities (via military authorities) to enable a diplomatic action such as a démarche (via Department of State authorities). The level of sophistication required to achieve what the Joint Concept calls for, especially across activities below armed conflict, makes both risk and efficacy assessments challenging. It is far more difficult to quantify the effectiveness of a campaign to counter Chinese regional influence—for example, assessing long-duration efforts to obstruct effort by the People’s Republic of China (PRC) to secure access, basing, and overflight—than it was to measure the success of kinetic drone strikes during the Global War on Terrorism. This challenge is met not only by prioritizing focused understanding but also by parlaying that understanding into a range of options that may be locally distinct but support global campaign plan objectives.

Ultimately, options for senior decision-makers are developed to achieve outcomes that are in service of more-aspirational objectives. Again, examining Wagner activity, a desired outcome of an operation could be to deny Wagner’s ability to securely communicate between several outstations across the Sahel. The aspirational objective is to critically degrade Wagner’s ability to conduct and sustain expeditionary activities globally.

Targeting throughout the competition continuum

This model for the generation of options for complex problems must be melded with an adaptation in the application of traditional joint force targeting processes. Joint targeting is not solely reliant on joint force tools, capabilities, and authorities; it can and should incorporate other instruments of power—by collaborating across departments and agencies—to bolster data and inform understanding, as well as “identify, develop, and affect targets to meet commander objectives.”⁸

Take, for example, a PRC network in Latin America that facilitates command and control of dual-use infrastructure. Here, data could be harnessed from the intelligence (e.g., National Security Agency) and diplomatic (e.g., Department of State Regional Security Office) instruments of power to identify a particular local criminal network that facilitates relevant PRC contracting activities. Host-nation law enforcement can then apply pressure on the criminal network to share information about the PRC actors with whom it engages routinely. Over time, this information can help generate several options to gain access to the objective network through Special Operations Forces-enabled cyber activities. Throughout, the military (e.g., Military Information Support Operations) and diplomatic (e.g., Department of State Global Engagement Center) instruments of power can expose malign PRC practices through information operations to positively shape narratives in line with strategic objectives. The joint targeting cycle could be leveraged multiple times for:

• Employing traditional manhunting techniques to find and fix specific local criminal actors of interest, develop their pattern of life, then using non-kinetic fires to register their phones with specific networks that enable intelligence access to key digital data.
• Leveraging data obtained through financial (e.g., Treasury Department Office of Foreign Assets Control) instruments of power to target specific institutions that enable transactions between local criminal networks and the PRC. This data can be correlated with intelligence derived from the activities above, as well as populated to other portions of the joint force focused on countering PRC dual-use activities to further global understanding of their tactics, techniques, and procedures.
• Conducting intelligence preparation of the cyber environment to find and fix key nodes that are vulnerable to offensive cyber fires (e.g., US Cyber Command), as well as to bolster and amplify information operations that counter local PRC propaganda strategies.

The myriad of joint targeting activities outlined above not only enable specific tactical actions but also inform or further placement and access that continuously matures the collective understanding of the operating environment. Given the nature of strategic competitors, much of this understanding can be exported to other locations to bolster awareness and enable the linking of activities in a logical way as outlined in the NDS. At the center of this process is data, and as stated by former Deputy Secretary of Defense David L. Norquist, “our ability to fight and win wars requires that we become world leaders in operationalizing and protecting our data resources at speed and scale.”⁹

Harnessing data to improve the targeting and effects process

The joint force’s ability to leverage data at speed and scale, predicated on its adoption of emerging technologies such as artificial intelligence (AI), enables this framework for targeting and effects generation. Data informs the nature of required access, feeds the focused understanding process, and enables the development of well-informed options that artfully balance desired outcomes with strategic risk. However, raw and unstructured data in isolation does not create a decisive advantage. Rather, it must be harnessed for effect, transforming data into both information and intelligence that is usable and accessible at the speed of relevance.

While the importance of data is nothing new, the joint force must grapple with the explosion of available data spanning all domains, sectors, and sources. Technologies such as AI and machine learning (ML) present meaningful ways to navigate this near-infinite amount of data. The 2020 DOD Data Strategy envisions the department as a “data-centric organization that uses data at speed and scale for operational advantage and increased efficiency,” with particular focus on enabling all-domain operations, more rapid and informed decision-making, and organizational business analytics.¹¹ Moreover, AI makes determinations and finds data connections in ways humans alone cannot, encapsulating everything from making obvious connections more rapidly (e.g., using satellite data to geolocate battlefield equipment) to identifying valuable datasets overlooked by humans (e.g., how commercial shipping telemetry data can enable deeper understanding of the PRC’s fifth-generation [5G] infrastructure development in Africa).

Data

Data is obtained by a variety of automated or manual and physical or virtual means. Any entity that can obtain data is considered a sensor. Data becomes information once put into context prescribed with meaning by the observer. Often, the meaning prescribed by the observer can be adapted as understanding of the environment grows, making particular datasets more or less useful. The process by which information is transformed into intelligence is complex and combines both art and science as described in JP 2-0 Joint Intelligence:

• Intelligence fuses and evaluates information from multiple sources to provide the most accurate assessment possible of the current state of the operating environment.
• From current assessments, intelligence draws predictive estimates of the full range of potential alternative future states of the operating environment.
• To inform decisions, intelligence illuminates how the operating environment may react to different friendly options under consideration.¹²

The flow from data to intelligence—known as the processing, exploitation, and dissemination (PED) cycle—is illustrated in Figure 3, overlaid with the targeting framework from Figure 2.

The nature of today’s security environment necessitates the execution of PED at greater speed and scale than is achievable by humans alone. Particularly, the operating environment below armed conflict—which encompasses most joint force activities—places a premium on scale. To effectively compete globally and deter China and Russia, large quantities of data must be triaged and transformed into intelligence to inform transregional and multi-domain activities that are logically linked. In contrast, armed conflict—the highest-risk joint force activity—places a premium on speed. Rapidly processing and disseminating targeting data, effectively integrating kinetic and non-kinetic fires against mobile targets, and incorporating virtual capabilities that can affect adversary nodes within milliseconds would be impossible without AI/ML and human-machine teaming. The Joint All-Domain Command and Control (JADC2) concept describes the importance of this flow from data to intelligence based on the requirement for “joint force commanders to ‘sense,’ ‘make sense,’ and ‘act’ in the operational environment.”¹³ While this paper is not focused on the JADC2 and Joint All-Domain Operations (JADO) concepts, the employment of this paper’s updated targeting and effects process would support the more rapid implementation of JADO/JADC2 across the joint force.

The process of sensing, making sense, and acting is continuous. The speed by which this process plays out is variable based on the nature of the domain, location along the continuum, commander’s intent, and both local and global risk considerations. Deliberate planning and preparation of the operating environment, to include the establishment of relationships and infrastructure, deployment of sensors, and data architecture, and other such activities are necessary to enable this process to occur with speed downstream. In particular, active conflict places a premium on achieving maximum speed for this process, which simultaneously necessitates extensive preparation and autonomy.

Using the competition space to prepare for high-end armed conflict

Conflict preparation is the persistent, locally distinct, and global sensing of the target ecosystem. It is a dynamic process that constantly generates and updates the integrated targeting planning and execution decisions. Prevailing in armed conflict is the ultimate basis for the existence of the joint force, and places a significant premium on preparation to maintain a position of advantage, inform capability development, and hold adversaries at risk. Armed conflict exists on the far-right side of the competition continuum and represents the most consequential activity the joint force must prepare for and, when called upon, execute. While often referred to in sterilized terminology, a clear description of armed conflict—the application of violence to destroy an enemy’s will and means to resist—serves to highlight the care and attention that preparation for conflict requires. While any type of conflict requires serious attention, high-end armed conflict against a peer adversary represents the most potentially dangerous scenario for which the joint force must prepare. While the objective of integrated deterrence is to deter conflict from occurring in the first place, it is equally about shaping the environment to ensure joint force dominance should deterrence fail. As outlined in Joint Publication 3-0, “while commanders conduct activities of cooperation and adversarial competition, they are still preparing for armed conflict.”¹⁵

Conflict preparation is a balancing act. The joint force must weigh concerns of strategic risk and escalation management: “Tilting the competitive balance too far in one’s own favor will affect an adversary’s decision-making and behavior, but the effect may be vertical or horizontal escalation, not compliance.”¹⁶ Smartly preparing for conflict to create and maintain advantage over an adversary can be a campaign in its own right and must involve shaping activities as well as capability development. These activities will often nest within an overarching integrated deterrence campaign, but at times these endeavors may diverge, at which point the balance of priority and weight of effort must be considered. For example, winning a conflict to defend the Panama Canal would be a clear priority of the United States. However, preparation for such a conflict is not assigned the same weight of effort as, for example, the defense of Taiwan, which is being treated as a high-likelihood event by the Pentagon today.

The United States will not achieve a decisive warfighting advantage against a near-peer competitor through sheer mass or weapon systems alone—rather, the victor will be the military that stacks the deck in its advantage before conflict erupts. Russia’s current war in Ukraine highlights the severity of high-end armed conflict involving near-peer competitors. While great wartime effort is aimed at bolstering sustainment through industrial base and supply chain modernization, operational activities will eventually be curtailed to whatever pace can be sustained through resupply. The joint force’s future advantage will hinge on its ability to: 1) advantageously shape the environment and 2) field capabilities with greater speed, precision, and lethality than its adversary.

Shaping the environment

Shaping the environment is crucial to securing a position of advantage across multiple domains left of conflict. In the context of targeting and effects generation, activities to shape the environment must center around closing critical operational and intelligence gaps associated with a prioritized target list tied to operational plans. These activities are intended to enhance precision and lethality of engagement and shorten the kill chain once armed conflict begins. In line with the framework espoused in this report, focused understanding of the enemy’s order of battle, critical infrastructure, battle management tactics, techniques and procedures, and standard operating procedures is key to establishing and maintaining a prioritized target list. In this way, portions of the joint targeting cycle are accomplished prior to conflict, informing weaponeering recommendations across kinetic and non-kinetic effects, as well as the requirements necessary to develop new capabilities to counter enemy systems for which the joint force does not yet possess a solution.

Moreover, shaping activities can be geared toward increasing resiliency in the joint targeting process. Much attention is given to the challenges of contested, degraded, and operationally limited (CDO) environments and how they complicate traditional means by which the joint force projects combat power. Peer adversaries can contest environments in a multitude of ways such as anti-access/area denial capabilities, electromagnetic interference, countering space situational awareness, and defensive cyber operations. Shaping activities must prioritize alternate means of accomplishing warfighting functions given the potential for primary means to become denied or degraded. Ironically, the CDO nature of Russia’s war in Ukraine has led to a much more conventional and analogue fight than anticipated. This highlights the importance of bolstering resiliency through shaping operations, as peer adversary denial capabilities may effectively cancel out one another’s high-end platforms.

Shaping across the physical and virtual domains

As is the case throughout the competition continuum, the contact layer for armed conflict is both physical and virtual. Traditional physical targets include surface-to-air missile systems, radars, maritime vessels, and command posts, and they exist in quantities of hundreds or thousands; virtual targets include network nodes tied to communication systems, power infrastructure, situational awareness, and early warning, and they are quantified in the millions. When expanding the battlefield to the virtual domain, synchronization of kinetic and non-kinetic effects can lead to significant advantages across the joint warfighting functions¹⁷ and with regard to the principle of mass.

Gaining a competitive advantage traditionally depends on availability and posture: the forces available, and on what timeline, are determined by their current posture. In the physical world, this construct presents challenging time-distance problems when considering global conflicts, raising questions for both escalation management as well as force preservation. The virtual world can alter this paradigm by enabling virtual mass, leveraging cyber operations to hold adversary networks and capabilities at risk at unprecedented speed and scale. Even modest impact on adversary capabilities executed on this scale of mass and speed can complicate the enemy’s risk calculus and mitigate some risk associated with physical force flow into theater. Given the challenges of logistics and sustainment, efficiencies gained through the employment of virtual capabilities provide a significant advantage during a protracted conflict. Saying this, virtual capabilities are not a silver bullet and effects delivered through cyberspace are insufficient in isolation during armed conflict, and often require large up-front investment in time and resources.

The evolution of virtual targeting and effects, to include the integration with physical targeting and fires, drives a greater premium on shaping the environment prior to conflict. To hold millions of virtual targets at risk instantaneously necessitates significant preparation of the environment. Indeed, a multiyear campaign built around access and understanding—by, with, and through regional allies and partners—may be necessary to simply gain access to the right adversary networks. Development and installation of cyber capabilities would be executed in parallel, with the associated development and intelligence gaps feeding back into the overall campaign approach. Shaping campaigns can provide the decisive advantage once armed conflict begins, all while informing the joint force of its own potential vulnerabilities and thus allowing for continued defensive hardening in stride.

Capability development

While fielding innovative and advanced technologies is critical to maintaining a decisive battlefield advantage, technology (whether platform or software-based) does not on its own equate to capability.¹⁸ Rather, it is the combination of technology, tactics, and training that creates a true capability—for instance, the United States sells fifth-generation fighter jets to other nations, but those nations do not instantly gain the capability to execute low-observable deep strike operations. Technology development must be informed by an understanding of the operating environment, the capabilities of adversaries, and the nature by which the joint force executes operations. To that end, furthering capability development is an objective for the campaigning framework outlined in this paper.

Training AI/ML algorithms often emulates or requires real-world data, further underscoring the need for capability development to harness data for effect. While great strides have been made in emulation for training, the real world offers the most significant data, which is accessible through robust campaigning activities across the joint force in concert with interagency and international partners. The integration of emerging weapon system technology such as hypersonics, lasers, and space-based fires is equally critical. Capabilities such as JADC2 seek to establish the necessary datacentric architecture for seamless integration of information and effects, which span employment times from milliseconds to hours. However, without AI/ML-driven predictive capabilities in the loop, joint force commanders will be challenged to make appropriate targeting and weaponeering decisions amid a large-scale conflict, creating significant risk with respect to sustainment, logistics, and force protection. Without a similar distribution of situational awareness, authority, and capability to the tactical edge, the joint force will not be able to field a credible combat force in a CDO environment where being disconnected from higher headquarters is the norm.

Lastly, while security cooperation is a foundational activity underlying integrated deterrence, the execution of high-end combined arms warfare with allies and partners requires a great deal of specific investment. This includes years of combined training, exercises, and rehearsals to create a dependable capability, especially when factoring in the complexity of integrating emerging technology. Incorporating allies and partners into the joint force-led scheme of maneuver will be critical to maintaining an advantage in targeting and effects generation. However, information-sharing hurdles, disparate rules of engagement, authorities, and cultural considerations must be ironed out in advance of conflict such that the full force of allied firepower can be realized. Ensuring that key allies are fielding capabilities that are JADC2 compatible will be critical to achieving the shared situational awareness required for a common operating picture. Making strides of this nature and fielding a combat-credible combined force will not be accomplished through sporadic exercises, key leader engagements, or exchanges; the joint force must train with allies and partners in the same manner with which it trains internally.

In sum, high-end conflict with a peer adversary presents the most difficult and high-risk challenge, and it requires specific attention given the gravity of its nature. When adequately prioritized, preparation for armed conflict prescribes a unique set of requirements for the joint force and its partners to execute during cooperation and competition and across multiple domains and instruments of power, which at times may overlap or diverge from deterrence. Shaping activities of this nature fall expressly within the proposed proactive targeting and effects framework given that, in the event of war, “these capabilities will shape the environment to ensure combat dominance and our ability to end any conflict on our terms.”¹⁹

The way forward

Implementing change is no easy task, especially when considering the massive scale of the joint force. Nonetheless, a tidal wave of contemporary strategies, guidance and policy documents, and service visions all speak to the urgent need for change. Culture—coupled with procedural and technological changes—will be key to enabling sustainable adoption of a new approach.

Culture: Adapting the joint force’s mindset to global problems across the competition continuum

First, to deter armed conflict the joint force must adopt and operationalize the competitive mindset shift outlined in recent strategic doctrine. While armed conflict is never desirable, regardless of scale, high-end warfare between nuclear-armed peer competitors is of such gravity that deterring it from ever occurring is crucial. General Mark A. Milley’s assertion that “traditional joint force deterrence” is “less effective,” alludes to the notion that owning the most sophisticated or greatest quantity of weaponry is inadequate on its own as a deterrent.²¹ Moreover, while an adversary’s belief in the joint force’s will to act is critical to deterrence, it cannot solely revolve around direct military force given escalation concerns. Rather, adopting a more proactive and creative approach to strategic competition can simultaneously deter malign behavior while complicating, confusing, and frustrating adversary decision-making. The spectrum of views on Russia’s war in Ukraine are informative in this regard: Some highlight US and NATO success in arming Ukraine in its valiant campaign to oppose Russia’s invasion, whereas others view the ongoing war as “a direct result of the West’s lack of resolve and failure to credibly deter Russia” from waging war on the European continent more broadly, regardless of NATO borders.²² This latter sentiment pushes the force to adopt cultural change in order to deter future conflicts. Of course, the United States cannot deter all conflicts from occurring. However, well-informed global campaign plans can and should inform the prioritization of operational activities tied to certain potential conflicts the joint force deliberately seeks to deter.

Incorporating all instruments of power

The joint force need not abandon its traditional strengths; rather, it ought to smartly evolve its approaches to incorporate all instruments of power to expand access, fuel understanding, and generate a range of options regardless of location within the competition continuum. Increased training and education on the nature of authorities and tools that the various instruments of power can bring to the fight is critical for joint leaders. In this way, entities like the State Department or Intelligence Community do not simply represent “concurrence” boxes that must be checked to get military operations approved. Rather, they can be incorporated as partners that offer unique access vectors, diverse understanding, and a variety of tools to support or be supported by military actions, whether at the tactical, operational, or strategic levels. As described in this framework, adopting this change bolsters the joint force’s capability to target within any domain, and similarly expands the nature of effects, fires, and actions available to achieve desired outcomes.

Joint Interagency Task Forces (JIATFs) exemplify this approach and could be scaled to enable joint targeting and effects generation. Scaling a similar approach to that of the JIATF, however, requires cultural adaptation. JIATFs are tailor-built to address singular problems and combine multiple instruments of power—and their accompanying authorities and capabilities—under a single chain of command to create unity of effort. However, unity of effort does not necessitate unity of command: The joint force can lead the integrated deterrence effort without being in charge, and it often does play a supporting role to its interagency counterparts. This requires senior leaders to establish a culture that moves beyond “coordination” and “deconfliction” and toward “collaboration.” Increased organizational trust, built upon real-world operational experiences, will increase trust both across departments and in the disparate datasets produced across the instruments of power, ultimately amplifying the predictive capabilities of the AI architecture this framework is reliant upon. Moving toward collaboration is similarly critical as it pertains to enhancing the aggregate power among allies and partners.

Embracing the global nature of problem sets

The joint force must also embrace the concept of a global, multi-domain contact layer. When viewing the world solely through the lens of armed conflict, the joint force focuses narrowly on Russia in Europe and the PRC in the Indo-Pacific. Targeting and effects generation in Latin America, Africa, or the Arctic are then insufficiently regarded as supporting, complementary, or niche efforts rather than as potential key components of integrated deterrence. Many operational efforts—such as security force assistance, building a partner’s combat capability, gaining access, and illuminating vulnerabilities of an adversary’s capabilities—require significant time and resource investments. Senior leaders must understand why, for example, a multiyear effort to gain placement and access in Equatorial Guinea fits within the global campaign to counter PRC malign influence; otherwise they will be less likely to resource it (in this case, Equatorial Guinea is a candidate for the establishment of what would be the PRC’s first Atlantic naval base).²³ As such, combatant commanders who lead global campaign plans, such as the global campaign plan for China, should prioritize regularly communicating their priorities to other combatant commands when activities take place in another geographic area of command. This is especially important when activity falls under the authority of a different combatant command.

Generating senior leader understanding is a by-product of cultivating a joint force that thinks with a competitive mindset. As former Chairman of the Joint Chiefs of Staff General Joseph F. Dunford recognized, the United States “think[s] of being at peace or war…our adversaries don’t think that way.”²⁴ Altering the “peace or war” mentality to a deeper understanding of activities across the competition continuum—and adopting a strategy of proactive targeting harnessing all instruments of power—is necessary to simultaneously deter aggression and effectively prepare for conflict. Combatant command force structure changes; intergovernmental professional training, education, and exercises; and in-garrison and deployed intergovernmental cross-pollination are beyond the scope of this paper but are among concepts worth exploring to enable cultural changes at scale.

Technology and data: Building a resilient and holistic data architecture

The DOD must build a robust and extensive data architecture, fusing private sector data with government data, and build frameworks and standards to harness it into actionable information. Data fuels everything from access and understanding, to options, targeting, and analysis, to predictions and recommendations. For data to be usable, however, it must first be accessible. Accessibility must occur at echelon given the nature of CDO environments and the expectation that severed links between the tactical edge and higher headquarters elements will be the norm, not the exception.

The joint force needs a data architecture in line with, and as a central component of, the JADC2 concept that aggregates data from all sensors across all domains to enable a proactive framework for targeting and effect. The architecture must encompass the tactical edge, fusing commercial and government-procured data across a spectrum of classification levels. In line with the DoD Data Strategy, such an architecture must make data visible, accessible, understandable, linked, trustworthy, interoperable, and secure.²⁵ The DOD must involve the private sector in the process of building this architecture and consider how interoperability standards and technologies can be integrated and kept up to date. Not only will this help the joint force accelerate the PED cycle and act on intelligence, but it will also allow the joint force to operate across the scale of attribution to mitigate the operational and counterintelligence risks inherent to strategic competition.

Moreover, the joint force must explore how classified intelligence can safely be used to facilitate AI/ML algorithmic training. Otherwise, it may inadvertently incur risk to sources, methods, or exquisite platforms. Alternatively, with the appropriate mechanisms, AI/ML algorithms can be trained to reach similar conclusions as classified analysis using only open-source data. This will greatly enhance the joint force’s ability to export capabilities to allies and partners without concern for security-sharing agreements or classification obstacles.

Authorities, rules of engagement, and risk: Updating DOD guidelines and standards

DOD guidelines and standards must be updated to harness all tools of national power and to enable combatant commands to prioritize global issues alongside their regional areas of responsibility. For distribution of data to achieve the desired effect, the joint force must explore changes in the distribution of authorities, rules of engagement, and the nature of assessing risk. While a lack of authorities is frequently cited as a barrier to accomplishing operational activities, it is often the cumbersome means by which to access existing authorities that stands in the way. If a joint force commander (JFC) can exercise kinetic strike authority at their level but require permission from several echelons higher to execute information operations, the JFC will increasingly rely on kinetic effects. Authorities often lack clear processes by which subordinate commanders can quickly access them. Similarly, when authorities are reserved at the highest echelons, the approval authority is farthest removed from the problem, lacks adequate understanding, and often leads to excessive risk aversion. This plays out with the array of authorities germane to the joint force and will only become more complex and burdensome when expanding the aperture to include other instruments of power. At a minimum, when the National Command Authority delegates authorities to combatant commanders, there ought to be a standardized and coherent process by which subordinate echelons of command can access them efficiently. Additionally, an effective JADO/JADC2 operating environment that collects, disseminates, and harnesses data requires more effective coordination across the US services and manufacturers. The development of standards must be pursued to advance capabilities that are interoperable across the joint force and with US allies. Doing so will help improve the speed and precision of the targeting cycle.

Second, streamlining the approach to accessing authorities goes hand in hand with updating the joint force’s rules of engagement. These concepts help mitigate the concerns around disparate joint force elements operating with degraded or nonexistent contact with higher headquarters elements. Rules of engagement allow for commanders to lead through intent instead of specific guidance, facilitating more rapid and creative localized targeting and effects generation. Distribution of authorities and associated rules of engagement could transform a unit’s guidance from “employ electronic warfare (EW) effects against Russian ORLAN-10s” to “disrupt Russian ISR below 5,000 feet AGL.” The former is prescriptive and limiting; the latter is intent based, provides greater flexibility, and informs the necessary capabilities for the tactical edge to operate autonomously for longer periods of time.

Finally, the department must rethink the way it assesses risk in light of integrated deterrence and a global contact layer. Making informed decisions on risk management is a key underpinning of this framework. Yet, risk assessments are traditionally conducted in a temporal manner: the risk associated with a particular activity, in a particular location, with a particular target. Risks associated with strategic competition are not, however, suited to traditional ways of thinking. Competing with adversaries across a global contact layer requires considering how local risk ties into strategic risk, whether that be transregional or trans-domain. This is further complicated by the imperative to effectively prepare the joint force for combat. If, for example, a particular PRC capability presented a significant problem for the joint force’s ability to execute a contingency response plan, significant investment may be required to mitigate the threat. This may lead to a scenario in which the joint force assumes greater risk elsewhere in the globe to gain access to locations where the PRC has proliferated similar capabilities to increase understanding and develop options for use during crisis. A similar situation could arise where the joint force makes the decision to reveal a capability it would otherwise hold in reserve to complicate an adversary’s decision-making and risk calculus, thus enhancing deterrence. Maturing the joint force’s ability to assess risk in this manner must begin with data-informed understanding, shared consciousness, and unity of effort across all instruments of power.

Conclusion

Cultivating a joint force that enables and supports a whole-of-government approach to integrated deterrence is a daunting yet achievable vision, requiring transformational leadership to achieve. “Humans are more important than hardware,” and how leaders harness the joint force’s enduring strategic advantage of human capital will dictate whether success is achieved.²⁶ This paper has outlined a vision to update the way the joint force conducts targeting and effects generation for an era of strategic competition. Evolving the joint force’s model for targeting and effects will require adopting a mindset shift that sees competition as key to setting the conditions for, and ideally avoiding, armed conflict. To truly operationalize integrated deterrence, the joint force must embrace targeting and effects across the competition continuum, leveraging the range of tools at its disposal across its domestic and international counterparts, and avoiding a solely military or kinetic lens. Moreover, through the power of AI, the DOD can harness data for effect and fuel the proactive, continuous, and global campaigning required for integrated deterrence.

Sponsored By

This report was generously sponsored by Lockheed Martin Corporation. The report is written and published in accordance with the Atlantic Council Policy on Intellectual Independence. The authors are solely responsible for its analysis and recommendations. The Atlantic Council and its donors do not determine, nor do they necessarily endorse or advocate for, any of this report’s conclusions.

About the authors

Gen James E. Cartwright, USMC (ret.)

Former Vice Chairman of the Joint Chiefs of Staff, US Department of Defense

Fellow

Justin M. Conelli

Senior US Air Force Fellow

Scowcroft Center for Strategy and Security

Afghanistan National Security

Staff

Clementine G. Starling

Director, Forward Defense

Forward Defense Scowcroft Center for Strategy and Security

Security & Defense NATO

Staff

Julia Siegel

Associate Director

Forward Defense Scowcroft Center for Strategy and Security

Security & Defense

The views expressed in this academic research paper are those of the author(s) and do not reflect the official policy or position of the US government or the Department of Defense. In accordance with Air Force Instruction 51-303, Intellectual Property—Patents, Patent Related Matters, Trademarks and Copyrights, 1 September 1998, this research paper is not copyrighted but is the property of the United States government.

Forward Defense, housed within the Scowcroft Center for Strategy and Security, generates ideas and connects stakeholders in the defense ecosystem to promote an enduring military advantage for the United States, its allies, and partners. Our work identifies the defense strategies, capabilities, and resources the United States needs to deter and, if necessary, prevail in future conflict.

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Shortening the review process for transmission projects and renewable interconnection to the grid is critical for accelerating the United States’ clean energy transition. Transmission lines take an average of five to ten years to build, largely due to the complex patchwork of stakeholders and permitting authorities involved in the review process. In addition, of the 2,000 gigawatts (GW) of generation capacity awaiting connection to the US transmission system, natural gas accounts for only 85 GW and coal merely 1 GW—the rest are zero-carbon technologies.

The critical permitting bottlenecks holding back the energy transition involve securing access to and approval of new transmission lines and the interconnection of new renewable projects to the grid. The legislation in the bill does not address either subject and will do little to clear the blockages in the permitting queue. To meet climate targets, legislators must adopt additional measures that are specific to transmission and renewable interconnection.

Completion of the Mountain Valley Pipeline
The Mountain Valley Pipeline, the most contentious of the provisions included in the bill, will proceed with development and could be completed as early as the end of this year. Some approve of the pipeline’s completion for its potential economic and energy security benefits, while others condemn its negative environmental impact. Construction on the pipeline is already 94 percent complete, but the impact on the environment and indigenous communities remains an open issue.

The Builder Act

The debt ceiling deal includes the Builder Act, which introduces reforms to NEPA that impose time limits on environmental reviews unless the project sponsor and agency agree to extend, designate a lead agency to coordinate federal project permitting, and allow project sponsors to conduct the NEPA study themselves, subject to agency review. In addition, the act revises language within the original NEPA legislation, requiring agencies to consider only environmental effects that are “reasonably foreseeable” and alternatives that are “technically and economically feasible,”  potentially constraining which environmental impacts and alternatives a company must evaluate.  Whether the updated legal language will result in a less comprehensive consideration of alternatives will be revealed in future litigation. Finally, the act shortens the length of NEPA documents, although the page limits do not apply to appendices, which could minimize the effects of this reform.

The provisions in the act that set time limits on the preparation of Environmental Impact Statements (EIS) and Environmental Assessments (EA) will shorten the federal review process but will not resolve the state and local jurisdictional issues that also hinder project deployment. Currently, it takes on average four-and-a-half years to complete an EIS. The Builder Act creates a two-year deadline for completing an EIS and a one-year deadline for an EA. The lead agency can extend the deadline in consultation with the project applicant but must complete the process within ninety days of a court order after the deadline. Projects, however, are not automatically approved if the timeline is not met, and significant barriers remain related to agency staffing to meet the shortened deadlines, an issue neglected in the debt ceiling reforms.

Contrary to widely expressed fears, these changes are unlikely to affect the integrity of the NEPA process. NEPA statements remain subject to the same judicial review as they were before the amendment, and if its conclusions are unsound, a reviewing court will send the NEPA document back to the agency for further review. The reviewing agency must still scrutinize any documents submitted by project sponsors and is responsible for final approval. If short deadlines prevent rigorous analysis from being completed, the NEPA document would not likely stand up in court. The environmental community, civil society, and businesses can still add comments or additional information to the administrative record but now have less time to review and comment on EISs and EAs, putting more pressure on interested parties to move swiftly.

Interregional Transmission Planning Opportunities Study

NEPA is not the biggest barrier to the rapid buildout of transmission and renewable infrastructure. The uncoordinated patchwork of federal and state permitting agencies involved in approvals, asynchronous review processes that stretch permitting times, and the Federal Energy Regulatory Commission (FERC)’s lack of direct authority over transmission wires—in contrast to its authority over natural gas pipelines—play a much more significant role in holding back project development. In addition, disagreements about cost allocation have proven formidable obstacles to building transmission and getting new renewable projects onto the grid.

These barriers are being studied extensively. The US Department of Energy (DOE) is conducting a National Transmission Planning study to be released this summer. FERC also issued a Notice of Proposed Rulemaking (NOPR) in April 2022 to improve regional transmission planning and cost allocation procedures. Instead of using these and other studies to inform legislation, the Builder Act directs the North American Electric Reliability Corporation (NERC) to conduct an interregional transmission planning opportunities study that will be published within eighteen months of the bill’s passage, followed by a year of public comment. FERC will then recommend statutory changes subject to their own review timeline.

Congress, FERC, and other federal agencies should not wait for completion of the NERC study.  Instead, they should act using completed studies and the results of the DOE and FERC processes when considering additional transmission permitting and planning reform, as the infrastructure is needed as soon as possible. A Princeton study estimates the grid will need to expand by 60 percent by 2030 and triple in size by 2050. Building 60 percent more electricity transmission infrastructure within four years, starting in 2026 after the NERC study’s completion, is not feasible.

Permitting streamlining for energy storage

The bill also adds energy storage to the list of “covered projects” under the Fixing America’s Surface Transportation (FAST) Act, which improves federal-state coordination and enshrines tangible deadlines for review, but can pose additional eligibility criteria and procedural requirements that do not make the process simpler. Project proponents are subject to restrictions on review period extensions and must interpret new terminology in consultation with agencies to ensure compliance with the program. Overall, including energy storage projects under FAST-41—named after Title 41 in the FAST Act—is a welcome development. Such programs should be expanded but must be supplemented with reform of the standard permitting process.

Recommendation for permitting reform

The permitting reforms in the agreed legislation will not affect the integrity of the EIS and EA processes, despite concerns from the environmental community. However, they fail to address the substantive permitting issues related to transmission and interconnection that investors and developers face today. Bills that address primarily oil and gas leasing and permitting are counterproductive to both the permitting discussion and energy transition goals. Legislators must work together and compromise to address permitting issues.

This article is the first in a series on EnergySource discussing permitting reform in the United States. The next article will examine opportunities for permitting reform after the debt ceiling bill.

Ken Berlin is a senior fellow and the director of the Financing and Achieving Cost Competitive Climate Solutions Project at the Atlantic Council Global Energy Center.

Frank Willey is a project assistant at the Atlantic Council Global Energy Center.

Meet the authors

Fellow

Ken Berlin

Senior Fellow

Global Energy Center

Chinese Climate Change & Climate Action

Staff

Frank Willey

Project Assistant

Global Energy Center

Energy & Environment French

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NATO Secretary General Jens Stoltenberg summed up the problem last week. “So far allies have depleted stocks to be able to support Ukraine—that’s not a sustainable path so we need to ramp up production to fill these new and more ambitious targets,” he explained. The will to support Ukraine for “as long as it takes” is there, but the capacity to deliver support while also defending NATO members is also needed.

According to the Kiel Institute, Ukraine has received more than seventy billion dollars in military aid since Russia’s full-scale invasion started on February 24, 2022. While this figure is large and the aid has contributed to Ukraine’s ability to resist and later repel the Russian invasion, Ukrainian forces need more ammunition and equipment to finish the job. However, the countries supporting Ukraine are struggling to produce enough vital defense materiel. Ukraine is burning through ammunition a lot faster than NATO countries currently manufacture it. 

Massive industrial bottlenecks in manufacturing of artillery shells and related equipment, if unresolved, threaten to undermine efforts to help the Ukrainians push out the invaders. Stoltenberg has dubbed it a “race of logistics,” and more than Ukraine’s future is at stake. The readiness of US and allied militaries is put at risk by ineffectively designed supply chains, cumbersome process-focused procurement, and political wrangling. This incapacity to replenish allies’ ammunition stocks and equipment undermines the deterrence posture of NATO as a whole. 

Similarly, the US defense industry has been slow to deliver enough munitions to Taiwan as it faces increased saber-rattling from the People’s Republic of China. A recent report by Seth G. Jones at the Center for Strategic and International Studies estimates that, in the event of a conflict in the Taiwan Strait, the United States would deplete certain long-range munitions in less than a week. As allies such as Australia and Japan start to ramp up defense spending, the US defense industry will need to deliver more weapons to meet the increasing demand. 

In Europe, the defense industry revival is not fairing any better. In May, after weeks of negotiations, the European Union (EU) announced a one-billion-euro initiative to procure ammunition for Ukraine “via the European Union industry and Norway.” This initiative, however, has faced multiple stumbling blocks and delays as certain countries have prioritized defending the interests of national industries and using protectionist measures to purchase ammunition only from European companies. EU leaders appear to have decided to move forward, but it is clear that both the structure of the initiative and its lack of scale will not solve the long-term underinvestment issues in Europe. This is despite the level of ambition outlined in the EU’s Strategic Compass for Security and Defense last year and important progress made on the issue since.

What can be done?

Looking to history, the urgency and unity shown as allied—primarily US—industry mass produced equipment for World War II is nowhere to be found in today’s production process. The Atlantic Council’s Thomas S. Warrick recently advocated for “the Department of Defense to shift procurement to a wartime footing.” However, even short of this proposal, the United States and its allies and partners can nonetheless launch a coordinated effort to overcome industrial and bureaucratic constraints. It also must include both the governments and heads of industry responsible for stocking any future arsenal of democracy.

Representatives from the defense industry have already been invited by NATO to participate in a meeting of defense ministers in Brussels later this month. However, more is needed. The Vilnius summit in July is an important opportunity to further advance engagement with the defense industry, which NATO can do by holding an official side event for government officials to meet with the chief executive officers of the defense industry. Here they could all get on the same page about the true urgency of inadequate defense value chains. Defense contractors would benefit from direct awareness-raising conversations at the highest political level. In exchange, policymakers would benefit from hearing directly from defense contractors about what policies are necessary to streamline their production processes.

This would be taking a page out of Japan’s playbook. On the eve of last month’s Group of Seven (G7) Hiroshima summit, seven of the world’s largest semiconductor makers met with Japanese Prime Minister Fumio Kishida in Tokyo to discuss plans to significantly increase Japan’s chipmaking capabilities. The unprecedented meeting demonstrated a concerted effort between the private and public sectors to reshape global commercial supply chains as tensions with China continue to grow. 

Productive collaboration with the defense industry is essential not only for replenishing stockpiles and maintaining a steady supply of armaments, but also for addressing a wider range of future concerns, spanning from information sharing to cybersecurity and resilience. Developing a strong partnership with the defense industry will be vital for advancing in these areas. So, where might this collaboration start?

First, NATO’s Vilnius summit will be the second time in a row when Asia-Pacific partners are participating, offering opportunities to look into diversifying supply chains across Europe and North America and into the Indo-Pacific.

Second, allies need to rethink process-centered procurement, which avoids rather than manages risk and consumes massive financial and time resources rather than promptly delivering what is necessary. Anyone who has ever dealt with the notorious procurement schemes will agree that change is impossible without forceful political will. In Vilnius, heads of the defense industry and NATO member states could commit to pursue new and specific orders and deliverables, the fulfillment of which could help reorganize or override currently inefficient procurement processes.

Third, to truly empower NATO’s innovation efforts, such as the Defense Innovation Accelerator for the North Atlantic and the NATO Innovation Fund, industry leaders must commit to advancing these nascent initiatives. As disruptive technologies mature and become essential for future defense capabilities, a closer collaboration between the private sector and governments is needed to bridge the investment gaps and avoid the “valleys of death,” in which small but high-potential companies are left in limbo between initial development and production. In order to maintain technological edge and bring more companies and innovation into the defense space, NATO needs to boost investment in cutting-edge technologies and make its innovation cycle more efficient and robust.

The task of rebuilding the arsenal of democracy is a complex multi-stakeholder endeavor. What is required is a robust no-nonsense collaboration between an industry that can deliver and governments that can lead with political decisions to enable relevant industrial policies. Vilnius is a great place to start.

Giedrimas Jeglinskas is a nonresident senior fellow at the Transatlantic Security Initiative in the Atlantic Council’s Scowcroft Center for Strategy and Security. He was previously assistant secretary general for executive management at NATO and deputy minister of defense of the Republic of Lithuania. 

Viltaute Zarembaite is a visiting fellow with the Transatlantic Security Initiative at the Atlantic Council’s Scowcroft Center for Strategy and Security. She is also a career diplomat at the Ministry of Foreign Affairs of the Republic of Lithuania. These views are her own and do not reflect those of the Ministry of Foreign Affairs of the Republic of Lithuania.

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Export controls are often thought of for their role in preventing the transfer of arms and other sensitive technologies to malign actors, or as a foreign policy tool used alongside economic sanctions to punish illegal activity. This was the angle taken at the G7 with specific reference to Russia and China, but that viewpoint obscures a different problem. The United States’ closest allies have been quietly frustrated for decades that the indiscriminate and extraterritorial application of these same export controls, in particular the International Traffic in Arms Regulations (ITAR), seriously hinders efforts to share technologies and collaborate with allies on capability development projects. This is due to the costly and time-consuming processes associated with ITAR compliance. But this isn’t just a time-versus-cost-versus-quality issue for program managers to deal with. It’s much bigger than that. As William Greenwalt, a nonresident senior fellow at the American Enterprise Institute, has said, “US government security policies related to export controls no longer support long-term national security interests and if not modified will likely result in the US military falling further behind in the competition with China.” ITAR was enacted during the Cold War, at a time when the United States enjoyed such technological and industrial dominance over its potential adversaries that it could afford to go it alone, write off allied contributions to military capability development, and absorb the consequences in time and cost when they did choose to partner up. None of those things are true anymore.

The Department of Defense has long recognized that it no longer holds complete technological advantage and recent administrations of both parties have promoted the critical role of allies and partners in their national security strategies. Yet ITAR directly prevents the United States from accessing some of the best allied technology and indirectly reduces the military capabilities of its allies. For example, the UK government estimated in 2017 that it costs UK companies almost half a billion dollars a year to comply with ITAR. That’s effectively a 0.7 percent tax levied by the United States on the national defense budget of a close ally, and money which could be far better spent on increased readiness or on more advanced capabilities that would benefit the United States. After all, depending on exchange rate fluctuations and production lot, half a billion dollars equates to four or five F-35B fighter jets. Even worse, that figure only covers those companies that have the resources and risk appetite to work with the United States in the first place. So-called “ITAR taint,” the risk that any technical cooperation with US entities will lead to the loss of control over their technology, prevents some non-US companies from engaging at all. Data is anecdotal as it mainly comes down to internal bidding decisions by individual companies, but it seems that small and medium size enterprises are especially affected. These are exactly the sort of cutting-edge companies that the United States needs in its corner on everything from quantum computing to materials science.

A focus for discussions at the White House

You would think that with such an obvious downside it would be an easy fix, but no. Unfortunately for the Department of Defense, it doesn’t own ITAR policy or its implementation. The State Department does, and it does not feel the pain of delayed programs and degraded technological advantage. Despite the efforts of many talented and hardworking officials who have dedicated their careers to keeping the United States’ most critical technological advancements out of enemy hands, the organizational incentives are not structured to support the pace or flexibility that modern technology and the current geostrategic and security situation demand. The outdated systems State Department officials are working within have become a mechanism of national self-harm and, at the end of the day, it is the warfighter that loses out.  

The good news is that the right people in the legislative and executive branches of the US government are starting to take notice of the problem, particularly in the context of the nuclear submarine deal involving Australia, the United Kingdom, and the United States, known as AUKUS. To date, much of the press about AUKUS has been on the trilateral effort to support Australia in acquiring conventionally armed, nuclear-powered submarines under Pillar One of the agreement. Arguably though, it is the wider cooperation in critical technologies such as artificial intelligence, autonomy, cyber, and electronic warfare envisaged under Pillar Two that represents the real generational opportunity. Behind the scenes, officials and politicians in all three nations are realizing that Pillar Two just won’t stand with ITAR as it’s currently enforced. This is driving unprecedented interest on Capitol Hill, where congressional Republicans in the House and Senate are leading efforts to force the State Department to address the problem. They are advancing the fantastically named Truncating Onerous Regulations for Partners and Enhancing Deterrence Operations (TORPEDO) Act. To quote Senator Jim Risch (R-Idaho), the ranking member of the US Senate Foreign Relations Committee, this legislation “aims to speed up the implementation process by reforming the US regulatory system so we can cooperate in a timely and efficient manner on the capabilities we and our partners need.” This is extremely welcome, but in the complicated world of export controls reform the story begins with legislation but it doesn’t end there. Previous attempts at reform, such as the 2016 legal expansion of the National Technology Industrial Base and the 2022 Open General License pilot program, have stumbled on implementation issues which can only be fixed from within the State Department and will require coordinated action between the executive and legislative branches.

This is where Sunak and Biden should focus their discussions. With his reputation for pragmatism, Sunak should easily avoid the temptation to request a blanket ITAR exemption for the United Kingdom as this would be politically unpalatable and counterproductive. Biden, with his flagship foreign policy initiative in the balance, should commit to work with Congress on a bounded and enforceable exemption under the Arms Export Controls Act for AUKUS nations, and then incentivize the State Department to make it work in practice. Collaboration with longstanding allies and partners is critical to the United States’ success in combating the increasingly dynamic threat posed by its adversaries. To let that flounder on account of an out-of-date and inappropriately enforced export control regime should be an unacceptable outcome for all involved.

Deborah Cheverton is a visiting senior fellow in the Atlantic Council’s Forward Defense program within the Scowcroft Center for Strategy and Security. Cheverton is a career civil servant from the United Kingdom’s Ministry of Defence (MOD), where she has spent almost fifteen years working across a range of policy and delivery areas with a particular focus on science and technology policy, industrial strategy, capability development, and international collaboration. She writes here in her personal capacity as an Atlantic Council fellow, not in an official government capacity. Her views are her own.

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The tiny country of 3.6 million, wedged between Romania and Ukraine, imports 100% of its natural gas, 99% of its oil, and relies on a single power plant in Russian-controlled separatist region Transnistria for 80% of its electricity. Russia’s Gazprom owns 51% of Moldovagaz, the country’s natural gas monopoly. There is almost no foreign investment in the energy sector, and what little there is has found the country unworkable. This was a difficult situation before Russia’s full-scale invasion of Ukraine. It is now untenable.

Ukraine has traditionally supported Moldova, at least commercially if not altruistically, as have other countries, but with the war ongoing to the east and a still unfolding global energy crisis, the need to become self sufficient is paramount. To fortify Chisinau, the international community must get serious about helping Western-educated Moldovan President Maia Sandu and her government achieve energy independence. For its part, Chisinau must reform its commercial and rule of law institutions to become attractive to foreign energy investment, and it must allow investors to function there.

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The international community has been involved in ongoing efforts to support Moldova’s energy sector. For example, the US government has given a total of $40.5 million in energy-related funding plus $30 million in budget support “to help ameliorate the energy crisis” since the Russian invasion of Ukraine. On February 24, 2023, the US announced an additional $300 million in energy support for Moldova. The EU has been similarly supportive, as have international finance institutions including the EBRD and the World Bank.

So far, this money has gone mostly to “capacity building” and technical assistance instead of structural reform, an approach that has proved ineffective. Critics have likened it to the proverbial pouring water into a leaky bucket. To some extent, it’s a problem of where to start when so much needs reform and restructuring. But the failure is also due to a focus on lower level changes, giving Moldova’s energy sector the equivalent of an oil change when a new engine and transmission system are required.

What is needed is a wholesale restructuring of Moldova’s energy sector to free it from legacy Soviet inefficiencies, and from modern Russian meddling. A few clear priorities should be construction of a power plant that is not within the breakaway region of Transnistria; ending Gazprom’s stranglehold on Moldovagaz, or if that is not reasonably achievable, breaking existing Moldovagaz contracts and establishing an alternative natural gas supplier; building Moldova a power market; and broadly, diversification of the energy mix.

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Despite political will since Sandu came to power and especially since the new government was seated in February 2023, critically with a new energy minister, Moldova has demonstrated little wherewithal to tackle these tasks. One big obstacle is money. Chisinau is living “paycheck to paycheck,” hence the annual emergency bailouts and budget support from Western governments, and emergency gas supplies from Ukraine. In this constant state of energy emergency, there has proved little capacity to learn to fish versus begging for fish. Structural reforms that, for example, empower an alternative agency to be the vehicle for natural gas contracts at the expense of Moldovagaz, could help break the cycle.

But to do this, Moldova needs money. Rather than being treated like a charity case with annual emergency bailouts from foreign governments which are counted on desperately every year but which are never guaranteed, the country needs to attract foreign investment to fuel its energy overhaul and solidify it. Only once private capital buoys Moldova’s energy sector will the country be able to earn the regular taxes and royalties necessary to build its own energy independence.

This is where Moldova has stood in the way of its own reform. Although under Sandu the perception of Moldova regarding corruption has improved, many barriers to foreign investment remain. The country ranks 48th on ease of doing business, with notably lower scores for contract enforcement and dispute resolution, two issues critically important to potential investors. It ranks 58th for rule of law adherence. A warmer welcome to private energy investors could be conceived.

Meanwhile, most of the few companies who have braved investment in the Moldovan energy sector have paid dearly for it. In 2016 Gas Natural Fenosa, a Spanish company and Moldova’s largest supplier and distributor of electricity, sued the government over “discrepancies” in electricity tariffs that cost it over €20 million. The EU Energy Community eventually brought a dispute against Moldova over the issue. In 2021, the Court of Justice of the European Union issued a final decision in Moldova v. Komstroy, a case arising from a Moldovan state-owned entity default on electricity contracts with a Ukrainian company. The private investor was left empty handed.

Currently, the Moldovan government is being sued by the largest private gas company in the country, Rotalin Gas Trading, the only private competitor to Russian controlled Moldovagaz, for gas tariff irregularities that are forcing it out of business. Rotalin claims to have lost many millions over two decades. These are just a few examples, and a fair warning to potential investors.

The merits of any of these disputes aside, any reasonable investor would understandably hesitate before risking money in the Moldovan energy sector. What amounts to an appearance of hostility to foreign investment and a lack of adherence to contracts must be overcome before private capital will seriously consider Moldova. Furthermore, if Chisinau is going to make a credible argument that it is being manipulated and abused by Gazprom, it must not appear to be doing the same to private energy investors in Moldova.

Until private investors enter the market in force, Moldova will be left at the mercy of generous foreign governments, which in turn will continue providing emergency assistance instead of actual, sustainable reform. Only private capital can break this cycle, and it needs to be able to turn a profit, however meager, before it will.

Suriya Evans-Pritchard Jayanti is a nonresident senior fellow at the Atlantic Council’s Eurasia Center.

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