Diplomacy & Crisis News

The race to be the next supreme leader will be chaotic and perilous.

Beijing may be an appealing partner, but that doesn’t mean the region is breaking with Moscow.

Failing to raise the debt ceiling could have global economic repercussions.

Insight into the relationship between the Russian government and former U.S. president Donald Trump was recently provided by a list of Americans that Moscow is sanctioning as retaliation for American sanctions on Russia because of the latter’s invasion of Ukraine. Among the 500 Americans on whom Russia is placing travel and financial restrictions are some who have nothing to do with setting policy toward Russia, are unlikely to have any dealings with Russia at all, and whose only common trait is that Trump considers them adversaries. These include: Brad Raffensperger, the Georgia secretary of state who resisted Trump’s pressure to alter the results of the 2020 election; Letitia James, the New York attorney general who is suing Trump for business fraud; and Jack Smith, the special prosecutor who is investigating multiple possible violations by Trump of federal law. The Russia list even includes Michael Byrd, a Capitol Police officer who shot a rioter who was at the front of one part of the pro-Trump mob that attacked the Capitol on January 6, 2021.

The sole plausible explanation for Russia’s inclusion of such people in its sanctions list is that Moscow had a stake in Trump gaining and maintaining power in Washington and today has a stake in him possibly returning to power.

The full scope of exactly what that stake entails is unknown to anyone but Trump and the Russians, and that is part of the problem. We don’t know because there has not been a full, unimpeded counterintelligence investigation of Trump. The investigation by former special counsel Robert Mueller was limited in scope to Russia’s interference in the 2016 U.S. election and Trump’s obstruction of inquiries into that interference, and by a policy decision not to do criminal investigations of a sitting president. The Federal Bureau of Investigation is the agency that would be responsible for a counterintelligence investigation. But what steps the Bureau has taken to fulfill its responsibilities in this regard have not only been impeded but also met by a full-blown political attack aimed at discrediting the FBI and anything it might uncover.

It is highly likely that even before Trump first descended the escalator at Trump Tower and announced his candidacy for president, Russian security agencies had identified him as a promising “developmental,” as intelligence services term such prospects. The Russians already were familiar with Trump from his business dealings in Russia. In the United States, Trump was well-known, had a following, and showed political ambition. He was wealthy but also had money problems, as manifested in his multiple business bankruptcies. He lacked ethical scruples. His disjointed personal life provided additional angles the Russians could work. The mere possibility of Trump as a future agent of influence provided ample grounds for Russia to keep his case open.

Exactly what angles the Russians have worked and what vulnerabilities they may have exploited are part of what is unknown. Some of the more salacious possibilities, involving alleged conduct during visits to Russia that most people would find embarrassing, probably did not constitute a vulnerability for Trump. His salacious behavior in the United States has not seemed to hurt him politically, and he even boasts about it. A more workable angle has been pecuniary and has involved Trump’s business objectives, such as building a skyscraper in Moscow—an objective that, as Mueller found, Trump was still pursuing even after he announced his candidacy for president.

If Donald Trump were an ordinary applicant for a position somewhere in the U.S. national security bureaucracy that required a security clearance, it is unlikely he would have received that clearance. There was ample reason to disqualify him on what security adjudicators call suitability grounds, including the bankruptcies and multiple accusations of sexual misconduct. If that were not enough, then the business connections with Russia would be a disqualifier.

If, despite those huge red flags, Trump had somehow slipped through the clearance gauntlet, he would have come to be regarded as just as much of a security error as Jack Teixeira, the Massachusetts airman who freely shared classified information to impress his online buddies. Like Teixeira, Trump had no compunction about carting off to his home, contrary to U.S. law, piles of classified documents. While president, he tried to impress the Russian foreign minister and ambassador with the classified intelligence he had by showing some of that material to the Russian officials.

Trump’s mishandling of classified information may be coming full circle back to his foreign business dealings. The prosecutors under Smith who are investigating that mishandling recently issued a subpoena for information about Trump’s foreign business ventures since he took office.

But all this and the serious implications of it have been largely shoved out of the public consciousness by a huge, sustained campaign led by Trump’s political party to discredit any investigation of the matter or even any public attention to it. The initial motivation for that campaign was to neutralize the stigma of foreign influence associated with Trump’s Russia-aided 2016 election victory. The campaign has taken multiple forms, including the intentional mischaracterization by Trump attorney general William Barr of Mueller’s findings, Jim Jordan’s committee on supposed “weaponization” of law enforcement and security agencies, and Barr’s appointment of John Durham as a special prosecutor with the mission of trying to find something—anything—wrong with the FBI’s earlier investigation of matters involving Trump and the Russians. Durham’s investigation was a four-year, $6.5-million-dollar dud. Far from finding the sort of politically motivated deep state effort to defame Trump that Barr had suggested would be uncovered, Durham was a loser in the courtroom, and his recently issued final report was reduced to applying to the FBI the kind of hindsight-laden criticisms that can be found in just about any report looking back at a difficult government investigation, such as that there was insufficient “analytical rigor.”

In criticizing the FBI for acting based on “raw, unanalyzed, and uncorroborated intelligence,” Durham either misunderstood or, more likely, intentionally misrepresented the Bureau’s work. The FBI necessarily deals with that kind of intelligence all the time. As the organization’s name implies, its business is investigation. Its job is to take available lead information—which by its nature is typically raw, unanalyzed, and uncorroborated—and to investigate to determine what can be corroborated and what cannot, and what is true and what is not. When the lead information points to a possibility as serious as a hostile foreign regime’s influence at senior levels of the U.S. government, the Bureau would be derelict in its duty if it did not investigate. If no action were to be taken on any information other than what is already neatly packaged, analyzed, and corroborated, then the nation would not need a Federal Bureau of Investigation.

It would be interesting—if this did not prolong further a misappropriation of public funds and attention—to do an investigation of Durham’s investigation and to apply to it the same standards that Durham claimed to apply to the FBI’s work. For example, with regard to “analytical rigor,” on the same page in which Durham asserted that he had found “no evidence” that the FBI had considered how the Clinton campaign’s interest in tying Trump to the Russians might affect the Bureau’s investigation, the report cites a message from a senior FBI official warning his colleagues of exactly that hazard.

The Republican political interest in erasing the whole smelly Trump/Russia story from the public mind has been aided by some on the Left who, evidently motivated by a desire to downplay anything that risks exacerbating U.S.-Russian tensions, also have tried to discredit not only a Trump connection to Russia but the very fact that Russia interfered in the 2016 election on his behalf. Whether the smokescreen is coming from the Left or the Right, the smoke has now been blown so strongly and for so long that “Russiagate” gets repeatedly and casually voiced as a mantra that is assumed to be equatable with a hoax. And the FBI appears to have been browbeaten into not pursuing the subject further.

The fact of the Russian interference, to the benefit of Trump, in the 2016 presidential election is beyond any doubt. The interference has been documented by the intelligence community, the Mueller report, and most thoroughly for the public in a bipartisan report by the Senate Select Committee on Intelligence.

As for Trump’s role and whether there was something warranting investigation, the inspector general of the Department of Justice had already determined, before Durham had gotten very far into his own effort, that the FBI’s investigation of the subject, while its conduct was subject to some legitimate criticism, was indeed warranted.

Even without access to all the material that the FBI and the inspector general had access to, the public has seen enough that ought to justify both worry and further investigation. Recall what is a matter of public record regarding how Trump and his entourage dealt with the Russian interference. Trump publicly urged Russia to hack into his opponent’s emails, and a few days later the Russians did exactly that. Mueller reported that the Trump campaign and members of the Trump family replayed material created by the Russian trolls who were Moscow’s main cyber instrument for interference in the election campaign. The Trump campaign chairman repeatedly met and shared polling data with a Russian intelligence agent. Senior members of the Trump campaign and family met in Trump Tower with a Russian known to have ties to the Russian regime, for the purpose of receiving dirt on Hillary Clinton. And as Mueller determined and documented in his report, Trump repeatedly obstructed investigation of the Russian interference.

Once in office, Trump provided additional reason for suspicion about the nature of his relationship with Moscow, with perhaps the most suspicious thing being how he choreographed his meetings with Russian president Vladimir Putin. In a highly unusual way of handling such meetings, Trump shut out his own staff and officials with responsibilities involving relations with Russia, not even giving them an after-the-fact debrief. After his first meeting with Putin, Trump confiscated his interpreter’s notes and ordered him not to disclose to anyone what he had heard. In other conversations with the Russian president, he used Putin’s interpreter, with no Americans present besides Trump himself. To this day, we do not know what they discussed.

Trump said and did a number of things favorable to the Russian regime while he was in office, including publicly siding with Putin rather than U.S. intelligence agencies when the Russian president falsely denied interfering in U.S. elections. Such sayings and doings represent part of the payoff that Russia has gotten for its investment in Trump. Another big part of the payoff is the exacerbation of political division in the United States and discrediting of American democracy that Trump has done so much to foment. Most or maybe all of this was part of the approach Trump would have taken anyway in his bid for power, but it is a consequence that is in Russia’s interest and very much against U.S. interests.

Trump’s advocacy on behalf of the Russian regime has continued while out of office. Two days before the start of Russia’s brutal war in Ukraine, Trump was calling Putin a “genius” and lauding him for his “smart move” in deploying a “peace force” to the border with Ukraine. Such talk is not explainable in terms of any U.S. grand strategy, Republican foreign policy ideology, or even the culture-war-driven sympathy that some on the American Right have shown for Putin’s anti-woke themes. It becomes explainable only by postulating that there is even more to the relationship between Trump and Russia than has yet come to light.

Today, Donald Trump is the front-runner for the Republican presidential nomination in 2024. Some polls show him going on to win the general election. If he does, Russia may again have an asset in the Oval Office. Because of what is still unknown, the exact nature of the Trump-Russia relationship could be anywhere along a spectrum of the sorts of relations that a foreign power can have with an asset in the United States. On one end of the spectrum is the useful fool, who is not consciously doing a foreign regime’s bidding but acts for his own reasons in that regime’s interests. On the other end is a Russian version of a Manchurian Candidate.

It is inexcusable, in the face of what may be one of the most serious cases ever of malign influence by a foreign power at high levels of the U.S. government, for politicians and commentators acting out of partisan motives—or even the ostensibly noble motive of minimizing U.S.-Russian tensions—to discourage the vigorous investigation that is needed to fill the remaining gaps in this disturbing story.

Paul Pillar retired in 2005 from a twenty-eight-year career in the U.S. intelligence community, in which his last position was as a National Intelligence Officer for the Near East and South Asia. Earlier he served in a variety of analytical and managerial positions, including as chief of analytic units at the CIA covering portions of the Near East, the Persian Gulf, and South Asia. Professor Pillar also served in the National Intelligence Council as one of the original members of its Analytic Group. He is also a contributing editor for this publication.

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Yemen’s vicious civil war, ongoing since 2014, has now claimed close to 400,000 lives. Yet since April 2022, this war, which initially pitted the remnants of the loyalist forces with the backing of a Saudi-led coalition against the Iran-backed Houthi regime in Sana’a, has been frozen due to a temporary ceasefire. Given that the Houthis have established a solid grip over Northern Yemen and control approximately 200,000 troops, it is hard to imagine the scattered loyalists and fatigued Saudis being able to decisively defeat them on the battlefield. As such, negotiations to end the conflict are ongoing, but there is no end in sight.

Meanwhile, the power vacuum opened by the government’s collapse allowed the rise of a third force: the Southern Transitional Government (STC). This entity hopes to reestablish an independent South Yemen and maintains effective control over Aden and the most productive areas of the region. Here, too, reverting to the status quo ante bellum appears unrealistic, and the STC will likely remain the dominant force in the South for the foreseeable future.

The United States, which officially backs the Saudi-led coalition with military and intelligence support, has few interests in Yemen other than stopping the bloodshed and stabilizing the country. Given Washington’s interests and the conflict’s intractable nature, a change in tact is required. To resolve the war in Yemen, a north-south partition of the country is necessary.

Understanding the Yemen Divide

North Yemen gained independence from the Ottoman Empire right after the end of World War I, while South Yemen remained a British protectorate until 1967. The South soon gained Soviet support, while the North grew closer to Saudi Arabia and the West. Aden and Sana’a fought two wars to unify the country until an agreement in 1990 led to a peaceful merger. However, southern separatism became a perennial problem, and tensions reemerged after the Arab Spring.

Interestingly, the current demarcation line between the Houthis and the STC roughly corresponds to the former North-South Yemen international border. Since the Houthi regime controls most of former North Yemen and the STC dominates the southern seaboard, rooting for the losing loyalists makes little sense. The loyalist government has lost control of the country’s most populous and wealthy areas. It still stands thanks only to Saudi support and has no path to victory.

Moreover, the internationally-recognized authorities are notoriously corrupt and show little concern for the Yemeni public’s well-being. The Houthis and the STC are no better, but they are the ones with effective control over Yemen’s core—the country’s future is now in their hands. Reviving the old North-South Yemeni border with a Houthi government in the north and an STC government in the south is Washington’s best bet to end the war for good.

Can America Push for a North-South Divide?

Some may disagree with Washington speaking against respect for territorial integrity. But the United States has broken with this norm in the past. It supported Montenegro’s independence from Serbia in 2006 and Kosovo’s in 2008. Moreover, it recognized South Sudan as a sovereign state in 2011 after it seceded from Sudan. At the end of the day, internationally-recognized borders are just that; a line on the map. Borders are not fixed for eternity, but merely the expression of a certain balance of power at a certain time. The United States accommodated secessionist states in the past and should do it again for South Yemen.

If the United States chose to pursue this diplomatic route, it may find support from its regional allies. The United Arab Emirates supported the rise of the STC and would readily accept a partition of Yemen. Saudi Arabia, too, has an often overlooked but essential security interest in a divided Yemen. The country’s population is almost as large as the kingdom’s, and it is growing quickly. Moreover, a robust unified Yemen could use its oil and gas reserves to kick-start its economic growth, which could in the long-term break Riyadh’s domination over the Arabian Peninsula and be a formidable competitor.

However, Riyadh might resist such a partition plan, as the Saudis have long feared the presence of a pro-Iranian Houthi stronghold on their southern border. Nevertheless, the Saudis are eager to exit the Yemeni war and have come to increasingly acknowledge that the Houthis are here to stay. Additionally, the recent thaw in Saudi-Iran relations has alleviated some of Riyadh’s concerns about Iranian clout.

Still, if diplomacy fails to sway the Saudis, light American pressure might. Washington could leverage its military support; for instance, restricting the U.S. supply of ordnance and spare parts to the Saudi Air Force would limit Riyadh’s ability to bomb the Houthis in the future. This would push Saudi Arabia toward accepting partition and a definitive peace with the Houthis. Yemen is one of the rare ongoing crises where America could reach a relative international consensus. Outside the Middle East, China, Russia, and other major powers have little stake in the Yemeni civil war’s outcome and are unlikely to oppose an American peace plan.

President Joe Biden pledged to end the Yemen war. A partition plan acknowledging realities on the ground appears as the last viable path toward a lasting settlement. The administration stands to lose nothing from trying, and a successful partition would be hailed as a major victory for U.S. diplomacy. Will Biden seize the opportunity?

Dylan Motin is a Marcellus Policy Fellow at the John Quincy Adams Society and a former visiting research fellow at the Institute for Far Eastern Studies. Dylan was named one of the Next Generation Korea Peninsula Specialists at the National Committee on American Foreign Policy and a Young Leader of the Pacific Forum. His research expertise revolves around international relations theory, and his main interests are balance-of-power theory, great power competition, and Korean affairs.

Image: Shutterstock.

Vingt et un mois après la tentative de coup d'État organisée par une fraction de l'armée, 115 000 personnes ont été mises au ban de la société. Certaines sont mortes en prison ; d'autres vivent avec le souvenir des tortures, dans l'attente d'être condamnées à de lourdes peines. La cassure au sein de la (...) / Turquie, Europe, Proche-Orient, Répression, Autoritarisme, Coup d'État, Violence, Police, Justice - 2018/04

Le 19 mars, l'armée turque a pris la ville syrienne d'Afrin, tenue depuis 2012 par les troupes arabo-kurdes des Unités de protection du peuple (YPG). Cette victoire galvanise la propagande guerrière d'Ankara, qui menace d'étendre ses opérations à l'est de l'Euphrate. Allié à l'extrême droite, M. (...) / Europe, Proche-Orient, Syrie, Turquie, Élections, Extrême droite, Kurdes, Nationalisme, Parti politique, Politique, Kurdistan, Répression, Coup d'État, Autoritarisme - 2018/04

L'expression « passions tristes » s'est si largement répandue qu'on ne sait plus toujours qu'elle est empruntée à Spinoza. Cette popularisation d'un philosophe exigeant s'est fortement accentuée ces dernières années. Les analyses et commentaires qui en sont faits, hier comme aujourd'hui, s'inscrivent (...) / Idées, Idéologie, Intellectuels, Politique, Spiritualité, Néolibéralisme, Essai - 2018/04

After Azerbaijan recently opened up its embassy in Tel Aviv, Saadat Sukurova Israelov, the head of the Kanal 24 news outlet, the vice President of Aziz, Azerbaijan’s main cultural organization in Israel, and the chairwoman of the Dona Gracia Center for Diplomacy, is in the process of making a documentary titled “the Great Leader and the Jews,” which speaks about the life of Azerbaijan’s national leader Heydar Aliyev and his relationship with the Jewish people.

“Azerbaijan is the world’s most tolerant country,” she noted.   “We observe this in everyday life.  Jews have been living in Azerbaijan for more than two thousand years.   The Jewish people have established roots in Azerbaijan and anti-Semitism is a foreign concept in the country.   For this reason, Azerbaijani Jews all over the world do everything that they can to promote Azerbaijan in a good way.”

Azerbaijan’s national leader Heydar Aliyev once said, “The Jews have two hearts, regardless which country they live in.   One heart beat for their country and the other one for Israel.”   Aliyev also declared that “Jews can live freely in the land of Azerbaijan.”  

Israelov continued, “In honor of the 100th anniversary of the birthday of Heydar Aliyev, the founder of the independent state of Azerbaijan, and the declaration of 2023 as the Year of Heydar Aliyev, I decided to make a documentary about the life of Heydar Aliyev here in Israel.   As we know, when the modern state of Azerbaijan was established by Heydar Aliyev, a policy of tolerance and multi-culturalism was pursued.   Other religions and beliefs were always respected.”

She stressed that Aliyev went down in the history of the Azerbaijani people as a “savior” of the nation and a “genius.”   She added: “He will always be remembered in the history books as an outstanding politician and statesman.   I believe that the legacy of Heydar Aliyev should always be studied, promoted and applied.”

She concluded: “Because Heydar Aliyev is a great friend of the Jewish people and Israel, I as an Azerbaijani Jew devoted a lot of space to the promotion of relations between Israel and Azerbaijan.  I consider it my duty to carry out the work assigned to me by filming and promoting the documentary ‘The Great Leader and the Jews.’”

In an event hosted by the Azerbaijani Tourism Board in honor of the 100th birthday of Heydar Aliyev, former Israeli Deputy Defense Minister Efraim Sneh declared: “I was the first Israeli official to visit independent Azerbaijan in December 1993.  I was invited to meet the late Heydar Aliyev.   At the end of the official visit, I asked to have a few minutes with him alone.  It was more than five minutes.  We discussed the very sensitive aspects of Azerbaijani-Israeli relations.   I can say with all humility that in this conversation, we formed the Azerbaijani-Israeli alliance that exists till today.”

He continued: “In both Israel and Azerbaijan, there are more people who live outside the homeland than in the homeland.   Both nations are trying to revive their old language to the vibrant language of today.  Similarly, we both live in tough neighborhoods.   Not all of our neighbors are good and it is tough.  Therefore, we know to appreciate our true friends.”

Sneh noted that the late Heydar Aliyev told him “we miss our Jewish brothers who immigrated to Israel.   But one day, Azerbaijan will be so prosperous that they will ask to come back and we are waiting for this.”   He proclaimed: “I remember Baku in 1993.   It was a dark gloomy place.  There is nothing to compare it with the Baku of today.  People call it the Paris on the Caspian or Dubai on the Caspian.”   Sneh recalled that the late Heydar Aliyev, may his memory be a blessing, envisioned that Azerbaijan would reclaim the lands that it lost and that has since come into fruition: “It took a long time, but his vision came true.  Azerbaijan took its natural wealth and turned into a strength of treasure.”

Indeed, Azerbaijan is the wonderful country that it is today thanks to the legacy of Heydar Aliyev.  Turkish Ambassador to Israel Sakir Ozkan stated, “Heydar Aliyev was one of the great leaders of the twentieth century.   His ideas still enlighten those who study national relations and politics, not only in Azerbaijan but around the world.   May his soul rest in peace.”  

His rehabilitation will only encourage more brutality in Syria and elsewhere.

A response to “How Secrecy Limits Diversity.”

If you happened to be waiting for your morning coffee at the Starbucks in the Pentagon, you might not be aware that you are surrounded by what is probably the world’s highest density of strategists. Every year, without fail, thousands of mid-level and senior military officers as well as their civilian counterparts will complete some form of professional education that prepares them to be strategists or emphasizes strategic thinking. But what is the true payoff of all the money the U.S. government spends on “strategic education” aside from all those fancy certificates on office walls in Washington DC? A quick look at the last two decades of American global strategy suggests strategic education may simply have become a rite of passage instead of something to be put into practice.

To be sure, every student who attends a strategic education program is undoubtedly familiar with Prussian military strategist Carl von Clausewitz, who famously wrote that “war is a continuation of politics by other means.” But it seems that two decades of American strategists have forgotten (or worse, never truly absorbed) Clausewitz’s prescient admonition that politicians and military commanders must “recognize the kind of war they are undertaking, neither mistaking it for, nor attempting to turn it into something it cannot be because of the nature of the circumstances.” Our track record certainly leaves much to be desired. Over the past twenty years, the $6 trillion Afghanistan and Iraq debacles were followed by more regime change in Libya, plunging that country into a civil war (and subsequent proxy war) that rages to this day. Western attempts to overthrow Syria’s Bashar al-Assad were blunted by Russian support, ensuring Assad remains firmly in control. American strategy failed to deter Russia from invading Georgia in 2008 or Ukraine in 2014 and again in 2022. Finally, the hawkish consensus emerging in Washington (i.e. a “New Cold War”?) that conflict with China is increasingly likely—if not inevitable—risks excessively securitizing every aspect of the U.S.-China relationship.

How did we get here? The United States, at least since industrialization, has won its wars (when it’s won them) through the overwhelming application of force and firepower. We have essentially churned out awe-inspiring amounts of war material that we brought directly to bear on clearly identified and traditional (nation-state) opponents who could not match or withstand it. While not necessarily pretty, it was effective. This highly linear approach (action “x” will lead to predictable/intended effect “y”) to warfare became our default strategic playbook.

Unfortunately, such a linear approach is often insufficient in highly complex, interconnected, and interdependent environments. In today’s world, the challenges are much more multi-dimensional and don’t often present a clearly identifiable military center of gravity—never mind one whose damage or destruction can be easily translated into political objectives.

This gets at the fundamental problem: for the United States, the typical answer is to militarize problems that may elude purely military solutions. Our national security leadership appears incapable—even after immense amounts of so-called “strategic education”—to be able to look at an emerging strategic challenge and ask themselves: 1) what are its unique characteristics and requirements; and 2) do we actually have the tools/capabilities to achieve the desired political outcomes? Lacking this ability, they too often default—ineffectively at best and catastrophically at worst—to the toxic belief that if we just apply enough force, we can achieve whatever goal we desire.

Instead of learning from our past mistakes, we are doubling down on failed strategic approaches. The same voices that led us into the strategic fiascos of the past two decades still loom large in contemporary security debates. Turn on any cable news show and you’ll see one of the architects or enablers of these failed policies lecturing us on the “right way ahead.” Apparently, even relying on one’s “gut instincts” alone (as one recent Air Force memo suggests) is an acceptable means of making strategy. Part of this problem, however, lies in a dangerous culture of toxic positivity within the national security establishment. There is a big difference between a proactive, “can-do” approach and a failure to simply look facts in the face. The unintended consequences and outcomes of excessively linear thinking over the last twenty years underscore this reality.

So, is there a better way to educate our national security leaders? Ultimately, today’s complex strategic environment requires a fundamentally different set of skills. To be sure, we need a strong understanding of strategic foresight, future literacy, and complex systems. We must also acknowledge that today’s hyper-connected strategic challenges are not so much solvable as they are merely manageable. Strategic foresight—which involves the practice of envisioning alternative futures in order to better sense, shape, and adapt to change—can help. It cultivates a tolerance for uncertainty, which cognitive psychology tells us can reduce judgmental bias and promote non-linear thinking.

As we shift to building artificial intelligence-based platforms and data solutions, we must also deliberately develop intellectual capital. Seizing and occupying the high ground in national security requires more than just “buying things,” developing weapons systems, or pursuing disruptive technologies. It requires security professionals to have the cognitive capacity to leverage them. Perhaps most importantly, we need a new approach to strategic education that produces leaders that are humble and not paralyzed—or worse, driven to obsolete default behaviors—by the unavoidable uncertainty of today’s complex world. We need more leaders who can bring themselves, when appropriate, to say “no, we probably can’t achieve that through military means, but we might be able to do this with the range of tools we have available.” After twenty years of failures, American taxpayers ought to know that their government has a plan to effectively leverage this cadre of strategists in whom they have invested so much.

Josh Kerbel is a member of the research faculty at the National Intelligence University, the academic arm of the Office of the Director of National Intelligence.

Lt. Col. Jake Sotiriadis, USAF, Ph.D., is a career Air Force intelligence officer. He currently serves on the research faculty at the National Intelligence University and is Director of the Center for Futures Intelligence.

The opinions expressed herein are solely those of the authors and do not reflect the official positions of the U.S. intelligence community or the Department of Defense.

Image: Felix Mittermeier/Unsplash.

Four dozen countries have applied a broad array of financial restrictions, export control measures, and targeted sanctions in response to Russia’s full-scale aggression against Ukraine. The intent of these restrictions was to limit sanctioned individuals’ ability to provide support to the Kremlin, and from there, convince Russian billionaires to use all available means to affect Russian president Vladimir Putin’s decisions. Although the sanctions have slashed individual oligarchs’ wealth, the number of Russian billionaires and their collective net worth actually increased over the past year since the Russian invasion began. Individual sanctions have contributed to a “rally around the Kremlin” effect and increased elites’ dependence on Moscow.

Individual sanctions, in their current form, are a weak tool for dismantling Russia’s crony capitalism, which combines incentives for elites’ loyalty to the regime and punishment for defection. Russia’s war in Ukraine and Western sanctions have provided the Kremlin with new opportunities to reward loyal tycoons through asset redistribution and heighten economic repression against renegade business elites.

The system has been in place since Putin was elected Russia’s president. Two months after his inauguration on May 7, 2000, the president gathered twenty-one Russian tycoons in the Kremlin. In this historic meeting, Putin struck a kind of “social contract” with Russia’s richest men, who had amassed their spectacular wealth during the previous decade. In exchange for their loyalty and political non-interference, Putin promised the oligarchs that his government would stand by the results of the chaotic privatization of the 1990s that enriched Russia’s post-Soviet elite. In the coming years, the Putin government put the unwritten rules of the social contract into effect. The oligarchs who reneged on his deal paid with their lives and freedom. The loyalists who pledged their allegiance to the president became the regime’s benefactors.

The class of wealthy economic elite in Russia has swelled over Putin’s long reign, fueled by ample opportunities for predatory asset stripping. The poor protection of property rights and recurrent economic hardships have incentivized many oligarchs making money in Russia to stash their wealth abroad. To tighten his government’s grip on business and political elites, Putin launched the “deoffshorization” campaign in 2013, which resulted in a series of measures prohibiting Russian officials from holding their assets abroad and levying hefty taxes on profits made through overseas ventures.

Before 2014, Russia’s economic elite, unwilling to bend to Putin, moved their capital and residency abroad. Between 2008 and 2014, 1,993 Russian nationals received the United Kingdom’s “golden visas,” which offered residency to people investing £2 million or more in the country. The United States, Portugal, and Austria were among the top issuers of investor visas for wealthy Russians. These opportunities began fizzling away following the imposition of Crimea-related sanctions on a number of Russian oligarchs linked to the Kremlin. Despite the financial losses that the Russian tycoons incurred, the list of Russian billionaires grew by a third—from 77 in 2016 to 106 in 2018—and their net worth rose to a collective $485 billion in the two years following the 2014 tranche of sanctions.

When Russia brazenly invaded Ukraine, the U.S. government promptly levied an array of well-coordinated economic and individual sanctions. By the one-year anniversary, the U.S. Treasury Department’s Office of Foreign Assets Control extended asset freezes and travel bans on more than 2,400 individuals, including at least forty-six Russian or Russian-born billionaires. The European Union, similarly, has sanctioned some 1,473 Russian nationals.

A day after the invasion, Putin called a meeting with four dozen Russian tycoons and heads of state-owned companies. In the meeting, Putin demanded solidarity from Russia’s business community in exchange for support from his government. He also threatened defectors, thus reiterating the rule of the “social contract” struck in 2000. In the subsequent months, business moguls who expressed criticism of the Russian government lost their valuable assets. Russian billionaire Oleg Tinkov, for instance, who slammed the “crazy war” against Ukraine on Instagram, reported selling his 35 percent stake in Tinkoff Bank—one of Russia’s largest lenders—to a company controlled by Vladimir Potanin, a Putin confidant and Russia’s richest man. According to Tinkov, the shares he traded were worth “ten times more” than what Potanin purchased them for. Another public critic of the war in Ukraine, billionaire Oleg Deripaska, lost the $1 billion hotel and marina complex in Sochi, ostensibly for condemning the Russian invasion. In December 2022, Putin supported a legislative initiative that would confiscate the assets of the Russian citizens who fled abroad and criticized the war.

The perceived threat to disloyal tycoons’ lives has compounded the risks of asset appropriation. During the first year of the war in Ukraine, a total of thirty-nine influential Russian figures, including fifteen Russian business leaders and executives, died under mysterious circumstances. The stream of inexplicable deaths by “suicide” or illness rocked the Russian business elite. The fact that the perished wealthy businessmen were predominantly from the oil and gas sector and many had ties to Putin led to speculation over the Kremlin’s involvement. Regardless of whether the Russian government, which has a long history of dubious “poisonings” and “window-fallings,” participated in the demise of these prominent Russians, the deaths engendered widespread fears in the oligarchs’ circles, effectively preventing them from speaking openly against the Russian government’s actions abroad.

The Russian state has also, notably, kept its promise to support loyal tycoons. After more than a thousand Western firms departed Russia, they left hundreds of billions of dollars’ worth of assets behind. The Russian state has nationalized these assets in retaliation for the freezes of Russian assets abroad. Moscow expropriated Exxon Mobile assets valued at more than $4 billion, and confiscated Shell’s shares in a Sakhalin project with Gazprom. Apart from the state itself, Putin’s loyalists have enjoyed the benefits of this wealth redistribution. Putin ally Gennady Timchenko, for example, was awarded a new state contract to sell Russia’s liquified gas to China. Yuri Kovalchuk, known as “Putin’s banker,” now owns most of the Russian Internet. A Chechen business leader close to Ramzan Kadyrov acquired a factory and what was left of Starbucks in the Russian-seized Ukrainian city of Mariupol.

To cushion the impact of sanctions on the wealthy Russians, Putin also endorsed changes to the Russian tax code that exempt sanctioned individuals from paying personal income tax and other taxes on frozen income and assets. Additional amendments to the Russian Criminal Code terminate criminal responsibility or soften the punishment for the most egregious cases of tax evasion in Russia. Simultaneously, new Russian laws criminalize calls for foreign sanctions against Russia or support in their implementation, and prohibit cooperation with international bodies “to which Russia is not a party,” such as the International Criminal Court.

The new measures implemented by the Kremlin to shield its loyalists from the sanctions’ pernicious effects have strengthened Putin’s crony capitalist system. Russia’s wealthiest individuals emerged $154 billion richer in March 2023 compared to a year ago. This is the wealth that the Russian government is eyeing for a new one-time war tax to patch gaps in the state budget. The current individual sanctions regime is too weak to pose an existential threat to oligarchs’ wealth—a kind of hypothetical threat that would have forced them to seek to change Russia’s policies and institutions. To weaken the symbiotic relationship between power and wealth buttressing Putin’s system, individual sanctions would have to be considerably broadened and deepened.

Oligarchs have enjoyed unrestricted access to their wealth by transferring legal titles for their assets to family members. Given this, sanctions would have to be applied to any nominee who has the formal rights to property of the sanctioned business elite. A critical vulnerability of the opaque web of trusts, off-shore companies, and subsidiaries owned by Russian billionaires is a small and secretive network of financial experts who manage the tycoons’ wealth. Identifying and sanctioning these wealth managers, who have previously escaped scrutiny, would likewise have debilitating consequences for the Russian oligarchs.

Effectively detecting and capturing tycoons’ assets requires the sharing of financial, banking, and intelligence information among countries. This has been achieved by the multilateral Russian Elites, Proxies, and Oligarchs (REPO) Task Force, in which intelligence services of the United States, Australia, France, Canada, Germany, Japan, Great Britain, and the European Commission cooperate. The efforts of REPO, however, would have to be extended to more countries. The interests and assets of Russian business moguls are spread across the globe. Sanctioned Russian moguls have been welcomed in Israel, Turkey, and the United Arab Emirates, among other states. The threat of secondary sanctions and reputational costs would have to be imposed on countries providing sanctuaries to Russian business elites and their business ventures.

The REPO Task Force countries must move quickly to simplify and expedite the seizure of the Russian tycoons’ assets for their use for Ukraine’s benefit. Freezing an asset is easier than confiscating it. The seizure of an asset typically involves a lengthy legal process, which is complicated by the burden of identifying its owner. Another challenge facing sanctioning governments is that they become responsible for the expensive maintenance costs of luxury properties or must allow their owner to access funds to upkeep their estate. As the Russian oligarchs have already filed lawsuits against sanctions in several jurisdictions, the REPO Task Force countries’ authorities need to establish mechanisms for asset seizure.

Last but not least, the United States, the UK, and other Western countries need to garner the political will to close loopholes for tax evasion and anti-money laundering mechanisms. In the United States, for example, the richest 1 percent of Americans have been able to hide more than 20 percent of their income using opaque ownership structures and complex trusts, especially in the real estate sector and offshore businesses. These are the same loopholes that once made Western real estate markets and tax haven jurisdictions hospitable to Russian oligarchs’ investments. Increasing the transparency of assets’ ownership and financial transactions and spreading the application of the anti-money-laundering rules to the real estate and offshore sectors will likely meet domestic resistance. Indeed, these same rules, which attracted Russian “dirty money,” are benefiting wealthy business people, celebrities, and politicians in the West.

Dr. Mariya Y. Omelicheva is a Professor of Strategy at the National War College, National Defense University.

Alexander Sukharenko is the Director of New Challenges & Threat Study Center in Vladivostok, Russia.

Image: Shutterstock.

Durant la guerre du Golfe de 1991, les Etats-Unis ont délibérément visé les approvisionnements en eau potable de l'Irak, violant ainsi la convention de Genève sur les lois de la guerre. La récente étude d'un universitaire américain qui a révélé ce crime a été ignoré par les médias. Elle confirme pourtant (...) / Irak, Droit international, Guerre du Golfe 1990-1991 - 2000/10

Aussi loin qu'on remonte dans le temps, les hommes n'ont cessé de scruter l'avenir. Qu'ils observent les astres ou auscultent les entrailles d'un poulet, une même question les angoisse : de quoi demain sera-t-il fait ? Et devins, mages, prophètes, diseurs de bonne aventure de leur prédire des (...) / Droits humains, Économie, Histoire, Idées, Politique, Science, Société - 1978/08

The commercial shipping network sustaining Beijing’s global military reach.

On April 20, Treasury Secretary Janet Yellen delivered some notable remarks at Johns Hopkins University. In discussing sanctions on Chinese companies, Yellen noted that, “our goal is not to use these tools to gain competitive economic advantage.” She tried to emphasize that a U.S.-China decoupling was not on the horizon. A week later, on April 27, National Security Advisor Jake Sullivan spoke at the Brookings Institution, where he echoed Yellen by saying that the Biden administration is “looking to manage competition responsibly and seeking to work together with China where we can.” But Sullivan also criticized China’s overuse of industrial policy and indicated that U.S. policymakers would respond in kind.

Both Yellen and Sullivan are misguided about China’s views on economic and security policy.

For China, economic issues are security issues. Chinese president Xi Jinping stated in 2014 that economic security is the “foundation” of his “comprehensive security concept.” For Xi, military power protects economic development, and economic growth is critical to national security. Since 2014, Xi has only hardened his position, remarking at the “Two Sessions” in March 2023 that “security is the foundation of development.”

In this, Xi is borrowing from Deng Xiaoping, the architect of the “Reform and Opening-Up Era.” From the late 1970s onward, Deng pursued economic modernization, which used market incentives to support the “Four Modernizations” of agriculture, defense, industry, and science and technology. China’s economy responded by averaging double-digit growth between 1980–2010.

In the early days Xi’s presidency, concepts such as “strategic emerging industries” and “Made in China 2025” were announced. They signaled an inward turn in economic policy, concerning Washington. Chief among these concerns was intellectual property theft and the potential for advanced technology to fall into the hands of the Chinese military.

U.S. policy responded by seeking to blunt the rollout of China’s new economic system. The Committee on Foreign Investment in the United States (CFIUS) began blocking more Chinese acquisitions of foreign technology companies. For example, CFIUS blocked the purchase of Magnachip, a South Korean semiconductor business, by Wise Road Capital, a Chinese company. Capital controls combined with the reformulation of U.S. export controls under the Export Control Reform Act of 2018 signaled an increased focus on U.S. economic security.

The White House also continued the trade war started by President Donald Trump. It maintained those tariffs and passed the CHIPS and Science Act of 2022—a $50 billion dollar investment in U.S. semiconductor manufacturing that aims to revitalize a perceived dwindling lead in the sector.

The Biden administration wants to reduce economic tensions with China and fix underlying problems. But as reported by Politico, Biden officials may have competing ideas. To make matters worse, the Chinese are not returning U.S. phone calls, though Katherine Tai, the U.S. trade representative, is reportedly meeting with the Chinese commerce minister later this month. Hopefully, this meeting will be the prelude to higher-level, follow-on meetings.

But making macro-level improvements in U.S.-China relations begins with reframing the problem. It should be recognized that economics are security are intertwined. For great powers, economics is a foundational element of national power, allowing for the build-up of military capabilities. But it also serves more fundamental security concerns.

China faces major demographic changes and a slowing (but still steady) rate of economic growth. As Beijing grapples with these challenges, technological development is viewed as the sustaining driver of long-term economic prosperity. This makes science and technology imperative to China’s advanced development path, meaning that any policy that attempts to stall or cut-off China’s technological growth is going to make diplomacy especially challenging.

Beijing does not see U.S. economic countermeasures as narrow and limited; it perceives its national interests as being infringed upon. In an anarchical, self-help world, Beijing has no incentive to believe that coercive American economic statecraft will cease. This causes them to engage in an “action and retaliation” cycle, responding with coercive measures of their own.

So what can the United States do?

First, U.S. policy towards China needs more coordination between the security and economic portfolios. Planning and high-level visits should include officials from both areas.

To represent the economic portfolio, we recommend Commerce Secretary Gina Raimondo, who views technology and economics as deeply connected. Raimondo also sees the connection between international trade and the U.S. domestic economy, stating that “we need to continue to do business with China, and trade with China supports American jobs.” Additionally, it is evident from the battery of laws passed in the last year that the Commerce Department will lead the United States in organizing and executing its own science and technology policies and executing U.S. responses to China’s policies. As such, the Department’s secretary is the natural lead on a new approach.

Second, more bilateral meetings need to be set up. Trust can be built with lower-level bureaucrats who can elevate communications to higher levels. In terms of location, a third-party country would allow both Washington and Beijing to maintain some of their pride. Previous meetings at Bali and Geneva indicate the value of a third-country meeting point, as does the Vienna meeting between Sullivan and Wang Yi, director of the Central Foreign Affairs Commission.

Lastly, the United States should take more meaningful actions, rather than just verbalize reassurances to China. The ambiguity of state-business relations in China and whether the end-user of technology is a military or commercial one is Washington’s real concern. But too often “national security” is a blanket term. A better route would be to explicitly state the conditions that make something a real national security threat.

In terms of the Commerce Department’s Entity List, clear rules should be established for being removed. Clarifying that transparency on the part of Chinese firms and state organs would go a long way in developing guardrails in a spiraling economic relationship.

Sullivan’s speech rightly emphasized making the economically competitive domain a place of “small yards, high fences.” But this is more of a philosophy than a specific policy. A better policy would view economics and security together, paving the way for real progress in U.S.-China relations.

J. Tedford Tyler is a Foreign Policy Associate at the Charles Koch Foundation.

Kedar Pandya is a Research Assistant at the Texas A&M University Economic Statecraft Program.

The views expressed here by the authors are their own.

Image: Shutterstock.

In 1954, scientists at Bell Labs in the United States invented the first silicon solar panel. By 1978, American firms produced over 95 percent of the global solar market. Yet despite this initial dominance, American firms only produced a paltry 6 percent by 2021. Instead, it is China that controls 70 percent of global production. A similar story can be seen with hypersonic missiles: the technology was initially developed in America in the 1960s, but currently, America has “catching up to do very quickly.” This sort of situation is so common, in fact, that China has a lead in thirty-seven out of forty-four major emerging technologies, according to a report by the Australian Strategic Policy Institute.

Despite the United States continuing to spend the most on research and development (R&D) of any nation, the United States is lagging behind in spearheading new technologies. The issue isn’t a lack of R&D spending but rather an inability to implement new technologies or maintain a market edge over other nations. In other words, we are still the greatest innovators in the world, but we cannot successfully commercialize our innovations. The major reasons for this are a shift away from industrial policy to science policy, industry consolidation, and a lack of financing for small and medium enterprises. If we wish to correct course, it is necessary to look at the history of R&D in the United States.

During the 1950s and 1960s, the U.S. federal government, particularly the Department of Defense (DoD), played an active role in fostering innovation by being the “first buyer” of many new technologies and encouraging technology-sharing between firms. For example, the first market for transistors was NASA, which bought every transistor in the world in 1962 for the Apollo missions. More recently, NASA used a similar method in its commercial orbital transportation service program (COTS) program, which encourages commercial spaceflight by buying cargo and crew transporters for the International Space Station. One major success of this program has been SpaceX, whose first major success was developing the Falcon 1 for a COTS contract in 2006, demonstrating that the concept is just as viable today as it was in the 1960s. Additionally, the DoD often facilitated knowledge sharing between firms and researchers, especially by using second source contracts—i.e., contracts that stipulated that any new technology purchased by DoD would have to be produced by at least two firms—creating redundancy in the supply chain.

Meanwhile, the majority of research was performed by large corporate laboratories rather than academia—in the 1960s DuPont produced more patents than Caltech or MIT combined. This, combined with an already massive industrial base, allowed the United States to retain a technological edge by rapidly creating a new market for a technology and quickly creating an ecosystem of suppliers. After the initial creation of the market, long-term commercialization and competitiveness were more or less left to the market. Since the United States had a near monopoly on many high-tech products such as semiconductors and solar panels, there was little need for government intervention. However, this created a period of complacency in the 1970s that was quickly ended by foreign competition from Japan in the 1980s.

The competition caused the U.S. government to shift predominantly towards “Science Policy,” wherein academia would provide the bulk of the research, and this research would primarily focus on basic sciences with no immediate application. Essentially, the cost of basic R&D was offset from the company level to the government. Meanwhile, large companies consolidated supply chains, and the implementation of new technology would be left to small firms with little guidance from the government. This approach did initially work in certain sectors. For example, America actually regained dominance in semiconductors in the 1990s. However, it failed in the long term. As of 2021, Intel was responsible for 19 percent of global semiconductor R&D spending but still lost the bleeding edge in chip processes to TSMC and Samsung. The same thing happened in solar panel manufacturing as well: despite the United States outspending Japan in R&D in every year except one from 1980 to 2001, the United States still lost its market share. The focus on efficiency, in short, worked too well. The consolidation in technology supply chains made it difficult for companies to adopt new innovations since it became impossible for smaller firms to test new process improvements and “move them up the chain.” Additionally, the focus on basic research alone meant that rapid commercialization took a backseat, allowing other nations to establish first-mover advantage and maintain it by iterating on already commercialized technology.

From these failures, it can be ascertained that if the United States wants to regain its lead, it will need to shift its research policy back towards having the state to encourage the commercialization of new technology, along with intentionally creating redundancy in supply chains to sustain innovation. However, Washington must go further than either disorganized disbursing of one-time grants or a de facto focus for the DoD. Instead, commercialization should be as focused and institutionalized to the same degree as basic research is today with organizations such as the National Science Foundation.

A good example to emulate in this regard is Germany’s Fraunhofer Society. Founded in 1949, the organization focuses on bridging the gap between research and industry by connecting academics with companies and venture capitalists, or VCs, while funding the scale-up of technology that is too risky for VC firms. This is accomplished through bilateral contract research (a company hiring the institute for a specific research task), spin-off companies founded by Fraunhofer staff, licensing technology to companies, transferring personnel to industry, and “innovation clusters,” where different companies are brought together to establish common standards or otherwise coordinate for mutual benefit. Importantly, 70 percent of the Fraunhofer Society’s funding is generated through industry contracts, IP revenue, or public research. This encourages the organization to be dynamic and entrepreneurial in how they approach problems. A similar approach would work well in the United States—saving taxpayer dollars and attracting talent from both academia and the VC world.

It's worth noting that the Fraunhofer Society already has a branch in the United States and is regarded as “an indispensable promoter of scientific exchange between the USA and Germany.” The process of creating a similar institute for the United States is less daunting of a task than one might imagine, since the U.S. government can consult, acquire personnel, and gain expertise from the American branch with relative ease. Such a policy would also carry the additional benefit of improving relations between Washington and Berlin.

While the United States has been losing its edge in technological innovation, this loss is not an inevitability. By creating an institution for bridging the gap between basic scientific research and commercialization by the private sector, the United States can regain dominance while greatly benefiting the public by allowing for more cutting-edge technology to make it to store shelves. There is already a good “template” for such a system in the form of the Fraunhofer Society in Germany, alongside an existing presence in the United States, so it should be a high priority for America’s science policymakers to implement the model here.

Siddhartha Kazi is an undergraduate student studying Industrial Engineering at Texas A&M University. He has written for The National Interest.

Image: Shutterstock.

Get ready for a China-centered global order. The de-dollarization push, China-centered economic and security pacts along with ongoing efforts to build its sphere of influence, and the geared domestic dominance all indicate the end of Beijing’s traditional policy of “hide and bide.” Global leaders and CEOs flock to China as pilgrims. Macron signed multiple deals with the Middle Kingdom, including some related to deepening military cooperation despite allies’ disappointment and the ongoing war with Russia, China’s strategic partner. Hubristically, the Global Times, a jingoistic state-owned Chinese tabloid, chided South Korean president Yoon Suk Yeol for his U.S.-leaning visit as going “against the trend.”

The trend in question is that of China’s rapid ascent in international affairs through multiple fronts, particularly in the realm of trade and economics. National Security Advisor Jake Sullivan and scholar Hal Brands once sketched out China’s path toward global hegemony through economic power. Clearly, the glaring influence Beijing wields today does not come from its military—studies have long confirmed the notion that strong economic power is influence. Similarly, the Cold War was not simply won by military means, but via economic and ideological strength.

On these fronts, China is winning, rapidly becoming an economic and technological superpower. Just five years ago, the United States was worried about steel overproduction and Huawei. Today, there are concerns over semiconductors, which country is the largest auto exporter (hint: it’s not a Western country), and TikTok, which influences 150 million Americans. The United States increasingly feels passive and defensive in the influence race. The Global South, and regional powers such as Saudi Arabia and Brazil, are increasingly turning to China, praising a country that also happens to be their largest export market.

In fact, as the largest trading partner of over 120 countries, China has become a central hub for global production. Yet the most striking part is, again, the trend. According to the United Nations, in merely twenty years, China has increased its global share in mid-high- and high-technological production (value-added) from a single digit to nearly 40 percent, more than the G7 countries combined, and is poised to reach 50 percent by 2030. Such dominance is accompanied by deprived opportunities for others. Many tradable industries of the United States and others have sharply declined; many of these with economic and security implications. America has also lost its lead in most strategic technologies, according to the top 10 percent cited academic papers. All of this has unfolded ever since China joined the World Trade Organization (WTO).

The result has been a rapid shift in global power distribution in China’s favor, which is a fundamental factor that international relations theorists believe explains global politics and China’s increasing assertiveness and influence. Loss of industries, especially higher-end ones, impacts jobs, fiscal revenue, public goods, technology and innovation, global competitiveness, supply chain security, and economic and political polarization, particularly within civil society at large. The global market, on the other hand, incentivizes Chinese firms to reinvest continuously in technology, quality, and innovation. China is enjoying a breakout in almost every major industry.

The “Leviathan” Created by Global Trade

How did China achieve such power over global production?

The key lies in international trade, which has essentially enabled Beijing to reorganize global production in its favor. New research has pointed out that conventional trade theories based on comparative advantage are quite flawed, since for 90 percent of tradable industries, cost advantage is more applicable. Yet, cost advantage isn’t just low labor prices. As found in the author’s ongoing research, China’s unrivaled cost advantage is actually a “structural competitive advantage,” which arises from its unique economic and political system, gigantic size, and the interactions of all components. These components include state-led mercantilism, massive scale, currency policy, competitive business ecosystems, world-class human capital and infrastructure, technology diffusion and innovation networks, and various institutional and social advantages.

Some scholars have proposed various concepts naming this phenomenon. Terms such as “state capitalism,” “China Inc.,” “predatory trade,” or “brute force trade” have been thrown around. Behind the various terms though, what matters is that “structural competitive advantage” is why few other states, richer or poorer, cannot outcompete China, after it acquires know-how. As an example, the same Tesla electric vehicle models produced in Shanghai with most localized components are 20–30 percent cheaper than those made in Texas or Berlin. Likewise, Apple’s reliance on China has shifted from low labor costs to an unmatched “ecosystem” that can provide product design, components, apps, and more.

More importantly, China’s structural advantage behind its gigantic size of millions of Chinese firms and 900 million increasingly skilled workers is the “invisible hand” and powerful “market force” driving China to dominate most high-value and strategic sectors, with the rapid progress of technology mutually reinforcing each other. This advantage is present regardless of seemingly detrimental issues, such as a slowly aging population or a weak financial system. The resulting organic, competitive Chinese ecosystem can nullify U.S. industrial policies, such as the CHIPS Act, in the longer term. It also extends to advanced fields like artificial intelligence and biotechnology.

As a result of these factors, evaluating trade policy through localized winners and losers—such as a few firms, sectors, or consumers—makes less sense. When viewed as a nation as a whole, the prospect of free trade with China looks grim: it is leading to Beijing’s dominance, given its size, authoritarian nature, and global ambitions, and others’ weakness, dependency, and vulnerability. This reality even contradicts the original conception of free trade: the mutually-beneficial division of labor. Global trade has de facto created an unprecedented leviathan.

American Trade Policy Needs to Aim Big

The worker-centric trade policy of the Biden administration is born of the realization that free trade has failed to deliver for American workers. The United States also has been drawn into a subsidy war in a few “national security” areas whose outcome is uncertain and ignores many important industries—for example, automobiles, machinery, electronics, chemicals, etc. Additionally, Washington pays little attention to how China is deliberately integrating international trade into its grand strategy (e.g., using trade to de-dollarize, support Russia, coerce dissidents, build a new sphere of influence, or rupture the bonds between the United States and its allies).

As in Jake Sullivan indicated in his recent speech at Brookings Institution, the post-World War II free trade regime is unsustainable. This is not only due to the dysfunction of the WTO, but also because its assumptions no longer hold: the major powers are playing mercantilist games. Geopolitical rivalries make interdependence a dimming problem rather than a solution. WTO rules set twenty years ago did not take into account a tightly organized, non-market superpower party-state (hence, “China Inc.”) that also seeks to convert the current order.

Admittedly, the post-World War II economic order has experienced troubles and anomalies. The WTO was supposed to support a greater liberal order by trade. It has notably fallen short. Globalization disproportionately benefits only some, while leaving many behind. Moreover, the order has created an interdependence mess, as illustrated by the effects following Russia's invasion of Ukraine, Western sanctions applied in the aftermath, and Xi Jinping’s party-state securitization in China. To top it all off, the existing order does not, despite what adherents claim, particularly favor democracy, but rather mercantilism and autocracy: the top three trade surplus countries in 2022 were China, Russia, and Saudi Arabia. Free trade has slid from the one envisaged by Adam Smith and David Ricardo, oriented toward natural liberty and division of labor, to a predicament where one authoritarian, non-market superpower advances its own domination.

The Future is Bleak if the Trend is not Reversed

The United States has realized that expecting China to change course is hard—no one is going to change something that is bringing success. China follows its own agenda: realism and authoritarianism are the foundations undergirding CCP's behavior, with power considered essential and liberalism viewed as an existential threat.

Despite Sullivan’s correct diagnoses, his proposed solution stops at domestic redistribution and subsidies in a few areas, which won’t alter the grander structural market force to reverse the trend in China’s favor. The United States needs a larger, more sweeping strategy for China and trade. With China’s growing economic dominance, the world will be reshaped in an illiberal way, as predicted by scholars such as John Mearsheimer and Charles Glaser. Apart from the realms of technology and the military, this includes shaping global norms and rules detrimental to democracies: as with domestic rule, the Communist Party has no interest in an order upholding liberty, democracy, human rights, or transparency. Instead, its top-down model with leading technologies has shown the capability to undermine the existing order and its values.

It’s Not About Promoting, but rather Protecting Democracy

Not only are prosperity and security being undermined by the growing strength and attractiveness of “the China model,” but so are democratic values, a key pillar in both President Joe Biden’s and President Donald Trump’s 2022 and 2017 National Security Strategies. Today, autocrats around the world resurge, unite and crack down unscrupulously. As democracies continue to lose global market share to China, vital to prosperity and security, many problems they face today will not be reversed. Compared to a China model which attains high-value jobs and builds fancy infrastructure, democracy no longer appears to be the path to modernity and can look chaotic, less able to deliver, and less appealing to citizens, resulting in “existential” legitimacy issues. That is why leading expert Rush Doshi expresses concerns about the possibility of the United States becoming a “big Venezuela.”

Ultimately, it all comes down to what world we will live in—the ultimate end that justifies the means. The right question to ask is, should the United States continue to integrate with China, given this dire trend, and that China is likely to be an economically powerful Soviet Union? Trade shouldn’t be an end in and of itself. Trade should be at the center of U.S. grand strategy, which is oriented to ensure prosperity and security, and protects democratic values through concerted means.

A dire future awaits us should the current trend continue. As China integrates the global economy, more countries will find it too costly to “say no.” Malaysia and Singapore, even Germany and France, already downplay security concerns—careful not to upset the economic ties.

China is rallying countries around the world to “divide and rule,” bolstering autocracies in the fields of economy and technology. To nullify this trend, a bounded economic order may have to be the solution.

Democracies are never immune to external aggressions. Sullivan is right that traditional trade deals are insufficient for modern trade. Yet they are the exact problem that has the United States bleeding and resulting in China grabbing one sector after another.

Therefore, Washington should consider integrating market access provision, the biggest incentive, into the Indo-Pacific Economic Framework soon: there is growing Chinese influence on the framework’s members. Vietnam or Mexico is more complementary to the United States; neither can take away American jobs as massively and effectively. These frameworks are also powerful geopolitical instruments (so perhaps also reconsider the Comprehensive and Progressive Agreement for Trans-Pacific Partnership) that should include those who play by rules (especially emerging democracies). The $600 billion yearly imports from China, a huge political leverage and vulnerable dependency, requires friend-shoring at least, starting from strategic sectors. All in all, the key boils down to the U.S.-led trade bloc.

This is not to say that there is no cooperation or no co-existence. The West and the Soviet Union co-existed and cooperated on global issues during the Cold War. In fact, China is far ahead of the game on climate and already dominates the clean energy industries. Perhaps this is a useful place to start a conversation.

George Yean is a PhD candidate at the Department of Government of Harvard University. His research areas include international economy, technology, security, and grand strategy. He was trained in economics, political science, and engineering, and spent years working for high-tech companies such as Cisco. He can be reached at gyean@g.harvard.edu.

Image: Shutterstock.

The Left’s winning streak in Latin American presidential races screeched to a halt on April 30 with the election of Santiago Peña, an economist and conservative member of Paraguay’s ruling Colorado Party. Peña’s election gives center-right Latin Americans reason to hope that the tide is turning against the socialist wave that has swept through the region in recent years.

Prior to Peña’s victory, five of the last six presidential elections in Latin America have gone to Leftist leaders, many of whom are showing signs of authoritarianism and rabid anti-Americanism.

Colombian president Gustavo Petro purged political moderates from his coalition government the day after he held an international conference to whitewash Venezuela’s criminal Maduro regime. Honduran president Xiomara Castro abandoned Taiwan in favor of Communist China. Brazil’s newly elected president, Lula da Silva, traveled to Beijing to promote the end of the U.S. dollar’s dominance in global trade and later criticized Western support for Ukraine against Russian aggression.

And that was just last month.

Many voters who pulled the lever for these Leftist leaders now realize they chose poorly. Latin American businessmen from the region’s five largest economies, including Colombia and Brazil, withdrew roughly $137 billion out of their countries in 2022. And in 2023, according to sources within the Customs and Border Patrol, Colombians became the second-largest nationality arriving on the U.S. southern border. Capital flight and outward migration are the direct consequences of Petro and Lula’s leftist policies.

But elsewhere, things are starting to shift.

In a blow to leftist President Gabriel Boric, Chileans on May 7 voted overwhelmingly for conservative parties to draft a new Constitution. Upcoming presidential elections in Guatemala and Argentina later this year could see conservative candidates win. Could this be the beginning of a rightward shift in the hemisphere?

From roughly 2012–2018, Latin America saw at least ten pro-business, pro-U.S. presidents come to power. They focused on fixing their country's financial portfolios and strengthening relations with the United States. Except for Peru, which ran through six presidents in six years, all of them finished their terms with a healthier national balance sheet. But that didn’t translate into popularity. Except for Brazil’s Jair Bolsonaro, most of these conservative presidents ended their term with lower approval ratings than when they began. They were succeeded by far-left candidates.

Among the many mistakes made by Latin America’s conservatives was that they focused too much on policy and not enough on popular messaging. The result was their countries fell prey to brutal disinformation campaigns that fomented organized riots and violent protests. In 2019, a simple four-cent hike in Chilean public transit fares led to violence, the destruction of the country’s infrastructure, and, ultimately, the election of a thirty-five-year-old Marxist. Something similar happened in Colombia.

Digital forensics analysis found that foreign disinformation accounted for at least 30 percent of the online noise during the 2019 Chilean protests. The same blueprint was followed in Colombia in 2021, where Venezuela and Russia interference exacerbated the crisis. These foreign campaigns irreversibly weakened Colombia and Chile’s conservative governments who relied on conventional reelection strategies in the face of an unconventional threat. Both countries saw left-wing governments replace them.

Radical leftist politicians capitalized on these mistakes by using non-state networks to entrench their power. Even after leaving office, autocrats such as Ecuador’s Rafael Correa or Bolivia’s Evo Morales remained powerful. Their on-the-ground, horizontally aligned grassroots movements persistently attacked their successors, allowing them to control the political narrative. The leftist wins in Latin America have led to a geopolitical realignment toward China, Russia, and Iran.

Unfortunately, it is not clear that Latin American conservatives have learned these lessons. The day after he won the presidency, Paraguay’s Peña recognized Latin America’s worst dictators and Russian, Chinese, and Iranian clients in Caracas and Havana.

Should Latin America’s new Right retake and hold power across the region, they will need to adopt a policy vision that embraces individual liberty and economic freedom, while prioritizing national sovereignty and national security. That is not consistent with flirting with China’s neo-imperial ambitions. Half the region lists the People’s Republic of China as its top trading partner, but that doesn’t mean it must acquiesce to its economic coercion. For Latin America, creating distance from China by prioritizing relations with the West and Taiwan, is not just in the U.S. national interest, it’s critical for its own sovereignty and stability.

In sum, mass migration, crime and violence, inflation, poverty, and food insecurity are all on the rise in Latin America. But so is a new conservative consciousness that has been yearning for new leaders.

Paraguay, Guatemala, and Argentina have the opportunity to right the wrong in 2023. With a rising China and other bad actors on its shores, this could be Latin America’s last chance for lasting progress. It’s time for the new Right in Latin America to rise to the occasion.

Joseph M. Humire is the executive director of the Center for a Secure Free Society (SFS) and a visiting fellow of The Heritage Foundation’s Allison Center for Foreign Policy. 

Image: Shutterstock.