Friday News Roundup - September 29, 2023
While we are moving what looks to be a likely government shutdown, there is also a break from politics today to remember and honor the legacy of Senator Dianne Feinstein (D-CA) who passed away at age 90. Senator Feinstein was a trailblazer in politics, serving first as Mayor of San Francisco following the assassinations of George Moscone and Harvey Milk before beginning a tenure of more than three decades as the Senator from California. In addition to being the longest-serving female Senator and longest-serving Senator in the history of California, she was the first woman to chair the Senate Rules Committee and Senate Select Committee on Intelligence.
Meanwhile, as mentioned the prospects for a government shutdown on Sunday appear certain, and the question is for how long? The House GOP moved 3 of 4 spending bills on Thursday night, while the Senate looks to debate its proposals. While deals reached on Ukraine aid, border security, and the duration of any stop-gap measures are a matter of negotiations, the real questions come down to Speaker McCarthy’s future and what if any deal can meet GOP hardliners’ demands.
While division appears to win the day in Washington, we can unite to cheer on Team USA in the 44th Ryder Cup starting today, held at Marco Simone Golf and Country Club in Guidonia Montecelio, northeast of Rome. In the first Ryder Cup played in Italy, the U.S. looks to defend the Ryder Cup by winning on European soil for the first time since 1993. USA! USA! USA!
This week Joshua C. Huminski reviewed Nabila Ramdani’s “Fixing France” for the Diplomatic Courier. For Ramdani, France’s Fifth Republic is falling short of its enlightenment ideals and is no longer fit-for-purpose. Surveying France’s social, cultural, political, and economic issues, she argues that considerable change is needed if the country is to meet the needs and aspirations of all French citizens. Huminski also led a conversation with author Maximilian Hess about his book “Economic War”, Russia’s efforts to disconnect and insulate itself from the dollar economy, and the financial aspect of its war against Ukraine.
In this week’s roundup, Dan Mahaffee evaluates how policymakers are debating economic security tools, and how to evaluate their impact on both adversaries and ourselves. Ethan Brown lays down some strategic guardrails to ensure that the goals of the Ukraine War don’t provoke a greater conflict.
Evaluating Economic Security Tools
Dan Mahaffee
Over the past few years, we have witnessed a shift in how US policymakers look to utilize the economic tools of statecraft. The most significant use of these tools, along with key allies, has come in response to Russia's 2022 invasion of Ukraine. There we saw a wide range of sanctions applied to cut off Russia from western technology and limit energy exports—but it has also been clear that Moscow has found ways to get around the sanctions, adapt to economic isolation, and still find support among countries across the Global South. While responding to Russia’s aggression alongside allies, U.S. policymakers have moved to counter China’s technological advances in critical technologies—particularly those with military or intelligence applications. However, the approach to China is more complicated by our economic interdependence and allied reluctance to make drastic moves vis-à-vis Beijing compared to those against Moscow.
Thus as policymakers continue to expand, tweak, and bolster our economic security tools, it is critical to address the impact on our own economies and competitiveness, to consider the tempo of and messaging around of these policies, and to provide real alternatives to dissuade economic reliance on our adversaries. As we look to further tighten the screws on the Kremlin or reduce reliance on China, these considerations will be critical to creating economic security policies that are effective in both targeting adversaries and minimizing the economic blowback to us and our allies.
First and foremost, there is our own economic cost from implementing these policies. While vulnerabilities in supply chains have been demonstrated by some combination of the pandemic, Ukraine war, and sea change in Beijing’s economic policies, these economic ties have been built over decades and are difficult to quickly reshape. Russia’s energy connections to Europe are one example, and Europe did move swiftly to reorient itself to other suppliers and build alternative infrastructure, but questions remain for another winter ahead. Wartime realities brought about the initial political will to adjust, but how long can it last?
With China, on the other hand, the litany of concerns, be it human rights, economic imbalances, military development, or technology theft, have combined with political pressure, especially in the United States, for policymakers to protect critical technology and reduce reliance on China. Both the White House and Congress have moved in this direction, with expansions of export controls and proposals to implement outbound investment review. These proposals recognize both the growing China challenge and Americans’ anger with Beijing, but good-intentioned policies that are poorly written or implemented do risk harming American companies and our own innovative edge. Certainly areas of critical technology warrant protections and de-risking of supply chains, but broader measures risk cutting U.S. companies’ revenue (impacting jobs and R&D, reducing what leverage we have on China’s supply chains, and raising questions about our reliability as an economic partner.
The continued implementation of these policies must also be accompanied by both clear messaging on why these tools are being used as well as recognition of both their impact and the real risk of their diminished efficacy in the future. Combined with other economic trends—rising interest rates and the cost of the green transition—the actions undertaken to punish Russia or reduce reliance on China add to the pressures on the global economic system. Without messaging explaining that these policies are because of Russia’s aggression or China’s threat, the United States and its western allies are painted as disruptors of the global economy, and Beijing and Moscow can draw on narratives of colonialism and western elitism when we cede the information contest. Even with such messaging we will have to contend that many third nations will see no greater moral imperative than to find the best deals for their citizens. In that case we must also be cognizant of how we use our economic tools like restrictions and sanctions. Their overuse will result in alternatives to circumvent the use of the dollar, American banks, or American technology.
Finally, the United States and its allies must also be able to present a compelling alternative to what China and Russia present to the world. Even after its invasion of Ukraine, the world has yet to find alternatives to Russia—nor have economic tools demonstrated their capacity for dissuading or ending the conflict. As much as we speak now of applying similar sanctions to China in the event of a Taiwan conflict, Beijing knows full well we could not afford, currently, to cut off the Chinese economy like we did Russia’s. Here it is less about what we can do to China and more about getting our own house in order. When Secretary Raimondo spoke of China being “un-investable” because of human rights concerns, changing anti-business policies by the CCP, and other growing geopolitical tensions, it was not lost on me whether one could raise the concerns about the United States. An aging population increasingly opposed to immigration, an outdated education system riven by cultural conflicts, growing labor unrest, an opioid epidemic killing hundreds of thousands, cities hollowed out by crime, and our looming fiscal crisis all require addressing to continue American competitiveness and prosperity, but our broken political system appears incapable of solutions. While the economic gravity of the United States or China will not disappear anytime soon, the rest of the world may look at a choice between Washington and Beijing—and wonder if “neither” is an option.
For American lawmakers, it will be important to consider all of these factors as we adapt our economic security toolbox for the challenges ahead. Those tools, current and proposed, should be continually evaluated for their efficacy as well as to ensure, at a most basic level, that we are having a greater negative impact on our adversaries than ourselves. That seems like common sense, but will require thoughtful policymaking as well as resisting the temptation, despite current politics, to move headlong with aggressive economic security policies. In the end, we don’t want to bear the blame for upending the current economic order instead of the authoritarians who are abusing it.
Losing sight of strategic goals
Ethan Brown
Speakers’ Office Photo, December 2022 Visit to Congress by President Zelenskyy
This week, Ukrainian President Volodymyr Zelenskyy appeared in Washington D.C. once again appealing for increased military aid in his nation's fight against Russian aggression. Zelenskyy’s goals for the visit were to secure a $25 billion aid package which included the controversial addition of the ATACMs long-range guided missiles to be fired from HIMARs launchers already being provided. In the Ukrainian leaders' related words (by GOP members of the upper chamber after a closed-door meeting): “If we don’t get the aid, we will lose the war.”
The argument posited was that, while Ukraine’s defense forces have made tremendous tactical gains along the battleline in the East, Moscow possesses a heretofore unrealized capacity to reconstitute its front line forces over the coming Winter lull, threatening to undo the gains of the summer offensive. The disparity in US congressional support lies chiefly between the two chambers, with Senatorial delegations supporting another aid package (though support for the advanced ATACM missiles with a 300km strike range varies wildly across the US federal government). In the House, GOP lawmakers are aligning with the goals of the Freedom Caucus who have previously opposed continued aid spending, and have recently expressed that “the era of Ukraine’s blank check from Congress is over.”
As always, the dynamic with the situation is not as clear-cut as one American political party versus another on the strategic decisions involving foreign policy, even one with indisputable viable strategic relevance to future American security. Disregarding Ukraine’s continued deterrence against Russian aggression (which is a lodestone to authoritarian states writ large in this global environment) as American interests is not constructive strategy, “laughable” is a better way to put it. Yet, there are several factors at play in this tug-of-war in continued or altered engagement with Ukraine:
First, the American Congress is presently contending with the risk of a government shutdown, one tangentially related to the House’s failure to pass the annual defense spending bill amidst other federal budget haggles. These issues--money and appropriations--will always trump the externals of foreign policy.
Second, and perhaps most pressing and serving as the thesis for this analysis, is the scope of Ukrainian operations in its contest with Russian aggression appear to be growing and expanding, but not necessarily in ways that adhere to a cohesive, achievable, and constructive plan for ending the war.
The latter point bears examination, as we American citizens can only stare into nothingness and wonder at the inefficacy of our federal government's ability to default yet again.
Despite the brutal slog through Russia’s stalwart defensive lines, Ukrainian forces have indeed managed breakthroughs, at key locations like Zaporizhzhia, Robotyne, and elsewhere along the Dragon’s Maw. The issue for continued support is not that American lawmakers don’t want Ukraine to continue retaking lost sovereign territory, but the scope creep of where and how those munitions could be used portends the greatest risk. Continued support for Ukraine’s defense has thus far only produced bluster from Russia on the potential for escalation, but it remains a legitimate concern on one vector: escalation from a Ukraine whose strategic ambitions could exceed legitimate reclamation of sovereign territory. Those unclear goals are the clear concern of American lawmakers who feel that this war has been a boundless financing of the Ukrainian war effort, despite its necessity and influence on world affairs. Those critiques are not without merit, which makes this ordeal such a complex juggling act for an American Congress whose support for the war is subject to the complexities of its constituents.
That challenge to this whole affair is something I addressed when this war began, one which is now rearing its ugly head as the American polity is contending with the long-term challenges of a war that doesn’t involve American forces. That outcome would mean that the scope of the war had escalated to the point of confrontation between Russia and the West writ large, and the gamble up to this point in the war has been that same West trying to enable unilateral Ukrainian military operations (again, a legitimate and credible effort) without escalating the war to such confrontation. Russia has since called American involvement since Zelensky’s recent visit a “proxy war,” (another strategic theory I asserted earlier this year)
But Ukraine’s leader asking for more aid, at a time when the momentum of the offensive has compounded and the endstate of Ukraine’s recapture of its sovereign territory seeming to now require that undesired escalation by advancing military effects into Russian territory, is likely the impetus for congressional resistance to further “blank checks.” Balancing the contrast between continued military aid and opening full counter-operations which involve NATO writ large has been the anchor weighing down this whole affair, likely one which Putin and his advisors counted on in February of 2022 when opting to begin this revanchist gambit, and now, those complexities are coming home to roost.
Moving forward, American military aid shouldn’t end for Ukraine, but it does need to include stipulations to ensure that Ukraine’s military and strategic objectives remain relevant and yet avoid potential escalation. Simply, Ukraine must continue its fight, and NATO, American and European sponsorship should continue, but Ukraine’s fight must remain within its borders for the express purpose of removing Russia entirely from legitimate Ukrainian claims. That successful outcome is already much closer to reality than anyone could have hoped a year ago, and Ukraine’s buildup of credible, effective and modernized defense capabilities is far more comprehensive than it was before this endeavor began.
But if continued aid to Ukraine means the scope of the war exceeds those credible and legitimate strategic objectives, the resistance by American lawmakers to continue spending appropriations in the cause is a credible response. The path forward lies in clearly established, agreed upon, and achievable goals, which are already present and understood by the parties involved. It’s just a matter of keeping strategic goals aligned and clear.
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By Julian Mancillas
NATO Launches New Venture Fund for Defense Start-Ups
The NATO alliance’s new €1 billion venture capital fund – aptly named the NATO Innovation Fund – seeks to provide financial support for defense start-ups in order to boost the military alliance’s technological edge and ward off Chinese competition. Based in the Netherlands, the fund will focus on advanced technology fields such as artificial intelligence, space, and biotechnology. Despite restrictions on investments in start-ups which produce offensive weapons, 23 NATO allies and counting have already joined the fund.
According to NATO Assistant Secretary David Van Weel, the fund is the first “multi-sovereign” venture capital group. Sweden, which hopes to join NATO in the near future, has also expressed interest in joining the fund. Van Weel stated that “we wanted to provide more capital on our side to invest in these companies to avoid them having to turn to Chinese investors.” The fund will help balance the playing field with China that is presently tilted by Beijing’s substantial financial support to its domestic defense companies and start-ups.
The war in Ukraine has driven NATO members to dramatically increase defense investments, giving the fund an added boost. With by far the largest defense budget in the alliance, the United States has not yet joined the fund, but Fiona Murray, vice chair of the NATO Innovation Fund and a professor at Massachusetts Institute of Technology, has confirmed that the Pentagon is monitoring the fund and could invest in the future.
Space Force Wants Military Hotline with China
This week while in Tokyo, General Chance Saltzman, Chief of U.S. Space Operations, confirmed internal discussions within the Space Force about establishing a military hotline with China. The goal, he said, would be that “if there is a crisis, we know who to contact.” Saltzman acknowledged, however, that it would be up to the State Department and President Joe Biden to initiate discussions with the Chinese government over such a hotline.
Ever since former House Speaker Nancy Pelosi (D-CA) visited Taiwan in August 2022, China has suspended regular contact with the U.S. military. The visit challenged the Chinese principle that there should be no official government contact between Taiwan and other countries because Beijing claims the self-governing island as its own territory. Despite U.S. efforts to reopen high-level military dialogue, China has steadfastly refused to do so citing US sanctions as the cause, casting doubt on its willingness to establish a new hotline
On his trip to Tokyo, General Saltzman also confirmed that the U.S. Space Force was considering the establishment of a local headquarters in Japan. While no possible location for the new headquarters was offered, Saltzman said it could look similar to the Space Force’s branch established last year in South Korea.
Unbearable News: Washington, D.C. to Lose Pandas
Washington D.C.’s National Zoo is set to lose its three beloved pandas by December 7. Tian Tian, a 26-year-old male, Mei Xiang a 25-year-old female, and their 3-year-old cub Xiao Qi Ji will all be sent back to China, which owns the rights to all pandas in captivity worldwide.
Pandas have been a fixture at the National Zoo since 1972, a period of warmer U.S.-China relations. After President Richard Nixon made his historic visit to China, Chinese premier Zhou Enlai gifted two pandas to the United States, which took up residence in the National Zoo in the nation’s capital. Since then pandas have been a fixture at the National Zoo for the better part of 50 years.
Given the current strained relations between Washington and Beijing, however, China has begun bringing their pandas back home. The departure of the National Zoo’s three pandas will leave the United States with just 4 remaining pandas in Atlanta, whose loan agreement expires next year. Despite current international tensions, National Zoo officials remain hopeful that the absence of the big, cuddly bears will be temporary. They are already applying for a new batch, so with luck the nation’s capital won’t be without its favorite animal companions for too long
Julian Mancillas is a student intern at the Center for the Study of the Presidency and Congress
The views of authors are their own and not that of CSPC.