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I. The Unipolar Trap

[1] U.S. Department of Defense. (1992, April 16). Defense planning guidance, FY 1994–1999. “The national security interests of the United States are enduring, as outlined in the President's 1991 National Security Strategy Report: the survival of the United States as a free and independent nation, with its fundamental values intact and its institutions and people secure; a healthy and-growing U.S. economy to ensure opportunity for individual prosperity and resources for national endeavors at home and abroad; healthy, cooperative and politically vigorous relations with allies and friendly nations and a stable and secure world, where political and economic freedom, human rights and democratic institutions flourish.” (p. 1)

[2] U.S. Department of Defense. (1992, April 16). Defense planning guidance, FY 1994–1999. “These national security interests can be translated into four mutually supportive strategic goals that guide our overall defense efforts: Our most fundamental goal is to deter or defeat attack from whatever source, against the.United States, its citizen and forces, and to honor our historic and treaty commitments.  The second goal is to strengthen and extend the system of defense arrangements that binds democratic and like-minded nations together in common defense against aggression, builds habits of cooperation, avoids the renationalization of security policies, and provides security at lower costs and with lower risks for all. Our preference for a' collective response to preclude threats or, if necessary, to deal with them is a key feature of our regional defense strategy. The third goal is to preclude any hostile power from dominating a region critical to our interests, and also thereby to strengthen the barriers against the reemergence of a global threat to the interests of the U.S. and our allies. These regions include Europe, East Asia, the Middle East/Persian Gulf, and Latin America. Consolidated, nondemocratic control of the resources of such a critical region could generate a significant threat to our security. The fourth goal is to reduce sources of regional instability and limit violence should conflict occur, by encouraging the spread and consolidation of democratic government and open economic systems t and discouraging the spread of destructive this end, we must encourage other nations to respect the rule technology, particularly of weapons of mass destruction and the means to to deliver them. To this end, we must encourage other nations to respect the rule of law and each other's economic, social, ethnic and political interests.” (p.1-2)

[3] U.S. Department of Defense. (1992, April 16). Defense planning guidance, FY 1994–1999. “To reach these goals the United States must show the leadership necessary to encourage sustained cooperation among major democratic powers. The alternative would be to leave our critical interests and the security of our friends dependent upon individual efforts that could be duplicative, competitive, or ineffective. We must also encourage and assist Russia, Ukraine, and the other new republics of the former Soviet Union in establishing democratic political systems and free markets so they too can join the democratic “zone of peace."” (p. 2)

[193] U.S. Department of Defense. (1992, April 16). Defense planning guidance, FY 1994–1999. “A collective response will not always be timely and, in the absence of U.S. leadership, may not gel. While the United States cannot become the world's policeman and assume responsibility for solving every international security problem, neither can we allow our critical interests to depend solely on international mechanisms that can be blocked by countries whose interests may be very different from our own. Where our allies' interests are directly affected, we must expect them to take an appropriate share of the responsibility, and in some cases play the leading role; but we must maintain the capabilities for addressing selectively those security problems that threaten our own interests. Such capabilities are essential to our ability to lead, and should international support prove sluggish or inadequate, to act independently, as necessary, to protect our critical interests. Moreover, history suggests that effective international multilateral action is most likely to come about as a response to U.S. leadership, not as an alternative to it.” (p. 2)

[4] U.S. Department of Defense. (1992, April 16). Defense planning guidance, FY 1994–1999. “The demise of the global threat posed by Soviet Communism leaves America and its allies with an unprecedented opportunity to preserve with greater ease a security environment within which our democratic ideals can prosper. We can shift our defense planning from a focus on the global threat posed by the Warsaw Pact to a focus on the less demanding regional threats and challenges we are more likely to face in the future. In this way, we can work to shape the future environment and to preclude hostile nondemocratic powers from dominating regions critical to us. This same approach will also work to preclude the emergence of a hostile power that could present a global security threat comparable to the one the Soviet Union presented in the past. In so doing we can provide the underpinnings of a peaceful international order in which nations are able to pursue their legitimate interests without fear of military domination.” (p. 3)

[5] U.S. Department of Defense. (1992, April 16). Defense planning guidance, FY 1994–1999. “In this more secure international environment there will be enhanced opportunities for political, economic, environmental, social, and security issues to be resolved through new or revitalized international organizations, including the United Nations, or regional arrangements. But the world remains unpredictable and well-armed, causes for conflict persist, and we have not eliminated age-old temptations for nondemocratic powers to turn to force or intimidation to achieve their ends. We must not stand back and allow a new global threat to emerge or leave a vacuum in a region critical to our interests. Such a vacuum could make countries there feel vulnerable, which in turn can lead to excessive military capabilities and an unsteady balance of one against another. If we do stand back it will be much harder to achieve the enhanced international cooperation for which we hope.” (p. 3-4)

[6] U.S. Department of Defense. (1992, April 16). Defense planning guidance, FY 1994–1999. “We are building defense forces today for a future that is particularly uncertain, given the magnitude of recent changes in the security environment. Fundamentally, we are striving to provide a future President with the capabilities five, ten or fifteen years from now to counter threats or pursue interests that cannot be defined with precision today.” (p. 4)

[7] U.S. Department of Defense. (1992, April 16). Defense planning guidance, FY 1994–1999. “In this regard, it is important to note the effect on our strategy of the fact that the international system is no longer characterized by Cold War bi-polarity. The Cold War required the United States and its allies to be prepared to contain the spread of Soviet power on a global basis. Developments in even remote areas could affect the United States' relative position in the world and therefore often required a U.S. response. The United States remains a nation with global interests, but we must reexamine in light of the new defense strategy whether and to what extent particular challenges engage our interests. These changes and the growing strength of our friends and allies will allow us to be more selective in determining the extent to which U.S. forces must be committed to safeguard shared interests.” (p. 6)

[8] U.S. Department of Defense. (1992, April 16). Defense planning guidance, FY 1994–1999. “Our strategy is designed to preserve this position by keeping our alliances strong,and our threats small. Our tools include political and economic measures and others such as security assistance, military-to-military contacts, humanitarian aid and intelligence assistance, as well as security measures to prevent the emergence of a nondemocratic aggressor in critical regions. We bring to this task our considerable moral influence as the world's leading democracy. We can provide more security at a reduced cost. If a hostile power sought to present a regional challenge again, or if a new, antagonistic global threat or alliance emerged in the future, we would have the ability to counter it. But the investments required to maintain the strategic depth that we won through forty years of the Cold War are much smaller than those it took to secure this strategic depth or those that would be required if we lost it.” (p. 6)

[9] U.S. Department of Defense. (1992, April 16). Defense planning guidance, FY 1994–1999. “The sense that regional aggression could be opposed by the U.S. will be an important factor in inducing nations to work together to stabilize crises and resist or defeat aggression. For most countries, a general interest in international stability and security will not be enough to induce them to put themselves at risk simply in the hope that othe~s will join them. Only a nation that is strong enough to act decisively can provide the leadership needed to encourage others to resist aggression. Collective security failed in the 1930s because no strong power was willing to provide the leadership behind which less powerful countries could rally against Fascism. It worked in the Gulf because the United States was willing and able to provide that leadership. Thus, even when a broad potential coalition exists, leadership will be necessary to actualize it. The perceived capability of the U.S. to act independently, if necessary, is thus an important factor even in those cases where we do not actually do so. It will not always be incumbent upon us to assume a leadership role. In some cases, we will promote the assumption of leadership by others, such as the United Nations or regional organizations. But we will not ignore the need to be prepared to protect our critical interests and honor our commitments with only limited additional help, or even alone, if necessary. A future President will thus need to have options that will allow him to lead and, where the international reaction proves sluggish or inadequate, to act to protect our critical interest. In the end, there is no contradiction between US leadership and multilateral action. History shows it is precisely U.S. leadership is the necessary prerequisite for effective international action. As a nation, we have paid dearly in the past for letting our capabilities fall and our will be questioned. There is a moment in time when a smaller, ready force can preclude an arms race, a hostile move or a conflict. Once lost that moment cannot be recaptured by many thousands of soldiers poised on the edge of combat. Our efforts to rearm and to understand our danger before World War II came too late to spare us and others a global conflagration. Five years after our resounding global victory in World War II, we were nearly pushed off the Korean peninsula by a third rate power. We erred in the past when we failed to plan forces befitting our role in the world. And we paid dearly for our error.” (p. 7)

[10] U.S. Department of Defense. (1992, April 16). Defense planning guidance, FY 1994–1999. “The new technology embodied in the SDI program has made ballistic missile defense capability a realistic, achievable. and affordable concept. We need to deploy missile defenses not only to protect ourselves and our forward deployed forces, but also to have the ability to extend protection to others. Like "extended deterrence" provided by our nuclear forces, defenses can contribute to a regime of "extended protection" for friends and allies and further strengthen a democratic security community. This is why, with the support of Congress, as reflected in the Missile Defense Act of 1991, we are seeking to move forward the day when defenses will protect the community of nations embracing democratic values from international outl,aws armed with ballistic missilesThe new technology embodied in the SDI program has made ballistic missile defense capability a realistic, achievable. and affordable concept. We need to deploy missile defenses not only to protect ourselves and our forward deployed forces, but also to have the ability to extend protection to others. Like "extended deterrence" provided by our nuclear forces, defenses can contribute to a regime of "extended protection" for friends and allies and further strengthen a democratic security community. This is why, with the support of Congress, as reflected in the Missile Defense Act of 1991, we are seeking to move forward the day when defenses will protect the community of nations embracing democratic values from international outl,aws armed with ballistic missiles.” (p. 8)

II. The Vassal Architecture

[11] Hersh, S. (2023, March 26). Seymour Hersh: “The cover-up”. International Affairs. https://en.interaffairs.ru/article/seymour-hersh-the-cover-up/. ““It’s been six weeks since I published a report, based on anonymous sourcing, naming President Joe Biden as the official who ordered the mysterious destruction last September of Nord Stream 2, a new $11-billion pipeline that was scheduled to double the volume of natural gas delivered from Russia to Germany. The story gained traction in Germany and Western Europe, but was subject to a near media blackout in the US.”

[12] Hersh, S. (2023, March 26). Seymour Hersh: “The cover-up”. International Affairs. https://en.interaffairs.ru/article/seymour-hersh-the-cover-up/. “Press aides for the White House and Central Intelligence Agency have consistently denied that America was responsible for exploding the pipelines, and those pro forma denials were more than enough for the White House press corps. There is no evidence that any reporter assigned there has yet to ask the White House press secretary whether Biden had done what any serious leader would do: formally “task” the American intelligence community to conduct a deep investigation, with all of its assets, and find out just who had done the deed in the Baltic Sea. According to a source within the intelligence community, the president has not done so, nor will he. Why not? Because he knows the answer.”

[13] Hersh, S. (2023, March 26). Seymour Hersh: “The cover-up”. International Affairs. https://en.interaffairs.ru/article/seymour-hersh-the-cover-up/. “In early March, President Biden hosted German Chancellor Olaf Scholz in Washington. The trip included only two public events ,  a brief pro forma exchange of compliments between Biden and Scholz before the White House press corps, with no questions allowed; and a CNN interview with Scholz by Fareed Zakaria, who did not touch on the pipeline allegations. The chancellor had flown to Washington with no members of the German press on board, no formal dinner scheduled, and the two world leaders were not slated to conduct a press conference, as routinely happens at such high-profile meetings. Instead, it was later reported that Biden and Scholz had an 80-minute meeting, with no aides present for much of the time. There have been no statements or written understandings made public since then by either government, but I was told by someone with access to diplomatic intelligence that there was a discussion of the pipeline exposé and, as a result, certain elements in the Central Intelligence Agency were asked to prepare a cover story in collaboration with German intelligence that would provide the American and German press with an alternative version for the destruction of Nord Stream 2. In the words of the intelligence community, the agency was “to pulse the system” in an effort to discount the claim that Biden had ordered the pipelines’ destruction...” stresses Seymour Hersh.”

[14] Van Rensbergen, A. (2025, April 14). EU's thirst for natural gas risks swapping one dependency for another. The Parliament Magazine. https://www.theparliamentmagazine.eu/news/article/the-eus-thirst-for-natural-gas-risks-swapping-one-dependency-for-another. “After imposing a sweeping 20% tariff on EU goods at the start of the month ,  but before pausing that higher rate a week later, leaving in place a 10% “baseline” rate ,  Trump suggested that the EU should buy $350 billion worth of liquefied natural gas (LNG) each year to narrow its goods trade surplus with the US. “They're going to have to buy their energy from us, because they need it and they're going to have to buy it from us,” he said on 7 April. Trump’s demands notwithstanding, the bloc has been increasing imports of American LNG since it began phasing out Russian supplies in 2022. The US was already the EU’s largest supplier of LNG by 2023, according to Eurostat data, an advantage it maintained in 2024, despite a 5.5% year-on-year uptick in Russian imports. LNG tankers from the US supplied 17% of Europe’s natural gas in 2024, making the US Europe’s third-largest supplier of gas in absolute terms ,  be it from pipelines or LNG ,  after Norway and Russia, according to the International Energy Agency. Upon returning to office in January, Trump subsequently lifted former President Joe Biden’s ban on LNG terminal construction to prepare for more exports.”

[15] Van Rensbergen, A. (2025, April 14). EU's thirst for natural gas risks swapping one dependency for another. The Parliament Magazine. https://www.theparliamentmagazine.eu/news/article/the-eus-thirst-for-natural-gas-risks-swapping-one-dependency-for-another. “In early May, the European Commission unveiled a long-awaited proposal to phase out all Russian gas imports by the end of 2027, including a ban on new contracts starting this year. The announcement followed the EU executive’s move in late March to impose its first restrictions on Russian LNG transited via European ports to non-EU countries, hindering Russia’s global sales.”

[16] Van Rensbergen, A. (2025, April 14). EU's thirst for natural gas risks swapping one dependency for another. The Parliament Magazine. https://www.theparliamentmagazine.eu/news/article/the-eus-thirst-for-natural-gas-risks-swapping-one-dependency-for-another. “The US has encouraged Europe’s decoupling from Russia and stepped up with supplies of its own. During his first term, Trump imposed sanctions on all parties involved in the construction of the Nord Stream 2 submarine gas connection between Russia and Germany, prodding Berlin instead to buy “freedom gas” from the US. Shortly after Trump’s re-election in November 2024, Commission President Ursula von der Leyen proposed opening negotiations to increase imports of American LNG. And at a meeting of EU ministers on 7 April, the bloc's commissioner for trade, Maroš Šefčovič, confirmed LNG is on the table in potential negotiations over tariffs. The EU is now weighing options to pool demand for American LNG through its joint purchasing platform. The EU’s executive body does not act as a direct purchaser of gas, but it has coordinated joint purchases since 2023 to boost the bargaining power of member states. Some in the EU see this increased trade as a net positive. Roberts Zile, a member of the European Parliament from the right- wing European Conservatives and Reformists group (ECR), has written in these pages that there are both political and economic advantages to deepening the EU’s energy partnership with the US, particularly when the bloc is still not free of its Russia dependency. “Energy security is part of the larger general security issue,” Zile told The Parliament. “Russia is waging war in Ukraine. Therefore, it’s just unacceptable to buy LNG from Russia.” Meanwhile, Szymon Kardas, a senior policy fellow at the European Council of Foreign Relations, argued the US was a safer partner than Russia for structural as well as political reasons. European companies deal directly with private American firms, not a state-run behemoth like Russia's Gazprom. “Trump is unpredictable in many ways, but he doesn’t run the energy sector in a way the Kremlin does in Russia,” he told The Parliament. “There’s always the risk of tariffs, but it’s incomparable with the risks we had vis-à-vis Russia.””

[17] The Guardian. (2026, January 21). Trump has growing stranglehold over EU and UK energy supply, study shows. The Guardian. https://www.theguardian.com/world/2026/jan/21/trump-us-stranglehold-eu-uk-energy-supply-lng. “Donald Trump has a stranglehold over EU and UK energy supply as a result of Europe swapping its dependency on Russia for reliance on the US, analysis has shown. In part due to the war in Ukraine and the imposition of sanctions on Russian pipeline gas, European countries have become dependent on shipments of US liquified natural gas (LNG), according to a paper co-authored by the Clingendael Institute, in The Hague, the Ecologic Institute, in Berlin, and the Norwegian Institute of International Affairs.”

[18] The Guardian. (2026, January 21). Trump has growing stranglehold over EU and UK energy supply, study shows. The Guardian. https://www.theguardian.com/world/2026/jan/21/trump-us-stranglehold-eu-uk-energy-supply-lng. “Data showed that imports to the European Economic Area of US LNG – natural gas that is supercooled to make it easier to transport – increased by 61% in 2025. The EEA comprises the 27 EU states plus Iceland, Liechtenstein and Norway. Imports to the EEA were up 485% compared with 2019 and US LNG now accounted for 59% of LNG imports to the EU, according to gas flows data from December. In 2024, the UK covered 50% of its gas demand with domestic production and 33% with imports from the EEA. It is otherwise reliant on LNG, of which shipments from the US made up 68% of its total imports.”

[19] The Guardian. (2026, January 21). Trump has growing stranglehold over EU and UK energy supply, study shows. The Guardian. https://www.theguardian.com/world/2026/jan/21/trump-us-stranglehold-eu-uk-energy-supply-lng. “Pipeline gas imports from Russia accounted for 60% of EEA gas imports in 2019 but by 2025 this share had fallen to 8%.”

[20] The Guardian. (2026, January 21). Trump has growing stranglehold over EU and UK energy supply, study shows. The Guardian. https://www.theguardian.com/world/2026/jan/21/trump-us-stranglehold-eu-uk-energy-supply-lng. ““The US national security strategy of 2025 explicitly frames energy exports as a way to project power. The US has tried a similar approach in the 1980s under Ronald Reagan, attempting to talk European partners out of gas trade with the USSR. But back then there was no technology for liquefying natural gas, so Europe had no alternative but Russian pipeline gas.””

[21] The Guardian. (2026, January 21). Trump has growing stranglehold over EU and UK energy supply, study shows. The Guardian. https://www.theguardian.com/world/2026/jan/21/trump-us-stranglehold-eu-uk-energy-supply-lng. ““At the moment, gas reserves in the EU are very low, the lowest in years, and lower than at the outset of the war in Ukraine. If we have a cold winter and tensions with the US, leading to further price increases and reserve depletion, we might see a really dramatic energy crisis in the coming months,” he said. “The EU is considering breaking trade deals with the US in response to the Greenland tariffs, but as policymakers in Brussels point out, there is no real alternative to the gas from the US at the moment.” Raffaele Piria, the initiator of the report and a senior researcher at the Ecologic Institute, said the UK, now outside the single market, was just as exposed as its European allies. “The UK is affected by exactly the same geopolitical and economic vulnerabilities as the European Economic Area, and in fact it is physically and economically fully integrated in the European gas grid and gas market,” he said.”

[22] The Guardian. (2026, January 21). Trump has growing stranglehold over EU and UK energy supply, study shows. The Guardian. https://www.theguardian.com/world/2026/jan/21/trump-us-stranglehold-eu-uk-energy-supply-lng. ““Since the invasion of Ukraine, the EU has paid a high price for its reliance on Russia in energy trade. The US seemed to be a reliable alternative. Historically, interferences by the US government in gas markets to exert pressure on Europe were considered unthinkable. In the current geopolitical context, this assumption is questionable.””

[23] ADI Analytics. (2022, October 3). German energy markets: Between a rock and a hard place. ADI Analytics. https://adi-analytics.com/2022/10/03/german-energy-markets-between-a-rock-and-a-hard-place/. “In 2021, Germany relied on Russia to supply 55% of their gas imports. By June 2022, that amount declined to 26%, partly due to reduced flows on the Nord Stream 1 pipeline. In late August, Gazprom completely shut off the pipeline, stating that it would only last a few days. Then, in a late announcement on Friday, September 2, just hours after G7 countries imposed a price cap on Russian oil, Gazprom announced that the shutdown would be indefinite.”

[24] ADI Analytics. (2022, October 3). German energy markets: Between a rock and a hard place. ADI Analytics. https://adi-analytics.com/2022/10/03/german-energy-markets-between-a-rock-and-a-hard-place/. “The energy crisis is affecting energy prices and the economy. Electricity prices have soared, with the average price of €284.42 per MWh in 2022 versus €71.62 over the same period in 2021, nearly a 300% increase. Natural gas prices show a similar trend, with EU import prices climbing over 300%. Consumers have reported even higher increases to their utility bills.”

[25] ADI Analytics. (2022, October 3). German energy markets: Between a rock and a hard place. ADI Analytics. https://adi-analytics.com/2022/10/03/german-energy-markets-between-a-rock-and-a-hard-place/. “As a result of these prices and the growing economic concerns worldwide, German consumer confidence is at record lows and German businesses have growing concerns about bankruptcies that could further disrupt the supply chain. Recently, the Organization for Economic Cooperation and Development predicted that Germany’s economy will shrink by 0.7% next year, the worst among the G7 countries and the only one with negative growth predicted.”

[26] ADI Analytics. (2022, October 3). German energy markets: Between a rock and a hard place. ADI Analytics. https://adi-analytics.com/2022/10/03/german-energy-markets-between-a-rock-and-a-hard-place/. “The German government has made several announcements recently to combat the energy crisis. On September 5, Germany’s Federal Ministry for Economic Affairs and Climate Action (BMWK) announced that two of Germany’s three remaining nuclear power plants will remain available to produce electricity, if necessary, through mid-April 2023 to supply power southern Germany over the winter. In addition to delaying the closure of these power plants, Germany has re-opened or extended the closing dates of at least 20 coal-fired power plants. The increased demand for coal has caused prices to double since the beginning of the year, and currently sits at $435 per ton at the time of this writing.”

[27] ADI Analytics. (2022, October 3). German energy markets: Between a rock and a hard place. ADI Analytics. https://adi-analytics.com/2022/10/03/german-energy-markets-between-a-rock-and-a-hard-place/. “Extending the life of a few nuclear and coal power plants may help in the short term, but a longer-term solution is still needed to ensure a cheap and reliable supply to German consumers. Diversifying the overall energy mix, including a greater degree of investment in the natural gas infrastructure (e.g., to source LNG from the U.S., Asia-Pacific, and Africa) will be an important long-term solution.”

[28] Deutsche Welle. (2022, October 12). Energy crisis: Europe's winter woes driven by high prices. DW. https://www.dw.com/en/energy-crisis-europe-faces-winters-of-discontent-with-high-prices-here-to-stay/a-63412238. “As for gas, the European benchmark rose to a record high of €335 ($337) per megawatt-hour (MWh) in the spring. Since then, prices have ,  as with https://amp.dw.com/en/energy-crisis-europe-faces-winters-of-discontent-with-high-prices-here-to-stay/a-63412238 Page 3 of 6 Energy crisis: Europe's winter woes driven by high prices 15.04.2026, 14:41 oil ,  fallen, back to about €225 per MWh, though are still up 300% since the start of 2022. Gas prices are directly linked to electricity prices, so if they stay high, electricity prices follow. The European Commission has announced reforms of the electricity market that would see a decoupling of gas and power prices, but the timing for that is not clear. Kremlin-controlled energy giant Gazprom has said European natural gas prices could climb by another 60% this winter. In retaliation against sanctions following Russia's invasion of Ukraine, Moscow cut the flow of natural gas to Europe via the Nord Stream 1 pipeline to 20%, sending prices rocketing.”

[29] Deutsche Welle. (2022, October 12). Energy crisis: Europe's winter woes driven by high prices. DW. https://www.dw.com/en/energy-crisis-europe-faces-winters-of-discontent-with-high-prices-here-to-stay/a-63412238. “Energy price hikes in the past year ,  60% for oil and 400% for natural gas ,  have been driven by rising demand as the coronavirus pandemic wound down and lower supply mainly due to disruptions caused by Russia's attack on Ukraine.”

[30] Deutsche Welle. (2022, October 12). Energy crisis: Europe's winter woes driven by high prices. DW. https://www.dw.com/en/energy-crisis-europe-faces-winters-of-discontent-with-high-prices-here-to-stay/a-63412238. “Imsirovic believes that Europe can survive without Russian oil, which accounts for around 30% of supplies for the EU. But it can't survive without Russian gas, which makes up 40% of gas in the EU. "Without oil, there will be problems, but [Europe] can survive," he said. "But it would really struggle without Russian gas. Lights will probably have to go out next winter."”

[31] Deutsche Welle. (2022, October 12). Energy crisis: Europe's winter woes driven by high prices. DW. https://www.dw.com/en/energy-crisis-europe-faces-winters-of-discontent-with-high-prices-here-to-stay/a-63412238. “The EU is exploring new sources of LNG supply to reduce its reliance on the US to improve its energy security. The US has since surpassed Russia’s share of supplies in its heyday and now accounts for a whopping 60% of Europe’s LNG imports. Looking at the overall EU gas supply mix, which includes pipeline gas (mainly from Norway, Algeria, and Azerbaijan, a new addition to the fuel supply mix), LNG from various sources, and domestic production, US LNG represented about 20–25% of total EU gas supply in 2025”

[32] Deutsche Welle. (2022, October 12). Energy crisis: Europe's winter woes driven by high prices. DW. https://www.dw.com/en/energy-crisis-europe-faces-winters-of-discontent-with-high-prices-here-to-stay/a-63412238. “At a press conference on January 31, European Commissioner for Energy Dan Jørgensen said the EU would remain a major customer for US LNG but was now actively seeking alternatives. “We are looking at high-potential exporters including Canada, Qatar and Algeria,” Jørgensen said. “Europe doesn’t want to cut off American LNG, but we have decided that we now need to find additional strategic options.””

[33] Deutsche Welle. (2022, October 12). Energy crisis: Europe's winter woes driven by high prices. DW. https://www.dw.com/en/energy-crisis-europe-faces-winters-of-discontent-with-high-prices-here-to-stay/a-63412238. “Nevertheless, the EU-US pair remains the largest trade partnership on the planet. The American market accounts for a fifth of EU exports, generating a goods turnover of just under $1 trillion and another $400bn from services. In 2025 the EU is estimated to have earned $25bn profit from its trade surplus with the US.”

[34] Sputnik Africa. (2025, June 29). Anti-Russian sanctions push average EU gas prices up 150% in last four years. Sputnik Africa. https://en.sputniknews.africa/20250629/anti-russian-sanctions-push-average-eu-gas-prices-up-150-in-last-four-years-1074852802.html. “The price of gas for the European Union has increased 2.5-fold since the introduction of large-scale sanctions against Russia ,  in just four years, from 2021 to 2025, it has increased twice as much as in the previous 20 years, according to Sputnik's calculations based on Eurostat data. Thus, in April 2021, the average price of a thousand cubic meters of gas for the EU was 206 euros, and it rose to 523.5 euros in April of this year. At the same time, over the previous four years, the increase in the price of this type of fuel in the EU was only 1.7%: in April 2017, a thousand cubic meters could be purchased for only 202.5 euros. Twenty years ago, in mid-spring 2000, a thousand cubic meters cost the EU 123.9 euros. In 2021, LNG accounted for only a third of all purchases by the union, but in 2025 it was already just slightly less than half. At the same time, the price of importing this type of fuel over the past four years has increased to 645.5 euros from 257 euros. The price of pipeline gas is still lower than liquefied gas ,  417 euros. In 2021 the EU bought a thousand cubic meters of pipeline gas for only 178.7 euros. Thus, EU spending on gas in April 2025 increased to 8.05 billion euros from 3.5 billion four years earlier, despite the fact that import volumes decreased by 8.5% to 15.4 billion cubic meters.”

[35] Eurostat. (2025, June 13). Industrial production down by 2.4% in the euro area and by 1.8% in the EU (Euro Indicators No. 4-13062025-AP). European Commission. https://ec.europa.eu/eurostat/web/products-euro-indicators/w/4-13062025-ap. “In April 2025, compared with March 2025, seasonally adjusted industrial production decreased by 2.4% in the euro area and by 1.8% in the EU, according to first estimates from Eurostat, the statistical office of the European Union. In March 2025, industrial production grew by 2.4% in the euro area and by 1.9% in the EU.”

[36] Deutsche Welle. (2024, April 22). Germany's industrial production expected to sink further. DW. https://www.dw.com/en/germanys-industrial-production-expected-to-sink-further/a-68885656. “Higher energy prices and interest rates have raised costs and dampened investment in a manufacturing sector already grappling with supply chain problems and the aftermath of the COVID-19 pandemic, BDI President Siegfried Russwurm noted. "We expect industrial production to decline by 1.5% compared to the previous year," said BDI President Russwurm. The decline ,  according to the business leader. the same as last year ,  is symptomatic of a pattern, "Despite moderate recovery prospects, we must not deceive ourselves: Overall, production figures have been showing a worrying downward trend for years," said Russwurm. Many of Germany's energy-intensive companies have suffered particularly from the sharp rise in energy prices since Russia's invasion of Ukraine.”

[37] Xinhua. (2018, August 18). News analysis: Lessons to learn from Japan's response to U.S. protectionism. Xinhua. http://www.xinhuanet.com/english/2018-08/18/c_137400211.htm. “On Sept. 22, 1985, the United States, during Ronald Reagan's presidency,

signed the Plaza Accord with France, former West Germany, Japan and Britain at the Plaza Hotel in New York City. The agreement was aimed at coping with the over-valuation of the U.S. dollar against currencies of other major economies and the continuous rise of the U.S. trade deficits. However, it was later proven that intervening in exchange rates failed to achieve a trade balance. The rates were just a scapegoat. Moreover, Japan was seriously hurt by its improper response. The East Asian country's strong economic growth ended abruptly at the start of the 1990s, followed by a period of economic stagnation known as the Lost Decade.”

[38] Xinhua. (2018, August 18). News analysis: Lessons to learn from Japan's response to U.S. protectionism. Xinhua. http://www.xinhuanet.com/english/2018-08/18/c_137400211.htm. “The U.S. dollar continued to rise in the early 1980s. As a result, trade deficits of the United States kept growing. The U.S. inflation rates were as high as 13 percent in 1979 and the U.S. economy was pulled into recession twice between 1980 and 1982. To end the downward spiral of the economy, Paul Volcker, then chairman of the Federal Reserve, raised interest rates to curb inflation. However, the move led to a rise in both the exchange rates and the trade deficits. From 1980 to 1985, the overall appreciation of the U.S. dollar against the Japanese yen, Deutsche mark, French franc and British pound reached around 50 percent, according to the Organization for Economic Cooperation and Development, putting considerable pressure on U.S. exports. At the same time, Japan's fast-growing, export-oriented economy has further brought up the U.S. deficits. The United States was able to achieve a current account surplus in 1980 but by 1985, its current account deficits accounted for 2.71 percent of the gross domestic product (GDP). It was against the aforementioned background that the signing of the Plaza Accord occurred. Though France, former West Germany and Britain made concessions, Japan was the one that compromised the most.”

[39] Xinhua. (2018, August 18). News analysis: Lessons to learn from Japan's response to U.S. protectionism. Xinhua. http://www.xinhuanet.com/english/2018-08/18/c_137400211.htm. “According to the agreement, Japan should further open up its domestic market for foreign goods and services, loosen private sector supervision to boost vitality, adopt a monetary policy that allows more flexibility in the exchange rates of the yen, and make its financial market more open. Furthermore, Tokyo was also asked to reduce government deficits and create conditions conducive to private sector growth, as well as boost domestic consumption and encourage mortgage loans. Among the six measures, the appreciation of the yen against the U.S. dollar was the core goal. In the short run, measures agreed by the Plaza Accord effectively curbed the overvaluation of the dollar and shaved off the deficits. In 1991, U.S. trade returned to a surplus. However, as economic globalization accelerated in 1995, the country was again confronted with challenges in its foreign trade.”

[40] Finance Ministers and Central Bank Governors of France, Germany, Japan, the United Kingdom, and the United States. (1985, September 22). Announcement of [G5] finance ministers and central bank governors (the Plaza Agreement). Yale Program on Financial Stability. https://elischolar.library.yale.edu/ypfs-documents/504. “4. They believe that this convergence of favorable economic performance has been influenced increasingly by policy initiatives undertaken by their countries. Moreover,each of their countries is committed to the implementation of further policy measures which will reinforce favorable convergence and strengthen the sustainability of the current expansion. 5. Ministers and Governors were of the view that recent shifts in fundamental economic conditions among their countries together with policy commitments for the future, have not been reflected fully in exchange markets.”

[41] Finance Ministers and Central Bank Governors of France, Germany, Japan, the United Kingdom, and the United States. (1985, September 22). Announcement of [G5] finance ministers and central bank governors (the Plaza Agreement). Yale Program on Financial Stability. https://elischolar.library.yale.edu/ypfs-documents/504. “10. These positive economic developments notwithstanding, there are large imbalances in external positions which pose potential problems, and which reflect a wide range of factors. Among these are: the deterioration in its external position which the U.S.experienced from its period of very rapid relative growth: the particularly large impact on the U.S. current account of the economic difficulties and the adjustment efforts of some major developing countries; the difficulty of trade access in some markets; and the appreciation of the U.S. dollar. The interaction of these factors­­ relative growth rates, the debt problems of developing countries, and exchange rate development­­ has contributed to large, potentially destabilizing external imbalances among major industrial countries. In particular, the United States has a large and growing current account deficit, and Japan, and to a lesser extent Germany, large and growing current account surpluses.

[42] Finance Ministers and Central Bank Governors of France, Germany, Japan, the United Kingdom, and the United States. (1985, September 22). Announcement of [G5] finance ministers and central bank governors (the Plaza Agreement). Yale Program on Financial Stability. https://elischolar.library.yale.edu/ypfs-documents/504. “11. The U.S. current account deficit, together with other factors is now contributing to protectionist pressures which, if not resisted, could lead to mutually destructive retaliation with serious damage to the world economy: world trade would shrink, real growth rates could even turn negative, unemployment would rise still higher, and debt­burdened developing countries would be unable to secure the export earnings they vitally need.”

[43] Finance Ministers and Central Bank Governors of France, Germany, Japan, the United Kingdom, and the United States. (1985, September 22). Announcement of [G5] finance ministers and central bank governors (the Plaza Agreement). Yale Program on Financial Stability. https://elischolar.library.yale.edu/ypfs-documents/504. “17. The Ministers of Finance and Central Bank Governors agreed that recent economic developments and policy changes, when combined with the specific policy intentions described in the attached statements. provide a sound basis for continued and a more balanced expansion with low inflation. They agreed on the importance of these improvements for redressing the large and growing external imbalances that have developed. In that connection they noted that further market opening measures will be important to resisting protectionism 18. The Ministers and Governors agreed that exchange rates should play a role in adjusting external imbalances. In order to do this, exchange rates should better reflect fundamental economic conditions than has been the case. They believe that agreed policy actions must be implemented and reinforced to improve the fundamentals further, and that in view of the present and prospective changes in fundamentals, some further orderly appreciation of the main non­dollar currencies against the dollar is desirable. They stand ready to cooperate more closely to encourage this when to do so would be helpful.”

[44] Finance Ministers and Central Bank Governors of France, Germany, Japan, the United Kingdom, and the United States. (1985, September 22). Announcement of [G5] finance ministers and central bank governors (the Plaza Agreement). Yale Program on Financial Stability. https://elischolar.library.yale.edu/ypfs-documents/504. “1. To pursue vigorously disinflation. 2. To secure the attainment of monetary aggregates growth targets, consistent with decelerating inflation. 3. To curb public expenditures progressively so as to lower the tax burden while reducing the government borrowing requirement. 4. To foster the investment recovery allowed for by the improved financial situation in the business sector 5. To take further steps towards liberalization and modernization of financial markets, to increase competition in the financial sector so as to reduce financial intermediation costs, and give a greater role to interest rates in monetary control. 6. To foster job creation through the implementation of an innovative and active policy in the field of education and training and by promoting constructive discussions between social partners on work organization. 7. To resist protectionism.”

[45] Finance Ministers and Central Bank Governors of France, Germany, Japan, the United Kingdom, and the United States. (1985, September 22). Announcement of [G5] finance ministers and central bank governors (the Plaza Agreement). Yale Program on Financial Stability. https://elischolar.library.yale.edu/ypfs-documents/504. “In particular, the Government of Japan will implement policies with the following explicit intentions. 1. Resistance of protectionism and steady implementation of the Action Program announced on July 30 for the further opening up of Japan's domestic market to foreign goods and services. 2. Full utilization of private sector vitality through the implementation of vigorous deregulation measures. 3. Flexible management of monetary policy with due attention to the yen rate. 4. Intensified implementation of financial market liberalization and of the yen, so that the yen fully reflects the underlying strength of the Japanese economy. 5. Fiscal policy will continue co focus on the twin goals of reducing the central government deficit and providing a pro­growth environment for the private sector. Within that framework. local governments may be favorably allowed to make additional investments in this FY 1985, taking into account the individual circumstances of the region. 6. Efforts to stimulate domestic demand will focus on increasing private consumption and investment through measures to enlarge consumer and mortgage credit markets.”

[46] Finance Ministers and Central Bank Governors of France, Germany, Japan, the United Kingdom, and the United States. (1985, September 22). Announcement of [G5] finance ministers and central bank governors (the Plaza Agreement). Yale Program on Financial Stability. https://elischolar.library.yale.edu/ypfs-documents/504. “In order to achieve these objectives, the United States Government will: 1. Continue efforts to reduce government expenditures as a share of GNP in order to reduce the fiscal deficit and to free up resources for the private sector. 2. Implement fully the deficit reduction package for fiscal year 1986. This package passed by Congress and approved by the President will not only reduce by over 1 percent of GNP the budget for FY 1986, but lay the basis for further significant reductions in the deficit in subsequent years. 3. Implement revenue­neutral tax reform which will encourage savings, create new work incentives, and increase the efficiency of the economy, thereby fostering non inflationary growth. 4. Conduct monetary policy to provide a financial environment conducive to sustainable growth and continued progress toward price stability. 5. Resist protectionist measures.”

[47] CSIS. (2023, September 25). "Guardrails" on CHIPS Act funding to restrict investments in China may restrict participation in CHIPS Act incentives. Perspectives on Innovation. https://www.csis.org/blogs/perspectives-innovation/guardrails-chips-act-funding-restrict-investments-china-may-restrict. “On March 23, 2023, the CHIPS Program Office at the Department of Commerce (DOC) released a proposed rule and request for comment outlining a series of “national security guardrails” for the $39 billion in federal incentives for semiconductor manufacturing released by the CHIPS and Science Act of 2022 (CHIPS Act or Act). The guardrails are designed to limit the extent to which companies receiving CHIPS Act incentives could expand semiconductor investments in “countries of concern”, China, Iran, Russia, and North Korea. Commerce stated that “These guardrails will advance shared national security interests as the U.S. continues coordinating and collaborating with allies and partners to make global supply chains more resilient and diversified.”These proposed guardrails augment stringent export controls on semiconductor equipment to China imposed in October 2022 and the January 2023 U.S.-Japan-Netherlands pact limiting chipmaking tool exports. Commerce Secretary Gina Raimondo said that the guardrails will “help ensure that malign actors do not have access to the cutting- edge technology that can be used against America and our allies.” The Treasury Department concurrently promulgated draft rules to align CHIPS Act tax credits with the DOC guardrails.”

[48] CSIS. (2023, September 25). "Guardrails" on CHIPS Act funding to restrict investments in China may restrict participation in CHIPS Act incentives. Perspectives on Innovation. https://www.csis.org/blogs/perspectives-innovation/guardrails-chips-act-funding-restrict-investments-china-may-restrict. “The CHIPS Act established an Incentive Program making federal incentives (including grants, loans, and loan guarantees) available for the construction, expansion, and modernization of U.S. semiconductor fabrication, assembly, testing, and advanced packaging facilities. It also allocates funding to support research and development in semiconductors and associated materials and production equipment. The CHIPS Act requires incentive recipients to enter into an agreement with the DOC prohibiting any "significant transaction" involving the "material expansion of semiconductor manufacturing capacity" in countries of concern. The proposed rules do provide two exceptions to the prohibition for legacy semiconductors. The first applies to a recipient’s existing facilities or equipment for manufacturing “legacy semiconductors” that exist on the date of the award so long as the facility does not undergo a “significant renovation”. The second applies to new facilities so long as at least 85 percent of its output is incorporated in end products used or consumed in the host country.”

[49] CSIS. (2023, September 25). "Guardrails" on CHIPS Act funding to restrict investments in China may restrict participation in CHIPS Act incentives. Perspectives on Innovation. https://www.csis.org/blogs/perspectives-innovation/guardrails-chips-act-funding-restrict-investments-china-may-restrict. “The proposed DOC rules also prohibit incentive recipients from knowingly participating in joint research or licensing with a foreign entity of concern that relates to a technology or product that raises national security concerns. Existing plants in a country of concern may upgrade their technology but U.S. export controls may apply. CHIPS Act restrictions are to remain in place for 10 years after receipt of federal incentives. Recipients who violate the restrictions are subject to the claw back of up to the full amount of the federal incentives received.”

[50] CSIS. (2023, September 25). "Guardrails" on CHIPS Act funding to restrict investments in China may restrict participation in CHIPS Act incentives. Perspectives on Innovation. https://www.csis.org/blogs/perspectives-innovation/guardrails-chips-act-funding-restrict-investments-china-may-restrict. “But, many U.S. and non-U.S. corporations have privately expressed deep misgivings regarding the potential negative effects to the global semiconductor supply chain. The long-run cumulative effect of Western semiconductor technology restrictions, including export controls, will likely force a fundamental reordering of chipmaking investments away from China, imposing major cost and operational burdens on firms with a substantial China presence. However, it may also increase the likelihood of supply chain disruptions and raise prices for semiconductor consumers. Korean firms are particularly vulnerable. One industry analyst observed that “companies like Samsung and SK Hynix have a high proportion of their production capacity invested in China. If they cannot upgrade production processes or expand capacity, their business will be greatly affected.” He continued: “It is still a brutal  fact that South Korean semiconductor manufacturers will face barriers to investments in the China market for the next 10 years.””

[51] CSIS. (2023, September 25). "Guardrails" on CHIPS Act funding to restrict investments in China may restrict participation in CHIPS Act incentives. Perspectives on Innovation. https://www.csis.org/blogs/perspectives-innovation/guardrails-chips-act-funding-restrict-investments-china-may-restrict. “35 individuals and entities have responded to the request for comments on the draft DOC guardrails rules, and 27 comments were published, the others containing confidential business information. For the most part, the comments consist of generalized expressions of concern over unintended consequences and in particular, what is characterized as an overreach by the Department with respect to the term “significant renovation.””

[52] CSIS. (2023, September 25). "Guardrails" on CHIPS Act funding to restrict investments in China may restrict participation in CHIPS Act incentives. Perspectives on Innovation. https://www.csis.org/blogs/perspectives-innovation/guardrails-chips-act-funding-restrict-investments-china-may-restrict. “It is important to note that China is demonstrating that it is not without leverage with respect to the global semiconductor supply chain. In July 2023, China imposed export controls on gallium and germanium, materials which, according to the Biden Administration’s 100-day supply chain review report, are used in key emerging technologies in military systems, autonomous vehicles, renewable energy and 5G communications. Gallium and germanium are used to make high-performance compound semiconductors that can handle high power, frequency and voltages. The U.S. has not produced gallium since 1987, and relies on China for over 50 percent of its needs. Similarly, the U.S. produces some germanium but depends on imports from China for about 53 percent of its requirements. The Chinese government stated that the new export controls were not related to measures by the U.S. and its allies to limit chip technology exports to China. U.S. export controls on technology exports to China may presage additional U.S. measures to curtail U.S. investments in strategic, technology-intensive industries in China. On August 9, 2023, President Biden issued an Executive Order which would create a regulatory mechanism limiting outbound investments in the semiconductor, quantum computing and artificial intelligence industries, while requiring notifications for investments in other sectors. The Treasury Department has released a Notice of Proposed Rulemaking in connection with the proposed curbs, inviting stakeholder input.”

[53] CSIS. (2023, September 25). "Guardrails" on CHIPS Act funding to restrict investments in China may restrict participation in CHIPS Act incentives. Perspectives on Innovation. https://www.csis.org/blogs/perspectives-innovation/guardrails-chips-act-funding-restrict-investments-china-may-restrict. “In short, these reactions suggest that the current language and especially the thresholds envisaged for the proposed guardrails appear to be too stringent and may well be counterproductive in terms of global supply and the health of the global supply chain, ultimately undermining U.S. policy objectives.”

[54] Erten, B., Stiglitz, J. E., & Verhoogen, E. (2025, September 25–26). Employment impacts of the CHIPS Act [Conference draft]. Brookings Papers on Economic Activity, Washington, DC, United States. https://www.brookings.edu/articles/employment-impacts-of-the-chips-act/. “The CHIPS and Science Act, enacted in August 2022, is a key element of the revival of U.S. indus- trial policy. We examine the short-term employment effects of the act. Using quarterly industry-by- county data from the Quarterly Census of Employment and Wages (QCEW), we implement a difference- in-differences design, comparing counties with pre-existing semiconductor facilities to other counties with high-tech industries. We find that counties with pre-existing facilities experienced significant em- ployment gains in the semiconductor sector relative to other counties with high-tech employment. The effects began at the time of the introduction and passage in the Senate of a precursor bill, in anticipation of the signing of the CHIPS Act. The estimates suggest an increase of approximately 100-140 semicon- ductor jobs and a $206-232 rise in average weekly wages in the sector in affected counties. We also find positive spillovers on employment in upstream input sectors and non-residential construction, repre- senting an additional 185-225 jobs per county, but limited broader effects on total county employment or county-level GDP. Simple back-of-the-envelope calculations (which come with caveats) suggest total direct employment effects in the semiconductor sector of 14,900-20,860 jobs and total indirect employ- ment effects in related sectors of 27,565-33,525 jobs.” (p. 0)

[55] Erten, B., Stiglitz, J. E., & Verhoogen, E. (2025, September 25–26). Employment impacts of the CHIPS Act [Conference draft]. Brookings Papers on Economic Activity, Washington, DC, United States. https://www.brookings.edu/articles/employment-impacts-of-the-chips-act/. “This paper provides early empirical evidence on the labor market impacts of the CHIPS Act, fo- cusing on semiconductor-producing counties in the United States. Our estimates suggest an in- crease of approximately 100-140 semiconductor jobs per county in counties with existing semi- conductor production facilities compared to those with high-tech sector employment but no such facilities. We also find an increase of a $206–232 in average weekly wages in the semiconduc- tor sector in affected counties, In addition, we estimate indirect employment gains in upstream input sectors and non-residential construction of 185-225 jobs per affected county. Back-of-the- envelope calculations, which come with caveats as discussed above, suggest that the CHIPS Act directly created to 14,900-20,860 semiconductor jobs in treated counties and indirectly created 27,565-33,525 jobs in related sectors in the same counties. At the same time, there is limited evi- dence of impacts on total county employment or GDP. Our findings suggest that industrial policies can deliver measurable employment benefits in targeted strategic sectors, even in the short run. Yet the extent of these benefits is shaped by the structure of the industry and its supply chain. The capital intensity and automation of semicon- ductor manufacturing imply that job creation may be more limited than anticipated, and the dif- fusion of benefits beyond directly affected sectors remains modest. These results underscore the importance of maintaining realistic expectations about the labor market returns from industrial- policy efforts, particularly in capital-intensive sectors. It will be important to conduct longer-term evaluations of the CHIPS Act and other compo- nents of the revival of U.S. industrial policy, in particular the IRA. CHIPS-funded programs remain active and continue to influence private investment decisions, even as the political environment evolves and debates over the scope of industrial policy continue. The long-term employment impacts may be very different from the short-term, and it will also be important to evaluate the 26 impacts on other outcomes which, due to data constraints, we have not been able to focus on here, including innovation, productivity, and regional economic resilience.” (p. 26-27)

[56] Inilah.com. (2023, February 1). China murka gara-gara pembatasan teknologi chip oleh AS, Belanda dan Jepang [China furious over chip technology restrictions by the US, Netherlands, and Japan]. Inilah.com. https://www.inilah.com/china-murka-gara-gara-pembatasan-teknologi-chip-oleh-as-jepang-dan-belanda. “Japan Today reported, Tuesday (1/31/2023), the Chinese Ministry of Foreign Affairs did not mention the latest developments but accused the US of abusing export control and organizing other governments to "maintain its hegemony" and detain China. The United States is trying to prevent China from acquiring the most powerful chips and processor technology that will help its young industry develop the ability to make it more independent.”

[57] Inilah.com. (2023, February 1). China murka gara-gara pembatasan teknologi chip oleh AS, Belanda dan Jepang [China furious over chip technology restrictions by the US, Netherlands, and Japan]. Inilah.com. https://www.inilah.com/china-murka-gara-gara-pembatasan-teknologi-chip-oleh-as-jepang-dan-belanda. “"This is a violation of market principles and international trade order," said ministry spokesman, Mao Ning. He said it "undermines the stability of the global industry and supply chain." The US-Netherlands-Japan government agreed to limit the export of semiconductor production equipment to China. The agreement mainly targets ASML in the Netherlands as well as Nikon and Tokyo Electron in Japan. The US has "rst imposed restrictions on the export of equipment to China. However, US companies in that sector object to complying with it. They are worried that companies outside the US will replace their position to the Chinese market. Therefore, the US approached Japan and the Netherlands which are the main producers of semiconductor production equipment. US investment bank, Goldman Sach, said that export restrictions are not the only US maneuver. In 2022, the US passed a law or as the CHIPS Act to spur the production of domestic semiconductors. "We believe the CHIPS Act is more appropriate to be seen as a US geopolitical strategy than an e!ort to replace Asia which has an important position in the global semiconductor supply chain," said Bloomberg.”

[58] Inilah.com. (2023, February 1). China murka gara-gara pembatasan teknologi chip oleh AS, Belanda dan Jepang [China furious over chip technology restrictions by the US, Netherlands, and Japan]. Inilah.com. https://www.inilah.com/china-murka-gara-gara-pembatasan-teknologi-chip-oleh-as-jepang-dan-belanda. “US manufacturing is not attractive because of its high cost compared to Asia. Price di!erence up to 18%. As a result, US participation in the global semiconductor market decreased. The US economy will remain at 12% in 2021, compared to 37% in 1990.”

[59] Inilah.com. (2023, February 1). China murka gara-gara pembatasan teknologi chip oleh AS, Belanda dan Jepang [China furious over chip technology restrictions by the US, Netherlands, and Japan]. Inilah.com. https://www.inilah.com/china-murka-gara-gara-pembatasan-teknologi-chip-oleh-as-jepang-dan-belanda. “The US continues to dominate the semiconductor manufacturing machinery sector. US Company LAM and Applied Materials marketed devices that combine millions of transistors and other components into one electronic device. Another US company, KLA-Tencor, dominates the quality control and semiconductor testing market. Tokyo Electron has a joint venture with LAM and Applied Materials. Meanwhile, Nikon has partnered with ASML in the "eld of UV printers that produce semiconductor chips. This duo dominates around 80% of the global market. ASML produces machines called DUV and EUV. Most EUV equipment is produced to produce 7-nano or smaller semiconductors, which is half of ASML sales. So far, ASML has provided older DUVs from EUVs to the Chinese market. ASML will sell its DUV machine to China, generating sales of $2.35 billion in 2022 and $2.17 billion in 2021.”

[60] U.S. Department of Commerce, Bureau of Industry and Security. (2025, August 29). Department of Commerce closes export controls loophole for foreign-owned semiconductor fabs in China [Press release]. https://www.bis.gov/press-release/commerce-closes-export-controls-loophole-foreign-owned-semiconductor-fabs-china. “Today, the Department of Commerce’s Bureau of Industry and Security (BIS) closed a Biden-era loophole that allowed a handful of foreign companies to export semiconductor manufacturing equipment and technology to China license-free. Now these companies will need to obtain licenses to export their technology, putting them on par with their competitors. The loophole is known as the Validated End-User (VEU) program. In 2023, the Biden Administration expanded the VEU program to allow a select group of foreign semiconductor manufacturers to export most U.S.-origin goods, software, and technology license-free to manufacture semiconductors in China. No U.S.-owned fab has this privilege ,  and now, following today’s decision, no foreign-owned fab will have it either. Former VEU participants will have 120 days following publication of the rule in the Federal Register to apply for and obtain export licenses. Going forward, BIS intends to grant export license applications to allow former VEU participants to operate their existing fabs in China. However, BIS does not intend to grant licenses to expand capacity or upgrade technology at fabs in China. Jeffrey Kessler, Under Secretary of Commerce for Industry and Security, stated: “The Trump Administration is committed to closing export control loopholes ,  particularly those that put U.S. companies at a competitive disadvantage. Today’s decision is an important step towards fulfilling this commitment.””

[61] Korea JoongAng Daily. (2025, August 31). U.S. cuts off Samsung and SK's Chinese plants from importing chipmaking tools: 'It risks opening market space'. Korea JoongAng Daily. https://koreajoongangdaily.joins.com/news/2025-08-31/business/industry/US-cuts-off-Samsung-and-SKs-Chinese-plants-from-importing-chipmaking-tools-It-risks-opening-market-space/2388075. “The U.S. Commerce Department revoked the validated end-user (VEU) status of Samsung Electronics and SK hynix plants in China, cutting off a fast track for importing advanced chipmaking tools and tightening the squeeze on Korean memory makers caught between Washington and Beijing. "Today, the Department of Commerce’s Bureau of Industry and Security closed a Biden-era loophole that allowed a handful of foreign companies to U.S. cuts off Samsung and SK's Chinese plants from importing chipmaking tools: 'It risks opening market space' 15.04.2026, 15:05 export semiconductor manufacturing equipment and technology to China license free," the Bureau of Industry and Security said in a revision posted on Friday.”

[62] Korea JoongAng Daily. (2025, August 31). U.S. cuts off Samsung and SK's Chinese plants from importing chipmaking tools: 'It risks opening market space'. Korea JoongAng Daily. https://koreajoongangdaily.joins.com/news/2025-08-31/business/industry/US-cuts-off-Samsung-and-SKs-Chinese-plants-from-importing-chipmaking-tools-It-risks-opening-market-space/2388075. “The decision tightens the VEU program, which let approved firms ship some chipmaking tools to China without applying for a license each time. Samsung Electronics and SK hynix used it after Washington imposed broad chip controls in 2022. The U.S. Commerce Department's VEU revocation stretches to SK hynix's plant in Dalian, China, for which the company paid Intel the full 11 trillion won ($7.9 billion) acquisition price in March.”

[63] Korea JoongAng Daily. (2025, August 31). U.S. cuts off Samsung and SK's Chinese plants from importing chipmaking tools: 'It risks opening market space'. Korea JoongAng Daily. https://koreajoongangdaily.joins.com/news/2025-08-31/business/industry/US-cuts-off-Samsung-and-SKs-Chinese-plants-from-importing-chipmaking-tools-It-risks-opening-market-space/2388075. “Taiwanese manufacturer TSMC, on the other hand, stands outside the latest action because the Donald Trump administration revoked the VEU status of only Korean companies. The VEU program had previously waived restrictions on Korean, U.S. and Taiwanese companies. TSMC said in its March business report that its Nanjing fab had received a permanent VEU. That means Washington does not object to either the Shanghai plant running legacy nodes of 100 nanometers and above or the Nanjing fab that produces 16- and 28-nanometer chips. The United States also keeps VEU status in place for the China-based U.S. companies such the research, development and service centers of AMD, Applied Materials and Lam Research.”

[64] Korea JoongAng Daily. (2025, August 31). U.S. cuts off Samsung and SK's Chinese plants from importing chipmaking tools: 'It risks opening market space'. Korea JoongAng Daily. https://koreajoongangdaily.joins.com/news/2025-08-31/business/industry/US-cuts-off-Samsung-and-SKs-Chinese-plants-from-importing-chipmaking-tools-It-risks-opening-market-space/2388075. “The new move could be critical, as Samsung Electronics produces roughly 40 percent of its NAND in Xi'an, China, while SK hynix makes about 40 percent of its dynamic random access memory (DRAM) in Wuxi City, China, and around 20 percent of its NAND in Dalian. The tighter rule means the companies no longer bring in many tools that had remained permissible outside advanced DRAM and 3-D NAND equipment. In March, SK hynix completed the transfer of Intel’s NAND business and the Dalian manufacturing site and disclosed $3.7 billion in unsecured loans to that plant.”

[65] Korea JoongAng Daily. (2025, August 31). U.S. cuts off Samsung and SK's Chinese plants from importing chipmaking tools: 'It risks opening market space'. Korea JoongAng Daily. https://koreajoongangdaily.joins.com/news/2025-08-31/business/industry/US-cuts-off-Samsung-and-SKs-Chinese-plants-from-importing-chipmaking-tools-It-risks-opening-market-space/2388075. “At this rate, the memory chips Samsung Electronics and SK hynix can make at their China fabs will skew increasingly toward older-generation products. In that market, they will have to compete on price with Chinese rivals.”

[66] China.org.cn. (2025, August 31). China opposes US removal of semiconductor firms from validated end-user list. China.org.cn. http://www.china.org.cn/2025-08/31/content_118051574.shtml. “The U.S. move, driven by self-interest, has turned export controls into a tool, and will cause a serious negative impact on the stability of global semiconductor industrial and supply chains, said the spokesperson, voicing opposition to the U.S. decision. China called on the United States to immediately correct its wrongdoings and safeguard the security and stability of global industrial and supply chains. China will take necessary measures to firmly safeguard the legitimate rights and interests of its enterprises, the spokesperson added.”

[67] China Daily. (2024, May 14). Italy's withdrawal from BRI will not affect economic and trade cooperation. China Daily. https://www.chinadaily.com.cn/a/202405/14/WS66429be8a31082fc043c6dc2.html. “Although the Chinese leader didn't visit Italy this time, Sino-Italian relations had been developing extremely well during the past two decades. In 2004, the two countries signed a comprehensive strategic partnership agreement, and in 2019, Italy joined the Belt and Road Initiative, elevating bilateral ties to a new level. That not only helped boost bilateral trade and promote investment, but also strengthened cooperation between the two sides in their efforts to promote the development of Asia and Africa.”

[68] China Daily. (2024, May 14). Italy's withdrawal from BRI will not affect economic and trade cooperation. China Daily. https://www.chinadaily.com.cn/a/202405/14/WS66429be8a31082fc043c6dc2.html. “Unfortunately, and without offering any sound reason, the current Italian government decided to withdraw from the Belt and Road Initiative in December last year. Italian Prime Minister Giorgia Meloni and Foreign Minister Antonio Tajani have managed to only justify their decision with the far-from-reality logic that Italy exited the Belt and Road Initiative because it did not bring any advantages to the country and, instead, the trade deficit increased in favor of China. The Italian government also said that despite the decision to exit the initiative, the relationship between Italy and China will remain solid.”

[69] China Daily. (2024, May 14). Italy's withdrawal from BRI will not affect economic and trade cooperation. China Daily. https://www.chinadaily.com.cn/a/202405/14/WS66429be8a31082fc043c6dc2.html. “With regard to Italy's exports to China, perhaps unknown to Meloni and Tajani, they have actually increased by 33 percent since the country joined the Belt and Road Initiative, much more than our direct competitors, France Italy should correct wrong decision on BRI which witnessed about 10 percent increase and Germany whose exports shrunk during the same period.”

[70] Corriere della Sera. (2025, December 6). L'effetto dazi, in Italia l'invasione dalla Cina: Deficit commerciale a 45 miliardi [Duties effect, in Italy the invasion from China: trade deficit at  45 billion]. Corriere della Sera. https://www.corriere.it/economia/finanza/25_dicembre_06/effetto-dazi-in-italia-l-invasione-dalla-cina-deficit-commerciale-a-45-miliardi-7eaac0a0-29d1-40d3-a9ca-accab9e73xlk.shtml. “The invasion of Chinese goods is no longer a political slogan, but an economic fact. In 2024 China recorded a trade surplus towards Italy of more than 34 billion In 2024 China recorded a trade surplus towards Italy of more than 34 billion In 2024 China recorded a trade surplus towards Italy of more than 34 billion In 2024 China recorded a trade surplus towards Italy of more than 34 billion, almost double compared to 2019, with exports tripled compared to imports. In the first 10 months of this year, the deficit with Beijing rose to 40.6 billion, reports Istat: The Guides The guides to deepen the most discussed topics at this rate the balance could reach 45 billion by the end of the year, it is estimated. The heart of the imbalance is not what Italy sells to Beijing, traditionally limited, but what it buys: in 2024, over 8 billion in the chemical sector, 7.5 billion between computers, electronics and optics, about 6 billion each in electrical appliances and machinery, the latter sector where, despite exporting more than 3.5 billion, Rome remains in deficit.”

[71] Corriere della Sera. (2025, December 6). L'effetto dazi, in Italia l'invasione dalla Cina: Deficit commerciale a 45 miliardi [Duties effect, in Italy the invasion from China: trade deficit at  45 billion]. Corriere della Sera. https://www.corriere.it/economia/finanza/25_dicembre_06/effetto-dazi-in-italia-l-invasione-dalla-cina-deficit-commerciale-a-45-miliardi-7eaac0a0-29d1-40d3-a9ca-accab9e73xlk.shtml. “Italian dependence is particularly high in furniture (26.9%), textiles (24.1%) and electrical appliances (21.7%). The combined effect is a stable increase in Chinese supercars, especially supercars, especially supercars, especially supercars, especially presence in the medium-low segments, but also an advance in the middle segment, Porsche (and the Pandina di Porsche (and the Pandina di Porsche (and the Pandina di Porsche (and the Pandina di where European companies struggle to compete on prices. The dynamics of the last two years, however, is not explained only by price competitiveness. The duties introduced by Washington have diverted part of the flows: what does not enter the United States seeks new outlets in Europe, where weak domestic demand and the absence of rapid defense tools make the market particularly vulnerable. The phenomenon is seen in Italy, but it concerns the entire Union.”

[72] Corriere della Sera. (2025, December 6). L'effetto dazi, in Italia l'invasione dalla Cina: Deficit commerciale a 45 miliardi [Duties effect, in Italy the invasion from China: trade deficit at  45 billion]. Corriere della Sera. https://www.corriere.it/economia/finanza/25_dicembre_06/effetto-dazi-in-italia-l-invasione-dalla-cina-deficit-commerciale-a-45-miliardi-7eaac0a0-29d1-40d3-a9ca-accab9e73xlk.shtml. “To complicate the picture there is a structural change in the Chinese industrial model. For years, many Italian companies have imported essential microcomponents from Beijing at low cost. Now, in several sectors, China has stopped selling only the single piece and directly offers the finished product, often at a price that is impossible for European manufacturers to match. When the supply of that component is interrupted or increased, the most fragile Smes go into crisis: some have been forced to close, others to downsize or redesign entire production lines. The transition to complete products made in China is therefore eroding market spaces that in the past were manned by Italian and European industries.”

[73] Corriere della Sera. (2025, December 6). L'effetto dazi, in Italia l'invasione dalla Cina: Deficit commerciale a 45 miliardi [Duties effect, in Italy the invasion from China: trade deficit at  45 billion]. Corriere della Sera. https://www.corriere.it/economia/finanza/25_dicembre_06/effetto-dazi-in-italia-l-invasione-dalla-cina-deficit-commerciale-a-45-miliardi-7eaac0a0-29d1-40d3-a9ca-accab9e73xlk.shtml. “An obvious case concerns electric cars, which arrived in Europe with very competitive prices also thanks to a regulatory framework that for years has facilitated imports without creating adequate barriers, except for the recent reversal of strategy, while at the same time the EU imposed strict rules on European manufacturers. In parallel, the explosion of Chinese e-commerce and low-cost platforms such as Temu and Shein has multiplied the arrival of packages worth less than 150 euros, so far free of duties. To curb the invasion, Europe has decided on a new taxation, but it will only come into force from 2028. Some states are considering bridging measures, but European decision-making slowness remains a critical knot.”

[74] ESM Magazine. (n.d.). Italian agri-food exports to US see notable value decline. ESM Magazine. https://www.esmmagazine.com/supply-chain/italian-agri-food-exports-to-us-report-significant-decline-296515. “The value of Italian agri-food exports to the United States has fallen by an estimated €600 million in the first seven months of 2025, compared to the same period last year. This sharp decline, according to an analysis by CIA-Agricoltori Italiani, based on ISTAT data, is attributed primarily to tariffs imposed by the Trump administration. After years of consistent growth, Italian agri-food shipments to the US have now fallen for two consecutive months.”

[75] ESM Magazine. (n.d.). Italian agri-food exports to US see notable value decline. ESM Magazine. https://www.esmmagazine.com/supply-chain/italian-agri-food-exports-to-us-report-significant-decline-296515. “The slowdown began in April, with modest 1% growth, followed by a minor 0.4% increase in May. However, the trend turned negative, with a 3% drop in June and a significant 10% plunge in July. Cumulatively, exports grew by only 3% in the January-July period of 2025, in stark contrast to the robust 19% annual increase observed during the same period in 2024. Key Italian food exports have been hit particularly hard, including wine – which alone accounts for over a third of agri-food exports to the US – as well as designation-of-origin cheeses, pasta, and tomato preserves. CIA-Agricoltori Italiani described the development as ‘worrying news’, underscoring how the tariffs have made Italian products less competitive in the crucial American market.”

[76] ESM Magazine. (n.d.). Italian agri-food exports to US see notable value decline. ESM Magazine. https://www.esmmagazine.com/supply-chain/italian-agri-food-exports-to-us-report-significant-decline-296515. “The impact is also evident in the trade balance. While the positive balance saw a modest 3% year-on-year increase in July 2025, this growth was not driven by a strong export performance, but, rather, by a greater contraction in imports than in exports. Despite these struggles in the US market, overall Italian food and beverage exports are still projected to see a 6% rise in the first half of 2025, following a record 9% increase in 2024 that generated over €58 billion.”

[77] ESM Magazine. (n.d.). Italian agri-food exports to US see notable value decline. ESM Magazine. https://www.esmmagazine.com/supply-chain/italian-agri-food-exports-to-us-report-significant-decline-296515. “For instance, the value of olive oil exports increased by 43% last year, while volumes only increased by 6%. A similar trend impacted coffee and chocolate in the first half of 2025, with price increases of 73% and 27%, respectively.”

[78] Vinetur. (2025, August 28). Italian wine and olive oil exports hit by new US tariffs as trade tensions escalate. Vinetur. https://www.vinetur.com/en/2025082890674/italian-wine-and-olive-oil-exports-hit-by-new-us-tariffs-as-trade-tensions-escalate.html. “Italian wine and olive oil producers are facing major financial losses after the United States imposed a 15% tariff on several key Italian food products. The new tariffs, which took effect on August 7, 2025, are part of a broader trade policy introduced by President Donald Trump’s administration. According to data from QuiFinanza, the sectors most affected include wine, extra virgin olive oil, and pasta. These products have long been considered symbols of Italian excellence abroad.”

[79] Vinetur. (2025, August 28). Italian wine and olive oil exports hit by new US tariffs as trade tensions escalate. Vinetur. https://www.vinetur.com/en/2025082890674/italian-wine-and-olive-oil-exports-hit-by-new-us-tariffs-as-trade-tensions-escalate.html. “The United States is the largest non-European market for Italian food exports. In 2024, exports to the U.S. reached nearly 8 billion euros. This strong commercial relationship has not only been important for Italy’s economy but has also served as a global showcase for its food products. Economic reports show that the wine sector is particularly vulnerable, with potential losses from tariffs estimated at 290 million euros. Extra virgin olive oil could see an additional burden of over 140 million euros, while pasta exports may face increased costs of almost 74 million euros. The first signs of trouble appeared in June 2025, when Italian agri-food exports to the U.S. dropped by 2.9%. This was the first negative result since September 2023. Earlier in the year, export growth had slowed from 11% in January to just 1.3% in April and 0.4% in May before turning negative in June.”

[80] Vinetur. (2025, August 28). Italian wine and olive oil exports hit by new US tariffs as trade tensions escalate. Vinetur. https://www.vinetur.com/en/2025082890674/italian-wine-and-olive-oil-exports-hit-by-new-us-tariffs-as-trade-tensions-escalate.html. “The impact of these tariffs is being felt across Italy, with some regions more exposed than others. For example, the province of Lucca exports about 700 million euros worth of goods to the United States each year, accounting for 8% of Tuscany’s total exports. Of this amount, 37% comes from the agri- food sector, making Lucca especially vulnerable to changes in U.S. trade policy. Italian products have faced similar challenges before. Parmigiano Reggiano cheese has been subject to a 15% tariff in the U.S. since 1964. Other sectors such as steel and aluminum have faced even higher tariffs, up to 50%. These longstanding barriers have forced Italian producers to adapt their strategies over time.”

[81] Dollar, D. (2023, May 23). Words and policies: “De-risking” and China policy. Brookings. https://www.brookings.edu/articles/words-and-policies-de-risking-and-china-policy/. “The Group of Seven (G-7) countries have recently agreed on a central part of their economic approach to China ,  “de-risking” ,  and, just as importantly, “de-risking, not decoupling.” This phrase originated with the European Union, so the agreement seems wide.”

[82] Dollar, D. (2023, May 23). Words and policies: “De-risking” and China policy. Brookings. https://www.brookings.edu/articles/words-and-policies-de-risking-and-china-policy/. “The second major uncertainty is what counts as a relevant risk. Even if you define de-risking as reducing rather than eliminating risk, the potential scope of de-risking and the degree of economic separation from China depends on what problems are treated as relevant risks. The most common risks the U.S. government invokes in discussing economic separations from China are risks to national security. As President Joe Biden recently put it at the G-7 summit, de-risking involves “protecting a narrow set of advanced technologies critical for our national security” ,  with the greatest focus on “technology that could tilt the military balance.” Protecting “national security” is probably the most important role of national government. It is also a broad and vague concept. The Commerce Department, for example, has explicitly embraced “national security” export controls on China regarding technologies that “improve the speed and accuracy of its military decision making, planning, and logistics.” This would include vast sectors of U.S. manufacturing and exports involving research and communication tools with predominantly civilian uses. In addition, presidents have historically overused their authority to protect “national security.” (President Donald Trump, for example, invoked “national security” under Section 232 of the Trade Expansion Act to impose preposterous tariffs on steel and aluminum imports from Canada.) A de-risking policy toward China shaped around broadly-framed risks to “national security” could become close to “de-coupling.” Beyond “national security,” many other problems involving China can be included in a de- risking policy ,  human rights, for example. The U.S. government has already authorized the use of economic tools such as export controls against China to address “a significant risk” regarding “activities that are contrary to the … [United States’] foreign policy interest of the protection of human rights.””

[83] Dollar, D. (2023, May 23). Words and policies: “De-risking” and China policy. Brookings. https://www.brookings.edu/articles/words-and-policies-de-risking-and-china-policy/. “De-risking is also certain to address a variety of economic risks China poses. The G-7 communiques focus especially on risks to “economic resilience and economic security.” De- risking includes taking whatever economic steps a country deems appropriate to diversify supply chains, reduce excessive dependency on Chinese supply chains, and resist economic coercion. Biden, in the course of personally embracing the “de-risking, not de-coupling” policy, broadened this list of economic risks and explicitly added “countering harmful practices that hurt our workers."”

[84] Dollar, D. (2023, May 23). Words and policies: “De-risking” and China policy. Brookings. https://www.brookings.edu/articles/words-and-policies-de-risking-and-china-policy/. “The third major uncertainty about de-risking is how a particular risk is evaluated and balanced against a country’s other national interests in deciding whether action should be taken against China and what that action should be. Most risks will require complex assessment before deciding whether and what steps of economic separation from China are taken. How likely or how harmful does a particular risk have to be? How do different countries’ decisionmakers strike the balance between some potential risk and what may be substantial benefits to civilians and to various manufacturers and investors? In addition, what economic tools will governments use to address the risks? Diversifying supply chains and export controls are certain. But restricting outbound investments remains a deeply controversial issue over which countries are divided ,  not only because of investors’ domestic political power, but also because restricting outbound investments to China would involve controversial decisions about which investors are covered by which countries and extremely complex investment reviews.”

III. The Great Encirclement

[85] O'Hanlon, M. E. (2020, November). After primacy: US military options in contemporary East Asia. Brookings. https://www.brookings.edu/articles/after-primacy-us-military-options-in-contemporary-east-asia/. “Implementing this strategy involves prepositioning a network of low-cost, attritable uncrewed systems on and around the Philippine and Japanese islands adjacent to Taiwan. This force would be composed of a diverse array of platforms, including long-range loitering munitions, medium uncrewed underwater vehicles, attack uncrewed surface vessels, and mobile air defense systems. These assets would be transported into position using self-propelled barges and uncrewed surface vessels. Upon activation based on indications and warnings of an imminent invasion, the TBAF would rapidly deploy to create a defensive bulwark in the waters and airspace around Taiwan. The TBAF is not capable of entirely preventing a PLA landing, but it can significantly disrupt and delay the invasion process, making it costly and difficult. TBAF units would operate as simple, single-function systems akin to mobile mines operating below, at, and above the water’s surface. Uncrewed underwater vehicles acting as low-speed torpedoes would target amphibious vessels below the waterline, while attack uncrewed surface vehicles place shape charges at ships’ waterlines. Teams of small uncrewed aerial vehicles could use coordinated tactics to attack sensors and operating stations on PLA vessels, confounding defensive systems across multiple vectors. Distributed air defense systems on uncrewed platforms would engage assault helicopters and transport aircraft. By preferentially engaging PLA forces, the TBAF allows U.S. general-purpose forces to operate from less contested areas, improving their survival rates and preserving options for protracted conflict if needed. This approach moderates the risk of direct U.S.-China conflict while imposing significant costs on the PLA. The TBAF’s narrow focus on defensive, short- range systems makes it less provocative than deploying general-purpose forces. Its relatively low cost, estimated at $6.5 billion for procurement and integration, makes it more sustainable than expanding general-purpose forces. While this asymmetric approach places some strain on regional allies hosting TBAF elements in their territorial waters, it is likely more palatable than direct U.S. military intervention. By raising the risks and costs for PLA planners, the TBAF could significantly enhance deterrence and dissuade Chinese leaders from pursuing invasion as a viable option for resolving the Taiwan issue.”

[86] O'Hanlon, M. E. (2020, November). After primacy: US military options in contemporary East Asia. Brookings. https://www.brookings.edu/articles/after-primacy-us-military-options-in-contemporary-east-asia/. “Strategy option: Distributed maritime harassment The U.S. military can implement a strategy designed to decrease any occupied features’ utility for the PRC by cluttering the surrounding waters and making China’s activities visible to the international community. The United States can achieve this by deploying a network of uncrewed underwater and surface drones with self-regenerating energy sources (e.g., saildrones and wavegliders) to persistently occupy and monitor the contested areas. The United States would then publish data from these assets and from tasked low Earth orbit (LEO) constellations. This strategy would be moderately costly to implement and maintain because it would require substantial reserves of uncrewed systems that the PRC should be expected to destroy and/or seize. It is, however, substantially lower in cost than deploying expeditionary power projection assets. It also minimizes the risk of conflict, creating presence without forward positioning U.S. servicemembers. Regional allies might be relatively supportive of an approach that doesn’t allow China’s transgressions to go unanswered but that also doesn’t considerably heighten the risk of war”

[87] O'Hanlon, M. E. (2020, November). After primacy: US military options in contemporary East Asia. Brookings. https://www.brookings.edu/articles/after-primacy-us-military-options-in-contemporary-east-asia/. “Timed with indications and warnings, the United States can deploy naval and air assets to the area. These forces would seek to prevent or slow Chinese occupation, and/or would push back PLA forces if they had successfully established a presence. This strategy would be an effort to maintain the status quo without escalating to general war. It would require policymakers to accept the likely loss of U.S. servicemembers and platforms and the risk of escalation to general war. Although Japan would be expected to engage in joint operations with the United States, other allies are not likely to offer direct support or participation. The strategy would consume considerable conventional capability and might not succeed in displacing the PRC short of war.”

[88] O'Hanlon, M. E. (2020, November). After primacy: US military options in contemporary East Asia. Brookings. https://www.brookings.edu/articles/after-primacy-us-military-options-in-contemporary-east-asia/. “The U.S. military can implement a strategy designed to decrease the utility to the PRC of any occupied features by cluttering the surrounding waters and making China’s activities visible to the international community. The United States can achieve this by deploying a network of uncrewed underwater and surface drones with self-regenerating energy sources (e.g., saildrones and wavegliders) to persistently occupy and monitor the contested areas. The United States would then publish data from these assets and from tasked LEO constellations.”

[89] O'Hanlon, M. E. (2020, November). After primacy: US military options in contemporary East Asia. Brookings. https://www.brookings.edu/articles/after-primacy-us-military-options-in-contemporary-east-asia/. “The United States will continue to rely upon the core elements of its expeditionary power projection capabilities for the foreseeable future: surface and undersea vessels, air transport and attack vehicles, and a large and well-trained cadre of servicemembers to operate and maintain them. The loss of regional U.S. military primacy does not imply a need to divest from all these assets. It does, however, create an imperative to develop strategies that do not conflate large platforms with deterrent effect, and that do not depend exclusively upon offensive lethality to threaten or to impose costs. Such strategies will inherently produce some rebalancing of DOD investments over time, though the cost difference between expeditionary power projection assets and asymmetric platforms means this will not require major reallocations within the 2025 Future Years Defense Program or infeasible near-term increases in the DOD budget. Early indications are that systems composed of technologies available today can be employed to produce highly effective asymmetric strategies. Recent wargaming demonstrated low-cost uncrewed platforms’ potential to operate as sensing networks, picket lines, and screening forces to create sea denial capability across even a relatively large area of responsibility (AOR). This force structure proved able to constrain a potential aggressor’s freedom of movement and limited adversarial targeting opportunities by keeping high-value crewed U.S. assets at a distance. Its other attributes include persistent presence, good survivability, and cost and personnel advantages over traditional expeditionary power-projection capabilities.”

[90] Dobbins, J., Cohen, R. S., Chandler, N., Frederick, B., Geist, E., DeLuca, P., Morgan, F. E., Shatz, H. J., & Williams, B. (2019). Extending Russia: Competing from advantageous ground (Report No. RR-3063-A). RAND Corporation. https://doi.org/10.7249/RR3063. “The mismatch between Russian leaders’ anxieties and the country’s actual vulnerabilities is perhaps Russia’s greatest weakness. Instead of devoting their attention to undertaking the economic and institutional reforms essential to maintaining Russia’s status as a major power in the long term, leaders continue to spend limited resources to counter the perceived threat from the United States and the West. By correctly identifying these anxieties and crafting initiatives that exploit them, it might be possible to develop effective strategies for extending Russia.” (p. 43)

[91] Dobbins, J., Cohen, R. S., Chandler, N., Frederick, B., Geist, E., DeLuca, P., Morgan, F. E., Shatz, H. J., & Williams, B. (2019). Extending Russia: Competing from advantageous ground (Report No. RR-3063-A). RAND Corporation. https://doi.org/10.7249/RR3063. “Russian leaders’ most obvious anxiety, particularly since the 2011– 2012 protests in Moscow, has been the fear of color revolutions both in the near abroad and within the borders of Russia itself. Leaders have responded to this perceived threat with everything from pro- paganda campaigns to armed force.” (p. 43)

[92] Dobbins, J., Cohen, R. S., Chandler, N., Frederick, B., Geist, E., DeLuca, P., Morgan, F. E., Shatz, H. J., & Williams, B. (2019). Extending Russia: Competing from advantageous ground (Report No. RR-3063-A). RAND Corporation. https://doi.org/10.7249/RR3063. “Russian leaders’ anxieties about their country losing its status as a major world power offer a more promising target for strategies to extend Russia. While concerns that Russia’s global standing could slip in the future are sensible given the country’s stagnation, the govern- ment’s attempts to shore up this standing often appear irrational.” (p. 44)

[93] Dobbins, J., Cohen, R. S., Chandler, N., Frederick, B., Geist, E., DeLuca, P., Morgan, F. E., Shatz, H. J., & Williams, B. (2019). Extending Russia: Competing from advantageous ground (Report No. RR-3063-A). RAND Corporation. https://doi.org/10.7249/RR3063. “While many Westerners consider the idea of a direct military attack on Russia as not credible in light of the country’s massive nuclear arsenal, the Kremlin’s military procurement demonstrates that its fear of such an assault is very real. Russia originally developed its formidable air defense systems, such as the S-400, to defend its own heartland from attack by a major military power, presumably the United States.” (p. 44)

[94] Dobbins, J., Cohen, R. S., Chandler, N., Frederick, B., Geist, E., DeLuca, P., Morgan, F. E., Shatz, H. J., & Williams, B. (2019). Extending Russia: Competing from advantageous ground (Report No. RR-3063-A). RAND Corporation. https://doi.org/10.7249/RR3063. “In terms of minimizing risks and maximizing benefits, actions to lower oil export revenues and the institution of new sanctions would likely extend Russia economically the most. Russia needs oil export revenues to maintain its government operations, including military activities abroad and the provision of social services and pensions at home. Limits to oil revenues would require Russia to make difficult choices, as it has had to do already. However, global oil prices and production are beyond the full control of a single country, so while the United States could institute policies to encourage those trends, it could not bring them about on its own. Deepening sanctions would also likely degrade the Russian economy and could do so to a greater extent and more quickly than maintaining low oil prices, provided the sanctions are comprehensive and multilateral. However, sanctions would also likely hurt ordinary Russians and cause domestic economic harm, however limited, to the United States (and to any European nations that might join). Further- more, sanctions would need to be coordinated multilaterally to be truly effective and to avoid alienating allies and partners. Therefore, their effectiveness would depend on the desire of other countries to extend Russia. That desire appears to be situation-specific, as illustrated by Germany. On the one hand, it exhibited leadership in instituting European sanctions against Russia.135 On the other hand, it exhibited lead- ership in the charge to build the Nord Stream 2 gas export pipeline, despite European opposition.” (p. 91-92)

[95] Dobbins, J., Cohen, R. S., Chandler, N., Frederick, B., Geist, E., DeLuca, P., Morgan, F. E., Shatz, H. J., & Williams, B. (2019). Extending Russia: Competing from advantageous ground (Report No. RR-3063-A). RAND Corporation. https://doi.org/10.7249/RR3063. “Increasing Europe’s ability to import gas from suppliers other than Russia is a longer-term and more expensive effort that could eco- nomically extend Russia. Europe is slowly moving in that direction, such as by building regasification plants for LNG. To truly be effective, this policy would need global LNG markets to be more flexible than they already are. As noted, although there is destination flexibility (in the sense that LNG ships can easily be rerouted), there is limited supply flexibility (in the sense that supplies cannot easily be increased over the short term). Efforts to build more liquefaction plants and create some kind of supply insurance that reduces economic risk of not being able to sell what is produced could help increase supply flexibility. In addi- tion, Europe might want to remain a consumer of Russian gas while building in other options. That would shift the balance of dependence toward Russia, giving Europe more leverage over Russian behavior.” (p. 92)

[96] Dobbins, J., Cohen, R. S., Chandler, N., Frederick, B., Geist, E., DeLuca, P., Morgan, F. E., Shatz, H. J., & Williams, B. (2019). Extending Russia: Competing from advantageous ground (Report No. RR-3063-A). RAND Corporation. https://doi.org/10.7249/RR3063. “association agreement with the EU.4 More than 100 protesters were killed over the next several months, and the Yanukovych regime col- lapsed in February 2014.5 Within days, Russian troops seized Crimea’s airport and other strategic locations in a largely bloodless invasion, and 96 percent of Crimean voters, many of whom are ethnic Russian,  voted in a referendum marred by accusations of fraud to secede from Ukraine and join Russia on March 16, 2014.6 In the Donbass region of Eastern Ukraine, a Russian-inspired intervention started similarly but did not go as smoothly. Armed separatists seized key buildings in the region in April 2014 and later held referendums, where the pop- ulations of Donetsk and Luhansk voted overwhelmingly (89 percent and 96 percent of those voting, respectively) for independence.7 This time, however, Ukraine fought back. Newly elected Ukrainian Presi- dent Petro Poroshenko ordered an “anti-terrorist operation” targeting the separatists that summer.8 By early 2017, some 60,000 Ukrainian soldiers were facing off against some 40,000 Russian-backed separatist forces, including an estimated 5,000 Russian soldiers, in a conflict that has so far cost some 10,000 people their lives.9 The United States and its European allies imposed economic sanctions on Russia and provided Ukraine with economic and non- lethal military assistance. In 2014, Congress authorized military and economic assistance under the Ukraine Freedom Support Act.” (p. 96-97)

[97] Dobbins, J., Cohen, R. S., Chandler, N., Frederick, B., Geist, E., DeLuca, P., Morgan, F. E., Shatz, H. J., & Williams, B. (2019). Extending Russia: Competing from advantageous ground (Report No. RR-3063-A). RAND Corporation. https://doi.org/10.7249/RR3063. “During the 2014 Wales Summit, NATO also agreed to aid Ukraine with command, control, communi- cations and computers, logistics, cyberdefense, military personnel, and medical support issues.13 The United States could increase its military assistance to Ukraine, in terms of both the quantity and quality of weapons. In a February 2, 2017, open letter to President Trump, Senator John McCain urged him “to provide defensive lethal assistance to Ukraine to defend its territory against further violations by Russia and its separat- ist proxies” in response to the uptick in violence in Eastern Ukraine.14 McCain’s statement echoed a February 2015 letter from Democratic Assistant Minority Leader Senator Dick Durbin and Ohio Republi- can Senator Rob Portman also calling for the United States to provide anti-tank missiles to Ukraine.15 In December 2017, the United States approved the sale of “defensive” lethal weapons to Ukraine, although it did not specify what weapons fell into the category.16 The United States could also become more vocal in its support for NATO membership for Ukraine. Some U.S. policymakers, including Republican Senator and 2016 presidential candidate Marco Rubio, backed this approach in the past and Ukrainian President Porosh- enko recently promised to hold a referendum on the issue in the near future.17 While NATO’s requirement for unanimity makes it unlikely that Ukraine could gain membership in the foreseeable future, Washing- ton’s pushing this possibility could boost Ukrainian resolve while lead- ing Russia to redouble its efforts to forestall such a development.” (p. 98)

[98] Dobbins, J., Cohen, R. S., Chandler, N., Frederick, B., Geist, E., DeLuca, P., Morgan, F. E., Shatz, H. J., & Williams, B. (2019). Extending Russia: Competing from advantageous ground (Report No. RR-3063-A). RAND Corporation. https://doi.org/10.7249/RR3063. “Expanding U.S. assistance to Ukraine, including lethal military assistance, would likely increase the costs to Russia, in both blood and treasure, of holding the Donbass region. More Russian aid to the separatists and an additional Russian troop presence would likely be required, leading to larger expenditures, equipment losses, and Rus- sian casualties. The latter could become quite controversial at home, as it did when the Soviets invaded Afghanistan. Two other somewhat more speculative benefits might flow from such an expanded U.S. commitment. Countries elsewhere that look to the United States for their security might be heartened. Some of those states might find new reasons to avoid developing their own nuclear weapons.” (p. 99)

[99] Dobbins, J., Cohen, R. S., Chandler, N., Frederick, B., Geist, E., DeLuca, P., Morgan, F. E., Shatz, H. J., & Williams, B. (2019). Extending Russia: Competing from advantageous ground (Report No. RR-3063-A). RAND Corporation. https://doi.org/10.7249/RR3063. “In the December 1994 Budapest Memorandum, the United States, the United Kingdom, and Russia provided the newly sovereign Ukraine with security “assurances” in exchange for Ukraine giving up its 4,000-warhead nuclear arsenal.18 Action by the United States to make good on these assurances could enhance the credibility of formal and informal security guarantees that the United States has provided other partners around the world, and could reduce their perceived need for their own nuclear deterrents. These benefits, however, would only accrue if the additional U.S. assistance actually allowed Ukraine to prevail in its conflict with Russia. Moreover, some scholars doubt whether doubling down on support for Ukraine would matter much regarding global nuclear nonproliferation based on the argument that countries’ decisions to develop nuclear weapons often are very localized and context-specific.” (p. 99-100)

[100] Dobbins, J., Cohen, R. S., Chandler, N., Frederick, B., Geist, E., DeLuca, P., Morgan, F. E., Shatz, H. J., & Williams, B. (2019). Extending Russia: Competing from advantageous ground (Report No. RR-3063-A). RAND Corporation. https://doi.org/10.7249/RR3063. “An increase in U.S. security assistance to Ukraine would likely lead to a commensurate increase in both Russian aid to the separatists and Russian military forces in Ukraine, thus sustaining the con- flict at a somewhat higher level of intensity. Lieutenant General Ben Hodges, the former commanding general of U.S. Army Europe, argued against giving Javelin anti-tank missiles to Ukraine for pre- cisely this reason. Alternatively, Russia might counter-escalate, committing more troops and pushing them deeper into Ukraine. Russia might even pre- empt U.S. action, escalating before any additional U.S. aid arrives. Such escalation might extend Russia; Eastern Ukraine is already a drain. Taking more of Ukraine might only increase the burden, albeit at the expense of the Ukrainian people. However, such a move might also come at a significant cost to Ukraine and to U.S. prestige and credibility. This could produce disproportionately large Ukrainian casualties, territorial losses, and refugee flows. It might even lead Ukraine into a disadvantageous peace.” (p. 100)

[101] Dobbins, J., Cohen, R. S., Chandler, N., Frederick, B., Geist, E., DeLuca, P., Morgan, F. E., Shatz, H. J., & Williams, B. (2019). Extending Russia: Competing from advantageous ground (Report No. RR-3063-A). RAND Corporation. https://doi.org/10.7249/RR3063. “Some analysts maintain that Russia lacks the resources to esca- late the conflict. Ivan Medynskyi of the Kyiv-based Institute for World Policy argued, “War is expensive. Falling oil prices, economic decline, sanctions, and a campaign in Syria (all of which are likely to continue in 2016) leave little room for another large-scale military maneuver by Russia.” According to this view, Russia simply cannot afford to maintain a proxy war in Ukraine, although, given Russia’s size and the importance it places on Ukraine, this might be an overly optimistic assumption.” (p. 100-101)

[102] Dobbins, J., Cohen, R. S., Chandler, N., Frederick, B., Geist, E., DeLuca, P., Morgan, F. E., Shatz, H. J., & Williams, B. (2019). Extending Russia: Competing from advantageous ground (Report No. RR-3063-A). RAND Corporation. https://doi.org/10.7249/RR3063. “ Eastern Ukraine is already a significant drain on Russian resources, exacerbated by the accompanying Western sanctions. Increasing U.S. military aid would certainly drive up the Russian costs, but doing so could also increase the loss of Ukrainian lives and territory or result in a disadvantageous peace settlement. This would generally be seen as a serious setback for U.S. policy.” (p. 103)

[103] Dobbins, J., Cohen, R. S., Chandler, N., Frederick, B., Geist, E., DeLuca, P., Morgan, F. E., Shatz, H. J., & Williams, B. (2019). Extending Russia: Competing from advantageous ground (Report No. RR-3063-A). RAND Corporation. https://doi.org/10.7249/RR3063. “The option of expanding U.S. military aid to Ukraine has to be evalu- ated principally on whether doing so could help end the conflict in the Donbass on acceptable terms rather than simply on costs it imposes on Moscow. Boosting U.S. aid as part of a broader diplomatic strategy to advance a settlement might well make sense, but calibrating the level of assistance to produce the desired effect while avoiding a damaging counter-escalation would be challenging.” (p. 103)

[104] Dobbins, J., Cohen, R. S., Chandler, N., Frederick, B., Geist, E., DeLuca, P., Morgan, F. E., Shatz, H. J., & Williams, B. (2019). Extending Russia: Competing from advantageous ground (Report No. RR-3063-A). RAND Corporation. https://doi.org/10.7249/RR3063. “Russia is part of two economic ventures related to Central Asia: the EEU and the Belt and Road Initiative. Russia has benefited from both, although in the case of the former, partners might have been harmed economically. There might be steps the United States and allies could take to reduce Russia’s benefits from both of these.” (p. 121)

[105] Dobbins, J., Cohen, R. S., Chandler, N., Frederick, B., Geist, E., DeLuca, P., Morgan, F. E., Shatz, H. J., & Williams, B. (2019). Extending Russia: Competing from advantageous ground (Report No. RR-3063-A). RAND Corporation. https://doi.org/10.7249/RR3063. “Reducing Russian influence in Central Asia would be very difficult and could prove costly, and Russia’s influence might be reduced there in the long term without this measure. China will continue to expand there through its Belt and Road Initiative, and Japan and India have also engaged with the region, all of which could reduce Russia’s dominance. The main reason for increasing U.S. engagement in the region would be to benefit the United States: gaining modest help in implementing U.S. foreign policy goals, creating new opportunities for U.S. businesses, and channeling China’s outward efforts in directions amenable to the United States. Without great cost, however, increased engagement would be unlikely to extend Russia much economically, and backlash would need to be guarded against.” (p. 130)

[106] Associated Press. (2022, May 6). US intelligence 'helped Ukraine locate and sink' Russian flagship in Black Sea. The Independent. https://www.independent.co.uk/news/world/americas/ukraine-russia-moskva-flagship-sank-us-b2072720.html. “The sinking of the Moskva, flagship of the Russian Black Sea fleet on 14 April, was considered a major victory for Ukraine as it sought to stave off the military might of Russia. Two cruise missiles sunk the vessel in an embarrassing blow to Moscow. At the time, Russia said the vessel had sank while being towed to port. Ukraine said its sinking came after it hit it with two missies. Russia said that at least one person was killed and several dozen sailors were missing. The ship was said to have had a crew of more than 500. Multiple reports in the US media said on Thursday that officials in Washington had revealed the United States had provided the intelligence to help Ukraine locate the warship.”

[107] Associated Press. (2022, May 6). US intelligence 'helped Ukraine locate and sink' Russian flagship in Black Sea. The Independent. https://www.independent.co.uk/news/world/americas/ukraine-russia-moskva-flagship-sank-us-b2072720.html. “The US identified it as the Moskva, officials said, and helped confirm its location, after which the Ukrainians targeted the ship. The US officials, who were not identified in the reports, claimed Washington had no advance warning that Ukraine was going to target the Moskva, and “was not involved in the decision to strike”. Regardless of the specific degree of involvement of the US intelligence community, the revelation could be of concern about Washington’s increasing role in the defence of Ukraine, an involvement something President Joe Biden has claimed he does not wish to escalate. It came a day after the New York Times reported that the US was helping Ukraine with intelligence that had allowed it to kill a number of Russian generals, a move that will be seen by some as another step in the proxy war between the Western and Nato nations helping Kyiv, and Russia. Ukrainian officials said they have killed approximately 12 generals on the front lines, a number that has astonished military analysts, the paper said. On Thursday, Pentagon press secretary John Kirby denied that the US was giving such specific information about top Russian officers.”

[108] Erickson, A. S., & Goldstein, L. J. (2009). Gunboats for China’s new “Grand Canals”? Probing the intersection of Beijing’s naval and oil security policies. Naval War College Review, 62(2), Article 6. https://digital-commons.usnwc.edu/nwc-review/vol62/iss2/6. “It is generally held that land-based oil pipelines can displace a portion of future oil import growth and will help diversify China’s oil import channels to some extent but that they cannot replace maritime oil transport.49 Available overland supplies from Russia, Kazakhstan, and other areas are insufficient to reduce China’s growing absolute and relative reliance on seaborne oil imports. Furthermore, off-loading seaborne crude in Burma or Pakistan seems problem- atic, given their great distances from China’s coastal economic centers.” (p. 52)

[109] Erickson, A. S., & Goldstein, L. J. (2009). Gunboats for China’s new “Grand Canals”? Probing the intersection of Beijing’s naval and oil security policies. Naval War College Review, 62(2), Article 6. https://digital-commons.usnwc.edu/nwc-review/vol62/iss2/6. “Chinese writers have dubbed the Strait of Hormuz the “Oil Strait” (石油海 峡), because China obtains approximately 40–45 percent of its oil imports from the Middle East, the vast majority of which must flow through Hormuz.53 Chi- nese scholars recognize the Middle East’s instability, noting that since 1951 ten of the sixteen major global oil supply disruptions have originated in the region.54 A recent PRC analysis notes that by 2020 China could be importing nearly four million barrels per day of oil from the Middle East (over twice the current aver- age level of 1.5 million barrels per day).55 Chinese experts note pointedly that “all oil that China imports from the Middle East and Africa has to go through the Straits of Hormuz and Malacca, but [these straits] are beyond the reach of the PLAN’s power. The “Western SLOC” (西行航线), running from the Indian Ocean through the Malacca Strait, to the South China Sea, and finally to the Chinese mainland, has particular strategic value as “China’s ‘lifeline’ of economic development.”57 It carries 80 percent of Chinese oil imports;58 that figure includes virtually all of China’s imports from the Middle East and Africa.59 Chinese researchers fear that Malacca, which “has become the strategic throat of China’s energy and eco- nomic security,” is “extremely narrow, easy to blockade.”60 “Whoever controls the Strait of Malacca,” therefore, “effectively grips China’s strategic energy pas- sage, and can threaten China’s energy security at any time” (p 52)

[110] Erickson, A. S., & Goldstein, L. J. (2009). Gunboats for China’s new “Grand Canals”? Probing the intersection of Beijing’s naval and oil security policies. Naval War College Review, 62(2), Article 6. https://digital-commons.usnwc.edu/nwc-review/vol62/iss2/6. “One PRC analysis asks whether the Malacca Strait will become yet another American forward military position in the Asia-Pacific.65 Another asserts that the United States poses a “grave, hidden threat” to China’s energy security.66 PRC scholars have noted that in 1992 the Seventh Fleet’s logistics agent, Com- mander, Logistics Group Western Pacific, was moved from Subic Bay in the Philippines to Singapore.67 The United States has no military base there, only access to facilities like Changi Naval Base, but, it is suggested, “the area can be placed under the control of U.S. military power.”68 China is uneasy with grow- ing U.S.-Singapore security cooperation and the notion that the United States appears to be cementing its regional strategic position under the guise of “com- bating terrorism.”” (p. 53)

[111] Erickson, A. S., & Goldstein, L. J. (2009). Gunboats for China’s new “Grand Canals”? Probing the intersection of Beijing’s naval and oil security policies. Naval War College Review, 62(2), Article 6. https://digital-commons.usnwc.edu/nwc-review/vol62/iss2/6. “ing to another Chinese observer, it is the fleets of the United States, Japan, and India that, together, “invariably constitute overwhelming pressure on China’s oil supply.”85 In appraising Japan’s newly evolving defense posture, Chinese researchers express concern that “Japan’s defense scope has extended to the Taiwan Strait and could include the Malacca Strait. [Also,] Japan has used Singapore’s air bases.”86 Other naval specialists have been critical of Japan’s de- ployment to Iraq, arguing that this initiative has more to do with the geopolitics of oil than with any humanitarian motives.” (p. 55)

[112] Erickson, A. S., & Goldstein, L. J. (2009). Gunboats for China’s new “Grand Canals”? Probing the intersection of Beijing’s naval and oil security policies. Naval War College Review, 62(2), Article 6. https://digital-commons.usnwc.edu/nwc-review/vol62/iss2/6. “China’s oil supply lines essentially means starting a war with China. . . . Only the U.S. has the power and the nerve to blockade China’s oil transport routes.” The same Chinese naval analysis suggests two possible scenarios wherein the United States might seek to embargo China’s oil supplies. The first would be a Taiwan contingency. The sec- ond is less clear: “If China’s rise is not of a peaceful character, or if the speed of the rise is too rapid . . . the U.S. could blockade China’s maritime oil transport lines, thereby cutting short China’s rise.” It is argued that, in addition to the Malacca Strait, American forces could block China’s energy SLOC at multiple points. This prospect is interpreted as a source of considerable leverage for the U.S. Navy vis-à-vis China.88 Another analysis arrives at similarly stark conclu- sions, stating that the 1993 Yinhe incident (frequently invoked by Chinese an- alysts) could foreshadow American interception of China-bound oil shipping during a Taiwan crisis.” (p. 56)

[113] Bo, H. (n.d.). No one lost the South China Sea (and no one will win). Center for Maritime Security Studies, Peking University. https://cmss.pku.edu.cn/info/1075/1401.htm. “China has frequently been accused for “aggressive assault on the freedom of the seas” by some Western media, but neither Western officials nor their experts can show any specific evidence. Actually, except for some pirate threats, there is no problem with the freedom of navigation in the South China Sea. The passing Merchant ship insurance premium keeps at a low and stable price, which shows the openness and freedom of the South China Sea. Despite rising encounter incidents of warships and aircrafts between China and other countries like the United States, up to now, there is no exact evidence that China has obstructed freedom of navigation. It should be pointed out that some of these incidents have nothing to do with freedom of navigation: they happened only because of U.S. provocative actions such like FONOPs, close reconnaissance and excessive wargames. Even when coping with the above mentioned aggressive operations, Chinese forces exercised restraint, which is sometimes praised as professional by the U.S. forces.”

[114] Bo, H. (n.d.). No one lost the South China Sea (and no one will win). Center for Maritime Security Studies, Peking University. https://cmss.pku.edu.cn/info/1075/1401.htm. “The foremost American problem is not that it has not done enough, but that it has done too much in the South China Sea. The U.S. officials and experts are always criticizing China's militarization in the South China Sea, but never mention the increasing radical actions of U.S. forces there. Every year, the U.S. military would carry out hundreds of military exercises and thousands of close reconnaissance missions in the South China Sea. Since May 2017, U.S. warships have entered twelve nautical miles of islands and reefs stationed by China more than ten times already, conducting a series of provocations like high-speed zigzag andelectronic jamming, which poses a huge threat to the sovereignty and security of China and Chinese people on these islands and reefs.”

[115] Bo, H. (n.d.). No one lost the South China Sea (and no one will win). Center for Maritime Security Studies, Peking University. https://cmss.pku.edu.cn/info/1075/1401.htm. “The second problem of the United States is its overly ambitious goal. Even now, the United States has not recognized the strategic significance of the changing balance of power in China's favor. As long as China maintains its current momentum, no matter what the United States does, China will form a relatively balanced strategic posture with the United States in the South China Sea. With the United States declining strength advantage vis-a-vis China, the United States should learn the value of compromise and how to accept China's legitimate interests; otherwise, the United States will fall into the abyss of endless troubles and anxiety.”

[116] Jamestown Foundation. (2025, October 31). The myth of the PRC’s overseas energy vulnerability. Jamestown Foundation. https://jamestown.org/program/the-myth-of-the-prcs-overseas-energy-vulnerability/. “Experts in the People’s Republic of China (PRC) argue that the country’s energy system is resilient enough to withstand major external disruptions, including conflict in the Persian Gulf, repudiating Western claims of PRC vulnerability to strategic chokepoints. Through supply route diversification via Russia, Central Asia, and Southeast Asia, potential blockades of the straits of Hormuz or Malacca now inflict less economic damage to the PRC’s energy supply. Global economic interdependence and the PRC’s growing domestic energy capacity further limit risk of disruption.” (p. 15)

[117] Jamestown Foundation. (2025, October 31). The myth of the PRC’s overseas energy vulnerability. Jamestown Foundation. https://jamestown.org/program/the-myth-of-the-prcs-overseas-energy-vulnerability/. “Chinese experts generally argue that a blockade of the Strait of Hormuz is unsustainable and unlikely to critically threaten the PRC’s energy security. For instance, prominent political scientist Zheng Yongnian ( 郑 永 年 ) recently pointed to the diversification of global oil sources. He emphasized that Iran’s economy is to a large extent reliant on oil exports, so the Strait of Hormuz will have to open eventually (Greater Bay Area Commentary, March 9). Similarly, Liu Zhongmin (刘中⺠), vice president of the Chinese Middle East Society, has observed that Iran’s blockade is limited and not intended to block the Strait of Hormuz, as Iran is “selectively allowing certain [Chinese] vessels to pass” (有选择地放⾏部 分 船 只 ) (Guancha, March 7). Adding to this perspective, Yan Yan ( 闫 岩 ), the director of the Research Center of Oceans Law and Policy at the National Institute for South China Sea Studies, a foreign ministry-affiliated think-tank, writes that Iran is not capable of maintaining a long- term blockade of the strait, which is why it has targeted vessels rather than closing the strait entirely (China Media Group, March 7).” (p. 16)

[118] Jamestown Foundation. (2025, October 31). The myth of the PRC’s overseas energy vulnerability. Jamestown Foundation. https://jamestown.org/program/the-myth-of-the-prcs-overseas-energy-vulnerability/. “Chinese elites emphasize that the PRC possesses a robust and flexible toolkit to manage any potential energy disruptions. Dong Xiucheng (董 秀 成 ), a professor at the University of International Business and Economics and director of the Belt and Road Energy Trade and Development Research Center, has written that despite heightened tensions in international energy markets caused by the Iran crisis, PRC statecraft has already established an “energy security system” ( 能 源 安 全 体 系 ) comprising strategic petroleum reserves, commercial reserves, domestic exploration, diversified imports, and the rapid growth of new energy (21st Century Economic Report, March 3). Moreover, even if Iranian oil imports were severed, these supplies account for less than 15 percent of the PRC’s total imports (FT Chinese, March 4).” (p. 16-17)

[119] Jamestown Foundation. (2025, October 31). The myth of the PRC’s overseas energy vulnerability. Jamestown Foundation. https://jamestown.org/program/the-myth-of-the-prcs-overseas-energy-vulnerability/. “Chinese experts argue that the Malacca Strait is no longer a critical vulnerability, as the existence of other global chokepoints and the PRC’s diversification of energy sources reduce its strategic significance. As far back as 2015, Wang Peng ( 王 鹏 ) of Tsinghua’s Institute of International Relations wrote that the Malacca dilemma is a “false proposition” ( 伪 命 题 ), arguing that the Persian Gulf and the Indian Ocean are dotted with U.S. naval and air bases, so the threat persists even without a blockade (Global Times, May 27, 2015). Similarly, Liang Yabin ( 梁 亚 滨 ), an associate professor of the Central Party School, noted in the same year that the Lombok, Sunda, and Miyako straits also would still pose threats, even if the PRC could break through the Malacca Strait (Pacific Journal, January 2015). Already by that time, other experts, such as deputy director of the Institute of Resource and Environmental Policy at the Development Research Center of the State Council Guo Jiaofeng ( 郭 焦 锋 ), calculated that the PRC had overcome the Malacca dilemma through domestic energy diversification efforts and the construction of new routes (21st Century Business Herald, July 5, 2016). Other experts widely emphasize that strong energy self- sufficiency, combined with diversified energy import routes, has greatly reduced the strategic importance of the Malacca Strait as a potential chokepoint. In 2023, Lu Ruqiang ( 陆 如 强 ), president of CNPC’s Economics and Technology Research Institute, saw no risk to Chinese energy security, assessing that the PRC could reach a self-sufficiency rate of 80 percent (People’s Daily, February 27, 2023). According to Tang Qifang (唐奇芳), senior fellow at the China Institute for International Studies, the PRC imports oil and gas from 55 different countries, and new import routes from Myanmar, Central Asia, and Russia have reduced dependence on maritime transport via the Malacca Strait (Global Times, July 30, 2024)” (p. 17)

[120] Jamestown Foundation. (2025, October 31). The myth of the PRC’s overseas energy vulnerability. Jamestown Foundation. https://jamestown.org/program/the-myth-of-the-prcs-overseas-energy-vulnerability/. “The PRC’s energy security is far more robust than is often portrayed in Western policy discourse. While U.S. strategists and some analysts continue to emphasize chokepoints such as the Strait of Hormuz and the Strait of Malacca as potential levers of leverage over Beijing, Chinese experts reject the notion that these waterways constitute critical vulnerabilities. Despite continued reliance on foreign oil, Chinese scholars and policy analysts have argued that the PRC has diversified its import sources, expanded domestic production, and built strategic reserves to the extent that Beijing can absorb even a prolonged disruption. Additionally, the PRC’s investments in renewable energy, new energy vehicles, and overland pipelines further reduce dependence on maritime chokepoints. Its bargaining power with resource-producing nations also helps to effectively mitigate external threats. In short, the so-called “Malacca dilemma” and Strait of Hormuz anxieties are largely overstated, reflecting a Western perception gap rather than actual vulnerabilities.” (p. 19)

[121] News Central Asia. (2025, December 23). China-Kyrgyzstan-Uzbekistan (CKU) Railway: A strategic connectivity project. News Central Asia. https://www.newscentralasia.net/2025/12/23/china-kyrgyzstan-uzbekistan-cku-railway-a-strategic-connectivity-project/. “The China-Kyrgyzstan-Uzbekistan (CKU) railway is a pivotal infrastructure project designed to boost trade and economic ties across Central Asia, connecting China directly with Kyrgyzstan and Uzbekistan. Initially proposed in the 1990s, it has gained significant traction as part of China’s Belt and Road Initiative (BRI), aiming to create alternative trade corridors. The project addresses long-standing connectivity gaps in the region, where Kyrgyzstan’s rail network is limited to about 424 km of disconnected lines, and promotes diversified transport options for landlocked countries. The route covers approximately 523 km of new track, starting in Kashgar, China’s Xinjiang Uyghur Autonomous Region, crossing into Kyrgyzstan via the Torugart Pass, traversing Kyrgyz territories including Makmal and Jalal-Abad, and ending in Andijan, Uzbekistan. Of this, 213 km lies in China, 260 km in Kyrgyzstan (including challenging mountainous sections with around 90 tunnels), and 50 km in Uzbekistan, where it integrates with existing networks for potential extensions westward. The line will initially be single-track and non- electrified, with plans for future upgrades.”

[122] News Central Asia. (2025, December 23). China-Kyrgyzstan-Uzbekistan (CKU) Railway: A strategic connectivity project. News Central Asia. https://www.newscentralasia.net/2025/12/23/china-kyrgyzstan-uzbekistan-cku-railway-a-strategic-connectivity-project/. “Financing for the CKU totals $4.7 billion, with China approving a $2.3 billion concessional loan on a 35-year term, while the remaining $2.3 billion comes from the joint venture’s authorized capital (51% from China, and the rest shared by Kyrgyzstan and Uzbekistan). The agreement was signed in Bishkek on December 16, 2025, by the China-Kyrgyzstan- Uzbekistan Railway Company and a consortium of Chinese banks, including the Export- Import Bank of China, marking financial closure ahead of the December 20 deadline. Construction officially launched with a ceremony in Jalal-Abad, Kyrgyzstan, in December 2024, though preparatory work began earlier, including tunnel construction in Kyrgyzstan started in May 2025. The project is expected to take four to six years, with completion targeted for 2029, though mountainous terrain and engineering challenges could extend this timeline.”

[123] News Central Asia. (2025, December 23). China-Kyrgyzstan-Uzbekistan (CKU) Railway: A strategic connectivity project. News Central Asia. https://www.newscentralasia.net/2025/12/23/china-kyrgyzstan-uzbekistan-cku-railway-a-strategic-connectivity-project/. “The CKU railway promises substantial economic and social gains by establishing a shorter east-west corridor, projected to handle 10-12 million tons of cargo annually, including minerals, agricultural goods, and manufactured items. It could shorten transit times to Europe by 7-8 days and reduce costs by up to 30%, boosting trade volumes between China and Central Asia by 20-30% over the next decade. During construction, it is anticipated to create up to 10,000 direct jobs in engineering, labor, and logistics, particularly in Kyrgyzstan and Uzbekistan, with ongoing employment in operations and maintenance post-completion. For Kyrgyzstan, the project could add 1-2% to annual GDP growth through transit fees, increased foreign investment, and local manufacturing development, while alleviating debt burdens and enhancing labor market revenues. Uzbekistan benefits from improved export access for cotton, metals, and energy resources, potentially increasing its trade surplus by $1-2 billion yearly and fostering industrial zones that attract $5-10 billion in investments. China gains diversified routes, reduced dependence on Russian transit, and stabilized western borders, while the region sees broader impacts like boosted tourism revenue and integration into global supply chains for sustainable growth.”

[124] News Central Asia. (2025, December 23). China-Kyrgyzstan-Uzbekistan (CKU) Railway: A strategic connectivity project. News Central Asia. https://www.newscentralasia.net/2025/12/23/china-kyrgyzstan-uzbekistan-cku-railway-a-strategic-connectivity-project/. “The CKU’s eastern terminus in Kashgar positions it as a key hub on the historic Silk Road, facilitating westward expansion from inland China. From Kashgar, established road and planned rail links extend southward to Pakistan’s ports of Karachi and Gwadar via the China-Pakistan Economic Corridor (CPEC). The primary road connection is the 1,300 km Karakoram Highway (KKH), an all-weather route from Kashgar through the Khunjerab Pass to northern Pakistan, linking to national highways that reach Karachi and Gwadar. Rail developments under CPEC include a proposed high-speed line from Kashgar to Gwadar or Karachi, part of a 3,000-3,218 km network of highways, railways, and pipelines, though full rail construction is ongoing. These could support up to 20 million tons of freight yearly once complete.”

[125] The Arctic Institute. (2023, November 14). China’s Polar Silk Road: Long game or failed strategy? The Arctic Institute. https://www.thearcticinstitute.org/china-polar-silk-road-long-game-failed-strategy/. “In February 2022, just days before Vladimir Putin launched his full-scale invasion of Ukraine, Xi Jinping and Putin met in Beijing, where they discussed among other things the development of the Polar Silk Road (PSR).1) The PSR was jointly announced in 2017.2) The Arctic was declared as a potential area of cooperation between the two countries, and the PSR was considered by some as the fulcrum of the Russo-Chinese cooperation. In March 2023, a year after the previous visit, Xi Jinping again visited Russia, marking China’s continued commitment as Russia’s partner – albeit not a partnership without limits”

[126] The Arctic Institute. (2023, November 14). China’s Polar Silk Road: Long game or failed strategy? The Arctic Institute. https://www.thearcticinstitute.org/china-polar-silk-road-long-game-failed-strategy/. “Despite these examples of the PSR developments slowing down, China has invested in projects in the Arctic under the umbrella of the PSR, the most important project being Yamal LNG. Here China National Petroleum Corporation (CNPC) and Chinese Silk Road Fund have a combined 30 percent stake. Two Chinese state enterprises, China National Offshore Oil Corporation (CNOOC) and China National Oil and Gas Exploration (CNOCD, a subsidiary of CNPC), also own 10 % each in Arctic LNG-2, the construction of which is currently underway.9) Chinese banks signed the total of EUR 12.5 billion in loans for the two projects, about 1.4 percent of the $932 billion of cumulative BRI engagement. Yet, Russia has been careful to not let the controlling stake slip out of their hands, and balanced Chinese loans with others, notably Japan. Unlike TotalEnergies or Shell, none of the Chinese stakeholders exited their Russian projects after Russia’s invasion of Ukraine (but the same is true of Japan’s Mitsui). While Yamal LNG and Arctic LNG 2 remain the largest Chinese energy investments in the Arctic, diversification of hydrocarbon supply is the cornerstone of Chinese energy security strategy. Over half of China’s natural gas comes from domestic production, and the 14th Five-Year Plan, released in March 2022, determined to increase domestic production further by 2025.10) In addition, customs data show that both Qatar and Russia increased LNG exports to China in 2022, and the December 2022 Sino-Saudi oil and energy deals is another case in point for diversification.”

[127] The Arctic Institute. (2023, November 14). China’s Polar Silk Road: Long game or failed strategy? The Arctic Institute. https://www.thearcticinstitute.org/china-polar-silk-road-long-game-failed-strategy/. “Another side of a potential longer-term strategy on China’s part can be found in how Chinese actors are preparing for transportation and shipping in ice-covered areas. Although several companies put orders for construction of ice class ships in recent years, COSCO possesses the largest fleet capable of operating the Arctic shipping routes, something which is influenced by both commercial and political considerations. With the increased threat of sanctions following Russia’s large-scale war against Ukraine, COSCO has all but suspended its operations on the Northern Sea Route, leaving room for new actors to enter this space. Following Putin-Xi summit in March, the newly established Hainan Yangpu NewNew Shipping Co., subsidiary of Torgmoll, launched a new container route connecting Saint- Petersburg and China via the Northern Sea Route.12) The company plans to deploy five vessels, connecting China with Russian ports of Kaliningrad, Saint Petersburg, and Arkhangelsk through the Northern Sea Route.13) This newfound purpose for the Northern Sea Route comes amid increasing trade between China and Russia,14) as shipping from China to Russia has faced serious problems due to rising demand and limited infrastructure.15) These efforts are supported by Chinese policies, such as Five-Year Plans, indicating a long- term approach for the design and development of PSV.16) Main efforts are at the moment concentrated in research and development of technologies necessary for polar shipping and mining, such as ice-enhanced LNG ships, icebreakers, and polar deep-sea exploration vessels. This also includes tracking and navigation technology, high-power polar ship propellers, polar amphibious unmanned vehicles, polar floating oil and gas drilling platforms and ships. While not all these technologies may prove to be viable, a commitment to R&D backed by policy documents and funding expands the decision-making options and demonstrates the continued pertinence of the PSR in the future.”

[128] O'Hanlon, M. E. (2020, November). After primacy: US military options in contemporary East Asia. Brookings. https://www.brookings.edu/articles/after-primacy-us-military-options-in-contemporary-east-asia/. “Consistent with the expeditionary power projection model, the DOD can deploy carrier strike groups and conduct forceful freedom of navigation operations while positioning air and naval assets to defend Taiwan. This course of action is expensive to maintain, absorbs considerable military capacity, puts U.S. servicemembers and assets at risk, and increases the probability of direct conflict. Concern about the outbreak of a U.S.-China war will strain regional U.S. alliances, and most should be expected to offer limited support and little to no direct participation. Expert analysis suggests that this strategy has a high risk of operational and strategic failure. Although responding forcibly might reassure other allies and partners of U.S. credibility, operational and strategic failure might degrade it. Strategy option: Counter-blockade The United States can use its military to apply a coalition-based blockade of PRC interests in other strategic locations, such as the Strait of Malacca or key Belt and Road Initiative ports. This approach constitutes a significant defense of Taiwan, albeit an asymmetric one, and relies upon U.S. power projection capabilities. It would therefore consume significant U.S. military capacity and would require the use of substantial political capital, and possibly the use of other forms of leverage, to generate and maintain collective action. Impeding the transit of PRC commercial ships would be costly for the global economy, most especially for China’s Belt and Road partners in the Global South. The risk to U.S. servicemembers and assets operating outside of East Asia is relatively low, the PRC’s military currently is optimized for regional actions, though the U.S. homeland must be assumed to be vulnerable to cyber retaliation. Imposing a counter-blockade, however, is inconsistent with the long-standing U.S. defense of freedom of navigation rights, and so this strategy should be assumed to have some effect on the U.S. reputation for upholding international law. There is no analytically sound way to assess the likelihood that the approach would succeed in convincing the PRC to abandon its own blockade. Strategy option: Distributed maritime guerilla network An alternative to using large power projection platforms to directly break the blockade is to deploy a network of low-signature, uncrewed vessels and submersibles throughout the region to persistently harass and disrupt PRC naval operations. This strategy would require preparatory investments in large quantities of these systems and the ability to maintain production and procurement, they will be vulnerable to Chinese kinetic and cyber interdiction and the strategy might need to be maintained for a long period of time. These platforms are cheap relative to investments in traditional power projection assets and to the Chinese blockade-capable ships that they would be deployed to harass, disrupt, and potentially damage. Uncrewed platforms also offer a means of moderating the risk of direct conflict by minimizing the likelihood of harm to U.S. servicemembers. U.S. regional allies might therefore be more willing to support this asymmetric approach than one that has the United States engage in direct military confrontation. There is no analytically sound way to assess the likelihood that this approach would deter rather than provoke a violent PRC response, or that it would succeed in convincing the PRC to abandon the blockade. Strategy option: Operation Vittles II Upon indications and warning, the United States can rapidly deploy resources to bolster Taiwan’s self-sufficiency, including emergency food and energy production capabilities. This approach focuses on mitigation and civilian resilience rather than on prevention or military reversal. As such, it absorbs very little conventional capacity, requires minimal advance preparation, and is a low-risk and short-duration operation. It also accepts the blockade as a fait accompli, however, and so very likely represents U.S. concession to forced unification. Although the strategy itself is likely to be supported by allies and partners, it also risks signaling that the United States is regionally risk-intolerant and might cause allies and partners to question U.S. intentions in the region.”

[129] O'Hanlon, M. E. (2020, November). After primacy: US military options in contemporary East Asia. Brookings. https://www.brookings.edu/articles/after-primacy-us-military-options-in-contemporary-east-asia/. “Strategy option: Increase U.S. military presence and activity Consistent with the expeditionary power projection model, the DOD can conduct frequent and forceful freedom of navigation operations, accelerate the cadence of joint exercises with allies, and flow additional presence into the region. This option is expensive to maintain, absorbs considerable military capacity, must be maintained indefinitely, increases the opportunity for dangerous encounters, and puts U.S. servicemembers and assets at risk. Increased operational tempo will strain regional U.S. alliances and will heighten concerns about the possibility of a direct U.S.-China conflict. This strategy has been employed by the United States in response to past PRC gray zone activities, which are ongoing. Strategy option: Counter-gray zone The United States can use its expeditionary power projection capabilities in coordination with allies and partners to implement a global, low-intensity campaign of harassment and disruption against Chinese interests. This strategy would absorb moderate to significant capacity, at moderate to significant cost to the DOD. It would negatively affect the global economy and would be particularly damaging to China’s larger trading partners. Executing a global gray zone campaign would require the expenditure of substantial U.S. political capital to generate and maintain risk tolerance, material contributions, and cohesion among allies and partners for an unknown duration. The strategy diverges from long-standing U.S. objections to the use of subthreshold tactics to bully and intimidate and would degrade norms around freedom of navigation and appropriate state behavior in the global commons. It is not possible to predict how this strategy would affect the risk of direct conflict with the PRC, nor to predict whether, and how, China would retaliate or relent. Strategy option: Anticipate and neutralize An alternative to expeditionary power projection strategies is for the United States to use autonomous systems and artificial intelligence-enabled monitoring and predictive analysis to coordinate rapid, targeted information campaigns to preemptively expose PRC activities and/or to position assets to impede or disrupt them. A military-led unit would combine AI-driven predictive analysis, indications and warning analysis, and strategic information dissemination to counter China’s gray zone tactics. It would use digital media to frame and amplify messaging about China’s bad behavior. This approach prioritizes information warfare and predictive operations over military coercion, and so has a low risk of direct conflict with the PRC. It absorbs little conventional capacity and has moderate costs, requiring the procurement, operation, and maintenance of sufficient uncrewed systems and support for data analysis resources and digital infrastructure for an unknown duration. The strategy would require U.S. access to overseas bases for system deployments, but its emphasis on information operations rather than on traditional military operations makes it likely to place minimal strain on U.S. alliance relationships. It is not possible to predict whether, or how, the PRC might retaliate, or whether it would persuade China to change its behavior.”

[130] O'Hanlon, M. E. (2020, November). After primacy: US military options in contemporary East Asia. Brookings. https://www.brookings.edu/articles/after-primacy-us-military-options-in-contemporary-east-asia/. “Strategy option: Full military intervention Timed with indications and warnings, the United States can use carrier strike groups, amphibious assault ships, extensive air force assets currently based in the first and second island chain, strike missiles from submarines, and even ground troops to try to repel PLA invasion forces, first in the Taiwan Strait, but potentially ashore also. This strategy relies entirely on U.S. capacity to surge forces into the region and to sustain high-intensity operations. It will result in the loss of U.S. servicemember lives and the destruction of military assets. It risks both sides’ homelands becoming legitimate military targets and nuclear escalation, and it might fail. U.S. allies are unlikely to support the U.S. war effort directly, and indirect support is likely to be limited.2 Strategy option: Taiwan Bulwark Activation Force (TBAF) Implementing this strategy involves prepositioning a network of low-cost, attritable uncrewed systems on and around the Philippine and Japanese islands adjacent to Taiwan. This force would be composed of a diverse array of platforms, including long-range loitering munitions, medium uncrewed underwater vehicles, attack uncrewed surface vessels, and mobile air defense systems. These assets would be transported into position using self-propelled barges and uncrewed surface vessels. Upon activation based on indications and warnings of an imminent invasion, the TBAF would rapidly deploy to create a defensive bulwark in the waters and airspace around Taiwan. The TBAF is not capable of entirely preventing a PLA landing, but it can significantly disrupt and delay the invasion process, making it costly and difficult. TBAF units would operate as simple, single-function systems akin to mobile mines operating below, at, and above the water’s surface. Uncrewed underwater vehicles acting as low-speed torpedoes would target amphibious vessels below the waterline, while attack uncrewed surface vehicles place shape charges at ships’ waterlines. Teams of small uncrewed aerial vehicles could use coordinated tactics to attack sensors and operating stations on PLA vessels, confounding defensive systems across multiple vectors. Distributed air defense systems on uncrewed platforms would engage assault helicopters and transport aircraft. By preferentially engaging PLA forces, the TBAF allows U.S. general-purpose forces to operate from less contested areas, improving their survival rates and preserving options for protracted conflict if needed. This approach moderates the risk of direct U.S.-China conflict while imposing significant costs on the PLA. The TBAF’s narrow focus on defensive, short- range systems makes it less provocative than deploying general-purpose forces. Its relatively low cost, estimated at $6.5 billion for procurement and integration, makes it more sustainable than expanding general-purpose forces. While this asymmetric approach places some strain on regional allies hosting TBAF elements in their territorial waters, it is likely more palatable than direct U.S. military intervention. By raising the risks and costs for PLA planners, the TBAF could significantly enhance deterrence and dissuade Chinese leaders from pursuing invasion as a viable option for resolving the Taiwan issue.”

[131] O'Hanlon, M. E. (2020, November). After primacy: US military options in contemporary East Asia. Brookings. https://www.brookings.edu/articles/after-primacy-us-military-options-in-contemporary-east-asia/. “The PRC escalates its claims over South China Sea islands and shoals by occupying features held by other claimants (e.g., the Philippines) and establishing

a permanent military presence.”

[132] O'Hanlon, M. E. (2020, November). After primacy: US military options in contemporary East Asia. Brookings. https://www.brookings.edu/articles/after-primacy-us-military-options-in-contemporary-east-asia/. “Diaoyu/Senkaku crisis

The PRC attempts to seize control of the Diaoyu/Senkaku Islands and declares a no-fly, no-sail zone around them.”

[133] O'Hanlon, M. E. (2020, November). After primacy: US military options in contemporary East Asia. Brookings. https://www.brookings.edu/articles/after-primacy-us-military-options-in-contemporary-east-asia/. “Control of regional sea lanes The PRC declares expansive “military exclusion zones” throughout the South China Sea and East China Sea, effectively controlling all major shipping lanes in the region.”

[134] O'Hanlon, M. E. (2020, November). After primacy: US military options in contemporary East Asia. Brookings. https://www.brookings.edu/articles/after-primacy-us-military-options-in-contemporary-east-asia/. “Cyberattack on the United States and Taiwan The PRC reacts to a U.S.-Taiwan interaction or other event to which it objects by launching a cyberattack that produces a significant disruption of public services in the United States and Taiwan.”

[135] O'Hanlon, M. E. (2020, November). After primacy: US military options in contemporary East Asia. Brookings. https://www.brookings.edu/articles/after-primacy-us-military-options-in-contemporary-east-asia/. “Surgical decapitation of Taiwan. The PRC executes a sudden, surgical operation to decapitate, paralyze, and then replace the government of Taiwan.”

[136] Brookings. (2025, October 9). Whole-of-society resilience: A new deterrence concept in Taipei. Brookings. https://www.brookings.edu/articles/whole-of-society-resilience-a-new-deterrence-concept-in-taipei/. “Taiwan President Lai Ching-te announced in June the establishment of a Whole-of-Society Defense Resilience Committee to better prepare the country to face natural and human-made disasters, including the threat of blockade or invasion by China. Taiwan is disaster-prone, it experiences approximately 18,649 earthquakes and three to four typhoons annually which regularly cause flooding and landslides. Taiwan’s infrastructure is built to withstand natural disasters due to some of the most stringent building codes in the world, but Lai determined that Taiwan’s society needs resilience on par with its buildings. Beijing’s military coercion and the threat of blockade, missile strikes, and invasion are the primary human-made challenges Taiwan must also contend with. Just as Taiwan faces increasing risk from climate change-driven natural disasters, the military threat from China is also growing.”

[137] Brookings. (2025, October 9). Whole-of-society resilience: A new deterrence concept in Taipei. Brookings. https://www.brookings.edu/articles/whole-of-society-resilience-a-new-deterrence-concept-in-taipei/. “The ministers of defense and interior are key members of the presidential-level committee, and their respective subordinates already play critical roles in national responses to a major disaster or military contingency, especially the Ministry of National Defense’s All-out Mobilization Department and the Ministry of the Interior’s fire and police agencies. However, these ministries and agencies do not have clear roles in the five pillars set out by the committee. Since the WOSR campaign is top-down, not bottom-up, these agencies will face challenges in committing resources to internal strategic planning efforts and determining how to integrate their efforts with society and the other agencies to avoid waste and inefficiencies. Interagency coordination is a challenge in any government, and Taiwan is no exception. Still, there are a few mechanisms to help departments break through stove pipes or share information. For example, the Ministry of Digital Affairs is developing an emergency communications network, but it is uncertain whether there is adequate coordination with the Taiwan Armed Forces and fire and police agencies to ensure that the wartime communications system meets their and civilian ministries’ requirements. Likewise, the Ministry of the Interior is building a system to train civilians as an alternative to the military reserve system, which is already struggling to adapt to changes in conscription terms as well as the overall challenge of a shrinking population.”

[138] Brookings. (2025, October 9). Whole-of-society resilience: A new deterrence concept in Taipei. Brookings. https://www.brookings.edu/articles/whole-of-society-resilience-a-new-deterrence-concept-in-taipei/. “The Whole-of-Society Defense Resilience Committee and the WOSR campaign comprise a rational approach to defense and deterrence and present an opportunity for the U.S. government and civil society to expand engagement. Societal resilience is an integral component of Taiwan’s national defense that contributes to deterring China’s use of force. It https://www.brookings.edu/articles/whole-of-society-resilience-a-new-deterrence-concept-in-taipei/ 4/18/26, 21:28 Page 5 of 8 is therefore advantageous for the United States to look beyond arms sales and military strategies to expand how Washington conceptualizes and bolsters Taiwan’s deterrence. The American Institute in Taiwan, the de-facto U.S. Embassy in Taipei, already sponsors and participates in NGO training sessions, but the WOSR campaign creates more opportunities to strengthen Taiwan’s resilience and the bilateral relationship. Expanded bilateral cooperation should not be limited to direct-counterpart ministries, since the government departments on either side do not always line up evenly in terms of roles and missions. While Taiwan has a Ministry of Interior, for example, its role and structure are different from the U.S. Department of Homeland Security (DHS). Therefore, U.S. government interlocutors should reach beyond counterpart dyads to expand cooperation to nontraditional partners, including local governments and the private sector. Working across agencies on the Taiwan side of a cooperation equation could help foster interagency coordination between Taiwanese organizations that lack a culture or history of engagement with one another.”

[139] Brookings. (2025, October 9). Whole-of-society resilience: A new deterrence concept in Taipei. Brookings. https://www.brookings.edu/articles/whole-of-society-resilience-a-new-deterrence-concept-in-taipei/. “The WOSR campaign will give the Taiwanese people hope and appreciation that they can stand up to threats. It is central to Taiwan’s continued ability to deter China from using force to compel unification and therefore complements Taiwan’s military defense spending. U.S. cooperation with Taiwan in the WOSR campaign amplifies the deterrence effect and builds the confidence of Taiwan’s citizens.”

[140] The Daily Star. (2024, May 19). Foreign fighters in Myanmar: Implications for the region. The Daily Star. https://online.thedailystar.net/opinion/views/news/foreign-fighters-myanmar-implications-the-region-3621146. “Al-Jazeera came out with a piece of news on May 17, titled "Western volunteers join the battle against Myanmar's military regime." The news otherwise heralds a new dimension to the three-year-old civil conflict in Myanmar. But more importantly, it sounds almost like a repetition of what happened earlier in Afghanistan, which also saw a flow of Western (and Eastern) volunteers before the United States intervened militarily, which, in the end, killed thousands of Afghans and devastated the country. However, following the military intervention, the US government spent $2.26 trillion, with the most significant portion, nearly $1 trillion, consumed by the Overseas Contingency Operations budget for the Department of Defense, mainly to benefit the country's military-industrial complex. Should the news then concern the countries in the region that something similar is in the offing in Myanmar, unless contained in its infancy? The question merits attention for two reasons. Firstly, the NUG/PDF, in its conflict against the Myanmar military or Tatmadaw, is overtly and covertly supported by the Western powers, including the US. Secondly, the Burma Act, declared by the US in April 2022, gave "discretionary authority" to the US president to interpret the act liberally, mainly when providing military aid to ethnic armed organisations (EAOs). Both reasons, in combination, probably encouraged Western volunteers to slip into Myanmar for adventure, dedication, and profit, albeit taking advantage of the US' concern for civil rights in Myanmar, notwithstanding its lopsidedness and naïveté.”

[141] The Daily Star. (2024, May 19). Foreign fighters in Myanmar: Implications for the region. The Daily Star. https://online.thedailystar.net/opinion/views/news/foreign-fighters-myanmar-implications-the-region-3621146. “However, contrary to the positions of the US and Myanmar, there is a commonality between Bangladesh, China and India: all aspire and thrive on stability. It is this commonality, particularly in the backdrop of civil conflicts in Myanmar and the US' declaration of the Burma Act, and now with foreign fighters in Myanmar, that creates space for reactivating the BCIM Forum for Regional Economic Cooperation, a 25-year-old entity initially called the Kunming Initiative. The BCIM Forum is indeed mandated to work on "economic cooperation," but how can states cooperate on economic issues without peace and stability in the region? The latter is a minimum condition for economic cooperation to thrive within and among states. Instability otherwise, if not contained, is bound to create greater instability, and often it becomes too late to stop the tragic consequences of such instability. There are ample examples in the world from which to take lessons. Bangladesh certainly would have an added interest in reactivating the BCIM Forum and reproducing stability, indeed, for the repatriation of the Rohingya and resolving the Rohingya crisis once and for all.”

[142] The Daily Star. (2024, May 19). Foreign fighters in Myanmar: Implications for the region. The Daily Star. https://online.thedailystar.net/opinion/views/news/foreign-fighters-myanmar-implications-the-region-3621146. “But time has changed. The conditions that fostered zero-sum competition and restricted Indo-China cooperation are no longer there. Geopolitical transformation, coupled with the fact that India's economy has gained momentum and is destined to emerge as a polar in the multipolar world, creates space for a renewed relationship between India and China. And there lies the merit of revisiting and reactivating the BCIM Forum. Given the crisis in Myanmar and how it is unfolding with speed and sophistication, the quicker the BCIM Forum is revisited and reactivated, the better the prospect of fostering stability in the region. Anything less will reproduce instability and create space for "Western volunteers" or foreign fighters, including local mercenaries, to meddle and thrive in Myanmar.”

[143] Agenzia Nova. (2023, August 13). Pakistan: The Balochistan Liberation Army attacks a convoy of Chinese engineers. Agenzia Nova. https://www.agenzianova.com/en/news/Pakistani-Balochistan-Liberation-Army-attacks-a-convoy-of-Chinese-engineers/. “Security forces in Pakistan have killed two gunmen who attacked a convoy of Chinese engineers en route to the coastal city of Gwadar in the southwestern province of Balochistan. The deputy superintendent of police of Gwadar, Chakar Baloch, told "Al Jazeera", confirming today's attack and adding that all members of the Chinese convoy and the security officials who escorted them were unharmed after the firefight . According to reports from the "Global Times", the convoy consisted of three SUVs and a van, all bulletproof, vehicles on which a total of 23 people of Chinese nationality were travelling. "The terrorists used light weapons and hand grenades," reads the military statement, adding that the security forces cordoned off the area and conducted a search for those responsible. The Balochistan Liberation Army (BLA), a Pakistani separatist armed group, claimed responsibility for the attack. In Gwadar, the construction of a new port is underway, the works of which are in the hands of Chinese companies. After the attack, the Chinese consulate general in the southern city of Karachi issued a security alert, urging people to be alert. Balochistan, bordering Iran and Afghanistan, is a province deemed strategically important due to its rich reserves of copper, zinc and natural gas. Cities in the province are a regular target of armed groups.”

[144] Boreyko, A. V., Vernigora, A. A., & Kislitsyn, S. V. (2022). The infrastructure competition between the United States and China in developing countries. Obshchestvennye Nauki i Sovremennost, (5), 527–535. https://doi.org/10.1134/S1019331622130159. “The United States, considering China as its main strategic competitor, is forced to respond to Chinese projects. However, their capabilities are currently lim- ited. The Biden administration has announced several international infrastructure initiatives in recent years, the prospects for which are still unclear. This article provides a brief comparative analysis of American and Chinese infrastructure projects.” (p. S627)

[145] Boreyko, A. V., Vernigora, A. A., & Kislitsyn, S. V. (2022). The infrastructure competition between the United States and China in developing countries. Obshchestvennye Nauki i Sovremennost, (5), 527–535. https://doi.org/10.1134/S1019331622130159. “Comparative analysis of American and Chinese infrastructure projects shows significant differences between the parties in terms of planning, implementa- tion, and initial capabilities. With a high degree of probability, the United States will not implement pro- grams to create transport infrastructure, seeking to duplicate existing or emerging Chinese projects. At the same time, in the context of the fourth industrial revolution and the development of the digi- tal economy, emphasis will be placed on the digital infrastructure. Differences in approaches to the cre- ation of such projects come down to the principles of their financing, management, and the number of part- ners involved. If the PRC acts unilaterally, the United States plans to cooperate actively with the G7 coun- tries. In addition, American partners are expected to raise significantly more funds than the United States. The US infrastructure strategy is reactionary and aimed at curbing Chinese initiatives. The reason is that Washington has become a hostage to the mechanisms of neoliberal globalization, which are becoming less effective in the current unfavorable conditions. At the same time, attempts by the United States to create projects like China’s are facing objective difficulties. One of them is Beijing’s qualitatively different strate- gic planning system, which enables it to implement more effectively multiyear comprehensive strategies for socioeconomic development, including in the field of global infrastructure. It can be assumed that, in the event of negative dynamics in the development of American projects, the United States will face the real threat of losing its status as the leader of the world-system, which will lead to intensification of the struggle for markets and resources of the periphery and will also cause a com- prehensive destabilization of international relations. If this option is developed, it is possible to predict a high probability of the militarization of the US– Chinese rivalry in various regions of the world, since militarily the United States remains much more pow- erful. This hypothesis is confirmed by the aggravation of a number of conflicts with indirect American par- ticipation: in Ukraine, Serbia, and Taiwan.” (p. S624)

[146] Liu, Z. (2021, October 25). Attempts by the US and India to sabotage CPEC doomed to fail. Shanghai Institutes for International Studies. https://www.siis.org.cn/Commentary/3936.jhtml. “As the flagship project under the framework of the China-proposed Belt and Road Initiative (BRI), the China-Pakistan Economic Corridor (CPEC) has become a main target of fierce slander by anti-China forces in the US, India and some other countries. Responding to the relentless attacks, a Pakistani official recently said that the US was "conniving in cahoots with India against the economic lifeline of Pakistan." The US and India continue to "make attempts to maneuver Pakistan out of" the BRI, Khalid Mansoor, a special advisor to Prime Minister Imran Khan of Pakistan on CPEC affairs, was quoted as saying in a report from local news outlet The Dawn on Sunday.”

[147] Liu, Z. (2021, October 25). Attempts by the US and India to sabotage CPEC doomed to fail. Shanghai Institutes for International Studies. https://www.siis.org.cn/Commentary/3936.jhtml. “Aside from the ill-intend propaganda, the US has been attempting to form its own version of infrastructure projects in order to rival the BRI, including the so- called Build Back Better World (B3W) plan under the G7 framework. Despite constant external slander and disruptions, the CPEC has been progressing smoothly as an important pilot project of the BRI. It has maintained a positive momentum in development, making concrete contributions to Pakistan's national development and regional connectivity since its launch in 2013. Behind each project are tangible benefits that have already been enjoyed by Pakistan, including stable power supply, the setup of industrial parks and improvement of infrastructures. Over the past eight years, the CPEC has brought a total of $25.4 billion of direct investment and created 75,000 local jobs, according to Chinese official data. Investments under the BRI have been serving as the main source of foreign investment for Pakistan. Such investments have not only boosted growth of the Pakistani economy, but also facilitated the improvement of Pakistan's business environment for global businesses. The first development phase of the corridor has been devoted to infrastructure construction and yielded fruitful results; now with the project entering its second development phase, cooperation is expected go deeper and wider, bringing about benefits to not only Pakistan and China, but also contribute to the stability and development of the region.”

[148] Norov, V. (2024, July 28). The ‘corridorizing’ of Asia: Cooperation, competition, and consequences. The Diplomat. https://thediplomat.com/2024/07/the-corridorizing-of-asia-cooperation-competition-and-consequences/. ““Corridor” has become a ubiquitous buzzword in governance and analyst circles. To fully assess the meaning of “corridors” it is appropriate to fashion an outline of a definition. While the corridor approaches deployed by China, the United States, and Russia are each very different, there are three interconnected components that form the base of this strategy.”

[149] Norov, V. (2024, July 28). The ‘corridorizing’ of Asia: Cooperation, competition, and consequences. The Diplomat. https://thediplomat.com/2024/07/the-corridorizing-of-asia-cooperation-competition-and-consequences/. “At the heart of this corridor approach is the shared belief and realization that an explicit link exists between transnational corridor building and the re-shaping of the international order. The first modern example of this concept is the China-led Belt and Road Initiative (BRI).”

[150] Norov, V. (2024, July 28). The ‘corridorizing’ of Asia: Cooperation, competition, and consequences. The Diplomat. https://thediplomat.com/2024/07/the-corridorizing-of-asia-cooperation-competition-and-consequences/. “Since its announcement in 2013 by Chinese President Xi Jinping in Kazakhstan, the BRI’s key venue has been Asia. Made up of six corridors, the largest and most developed corridor is the China-Pakistan Economic Corridor (CPEC).”

[151] Norov, V. (2024, July 28). The ‘corridorizing’ of Asia: Cooperation, competition, and consequences. The Diplomat. https://thediplomat.com/2024/07/the-corridorizing-of-asia-cooperation-competition-and-consequences/. “The United States and its partners have adjusted their foreign policy direction, too, putting more emphasis on connectivity projects. The major corridors announced by this group include the India-Middle East-Europe economic corridor with the U.S., EU, and India, as well as U.S. President Joe Biden’s “Partnership for Global Infrastructure and Investment (PGII)” that was first launched in 2021 and is seen as an answer to China’s BRI. The acceleration and the injection of additional funding for these projects illustrate a recognition that transnational corridors now play a big role in great power geopolitical strategy. The U.S. has also endorsed other transnational corridors that bypass Russia such as the Middle Corridor project, a multimodal land and sea transport route stretching from China through Central Asia and across the Caspian Sea through Azerbaijan and Georgia to the Black Sea.”

[152] Norov, V. (2024, July 28). The ‘corridorizing’ of Asia: Cooperation, competition, and consequences. The Diplomat. https://thediplomat.com/2024/07/the-corridorizing-of-asia-cooperation-competition-and-consequences/. “There are two key differences between the United States’ corridor approach and China’s. The U.S. flagship PGII, while widely recognized as a rival to the BRI, is a privately-led initiative with the “aim to bring together democratic nations to help developing nations upgrade their infrastructure, whereas the BRI is a state-driven initiative.” Therefore funding for the PGII is much lower compared to the BRI. Another major project by the West that is also considered a rival to the BRI is the EU Global Gateway Initiative. This initiative is an investment program launched in 2023 by the EU and European development finance institutions with the aim to to mobilize up to 300 billion euro in public and private investments from 2021 to 2027 in key sectors including transport. The Middle Corridor project is one of the key projects targeted by this fund as well as the EU- funded Regional Transport Program, to be adopted in 2025, where the EU will “offer technical assistance to advance existing and future transport related projects” in Central Asia. For the U.S. and its partners, the key aim of their corridor approach is to ensure that Western interests and influence are not compromised overseas. This means managing and keeping a check on the growing Chinese influence in the world economy.”

[153] Norov, V. (2024, July 28). The ‘corridorizing’ of Asia: Cooperation, competition, and consequences. The Diplomat. https://thediplomat.com/2024/07/the-corridorizing-of-asia-cooperation-competition-and-consequences/. “The first step in addressing these dynamics is to recognize how the West can use its model to extend and project its economic influence over Asia in a way that is authentic to them. Second, policymakers should explore where the West can structure new supply chains that enable companies in the Global South to access Western markets. The third and final step is to increase investment in infrastructure projects in Asia so the costs and benefits of transport can be maximized.”

[154] Raymond James. (2025, February 27). Yellen urges world leaders to 'unlock' frozen Russian Central Bank assets and send them to Ukraine. Raymond James. https://raymondjames.websol.barchart.com/?module=topNews&region=US&selected=news&storyID=24372090. “Treasury Secretary Janet Yellen on Tuesday offered her strongest public support yet for the idea of liquidating roughly $300 billion in frozen Russian Central Bank assets and using them for Ukraine's long-term reconstruction. “It is necessary and urgent for our coalition to find a way to unlock the value of these immobilized assets to support Ukraine’s continued resistance and long-term reconstruction,” Yellen said in remarks in Sao Paulo, Brazil, where Group of 20 finance ministers and central bank governors are meeting this week. “I believe there is a strong international law, economic, and moral case for moving forward. This would be a decisive response to Russia’s unprecedented threat to global stability," she said.”

[155] Raymond James. (2025, February 27). Yellen urges world leaders to 'unlock' frozen Russian Central Bank assets and send them to Ukraine. Raymond James. https://raymondjames.websol.barchart.com/?module=topNews&region=US&selected=news&storyID=24372090. “Using the assets to help Ukraine “would make clear that Russia cannot win by prolonging the war and would incentivize it to come to the table to negotiate a just peace with Ukraine,” Yellen said. The idea of using Russia’s frozen assets has gained traction lately as continued allied funding for Ukraine becomes more uncertain and the U.S. Congress is in a stalemate over providing more support. But there are tradeoffs since the weaponization of global finance could harm the U.S. dollar’s standing as the world’s dominant currency. Yellen said Tuesday that it is “extremely unlikely" that tapping the frozen funds would harm the dollar's standing in the global economy "especially given the uniqueness of the situation where Russia is brazenly violating international norms. Realistically there are not alternatives to the dollar, euro and yen,” Yellen said.”

[156] Raymond James. (2025, February 27). Yellen urges world leaders to 'unlock' frozen Russian Central Bank assets and send them to Ukraine. Raymond James. https://raymondjames.websol.barchart.com/?module=topNews&region=US&selected=news&storyID=24372090. “Bipartisan legislation circulating in Washington called the Rebuilding Economic Prosperity and Opportunity for Ukrainians Act would use assets confiscated from the Russian Central Bank and other sovereign assets for Ukraine. Leading lawmakers had tried to push it as a way to help provide Ukraine aid, but it has since not moved forward. Earlier this month, the European Union passed a law to set aside windfall profits generated from frozen Russian central bank assets. Yellen calls that “an action I fully endorse.””

[157] Haque, A. K. E. (2026, January 1). SWIFT weaponisation shattered the global financial trust. The Daily Star. https://www.thedailystar.net/news/swift-weaponisation-shattered-the-global-financial-trust-4087736. “The current crisis can be traced back to a series of pivotal decisions that prioritised immediate geopolitical pressure over long-term systemic stability. A primary catalyst was the disconnection of Russia from the SWIFT system in 2022. At the time, this was viewed as a necessary sanction, but it can be argued that it was a foundational mistake that “broke up the trust”. By preventing a major global actor from making payments in a “regular economic manner,” the international community effectively signalled that the global payment infrastructure was no longer a neutral utility, but a political weapon.”

[158] Haque, A. K. E. (2026, January 1). SWIFT weaponisation shattered the global financial trust. The Daily Star. https://www.thedailystar.net/news/swift-weaponisation-shattered-the-global-financial-trust-4087736. “The erosion of trust deepened with the recent proposals by European entities to confiscate Russian sovereign and federal assets. Although certain nations, such as Belgium, the host of the primary clearing house, resisted these requests to protect the integrity of their financial institutions (more importantly to avoid legal backlash from Russia!), the mere attempt has fundamentally weakened the global economic foundation. This raises a chilling question for the global market: if the property of a superpower can be targeted for confiscation, “who else is going to keep money in this world?”. This breach of trust has created a chilling effect, signalling to every nation, regardless of their size, that their assets are only as secure as their current political alignment with Western powers. This realisation is driving a massive relocation of global financial capital. We are now seeing the rise of new financial hubs in the UAE, Singapore, and Hong Kong. These locations are positioning themselves as the new centres of the financial world specifically because they promise to “keep the trust” that has been abandoned by traditional Western nations.”

[159] China Daily. (2025, December 25). MNCs drive expansion of China's CIPS. China Daily. https://ex.chinadaily.com.cn/exchange/partners/70/rss/channel/www/columns/y38633/stories/WS69a642bea310d6866eb3b485.html. “Growing demand from multinationals for diversified cross-border payment routes is driving further expansion of China's Cross-Border Interbank Payment System (CIPS) as foreign firms seek to reduce currency risks and improve liquidity management, bank executives and economists said. CIPS, the primary platform for cross-border yuan clearing and settlement, has expanded its participant base and service scope in recent years, supported by improved regulations and increasing cross-border renminbi usage. Analysts said the system's development reflects broader efforts to strengthen resilience in cross-border financial arrangements amid intensified geopolitical and economic uncertainties. By the end of 2025, CIPS had 193 direct and 1,573 indirect participants ,  spanning 124 countries and regions and up from just 19 and 176, respectively, at its launch a decade ago. The system provides cross-border services to over 5,000 banking institutions across 190 countries and regions, said CIPS Co Ltd, operator of the system.”

[160] China Daily. (2025, December 25). MNCs drive expansion of China's CIPS. China Daily. https://ex.chinadaily.com.cn/exchange/partners/70/rss/channel/www/columns/y38633/stories/WS69a642bea310d6866eb3b485.html. “While CIPS remains smaller than established global payment networks ,  with more than 11,500 institutions connected to the SWIFT messaging system ,  its fast expansion is seen as significant for a more balanced global financial architecture. "CIPS provides global enterprises with an independent, reliable and direct primary channel for cross-border RMB settlement, enhancing the resilience and stability of the global financial infrastructure," said Florence Tan, head of global transaction services at DBS China, one of the earliest direct participants in CIPS. Strong market fundamentals are expected to continue to drive CIPS, Tan said, adding, "Enterprises have a clear commercial reason to use RMB ,  to optimize treasury management, reduce foreign exchange conversion costs and mitigate uncertainty."”

[161] China Daily. (2025, December 25). MNCs drive expansion of China's CIPS. China Daily. https://ex.chinadaily.com.cn/exchange/partners/70/rss/channel/www/columns/y38633/stories/WS69a642bea310d6866eb3b485.html. “The rise of CIPS coincides with a firmer yuan, as doubts over the US Federal Reserve's independence further challenged the dollar's reliability. On Thursday, the offshore yuan rose above 6.83 against the greenback, a three-year high, before retreating to 6.88 on Monday.”

[162] China Daily. (2025, December 25). MNCs drive expansion of China's CIPS. China Daily. https://ex.chinadaily.com.cn/exchange/partners/70/rss/channel/www/columns/y38633/stories/WS69a642bea310d6866eb3b485.html. “Last year, CIPS' direct participants for the first time included foreign-invested institutions in Africa, the Middle East, Central Asia and the Singapore offshore RMB center, while it handled payment transactions of 180.2 trillion yuan ($26.4 trillion), compared with 175 trillion yuan in 2024. In 2026, Song said CIPS transactions are expected to expand steadily, and business types may extend from traditional trade settlement to financial market settlement, liquidity management and integrated cash management. Tan said the evolution of CIPS toward a broader cross-border financial infrastructure would help foreign firms manage onshore RMB assets more efficiently while offering Chinese companies a trusted offshore liquidity hub.”

[163] China Daily. (2025, December 25). MNCs drive expansion of China's CIPS. China Daily. https://ex.chinadaily.com.cn/exchange/partners/70/rss/channel/www/columns/y38633/stories/WS69a642bea310d6866eb3b485.html. “"CIPS is being positioned not only as an RMB payment channel, but as a platform capable of supporting more complex cross-border transactions involving multiple currencies," said Ju Jiandong, chair professor at Tsinghua University PBC School of Finance. The revised rules allow overseas CIPS direct participants to appoint any qualified direct participant ,  not necessarily an onshore bank ,  as their custodian, a change Ju said will significantly lower entry barriers for foreign lenders as a crucial step toward deeper integration into the global financial network. Also, to facilitate cross-border yuan use, the People's Bank of China, the country's central bank, rolled out measures on Thursday to better regulate cross-border interbank RMB financing activities and boost offshore RMB liquidity.”

[164] South China Morning Post. (2025, September 18). Hong Kong, UAE solidify financial links with deeper regulatory ties, digital assets focus. South China Morning Post. https://www.scmp.com/business/banking-finance/article/3344127/hong-kong-uae-solidify-financial-links-deeper-regulatory-ties-digital-assets-focus. “Deeper regulatory ties and a shared push for new growth sectors are expected to give fresh impetus to cross-border investment flows between China and the Middle East, according to industry players and a United Arab Emirates (UAE) regulator. Hong Kong would benefit from the increased China-Middle East cooperation as the city develops into “a key hub for Middle Eastern capital to deploy in Asia and an important gateway for Chinese capital to go global to the Middle East,” said Linda Cai, inbound and outbound leader and head of China corporate finance at PwC China.”

[165] South China Morning Post. (2025, September 18). Hong Kong, UAE solidify financial links with deeper regulatory ties, digital assets focus. South China Morning Post. https://www.scmp.com/business/banking-finance/article/3344127/hong-kong-uae-solidify-financial-links-deeper-regulatory-ties-digital-assets-focus. “One emerging area of cooperation is digital assets, where the two sides have advanced their joint digital currency initiatives. Last month, China introduced a new framework for its digital yuan, upgrading it from a cash equivalent to “digital deposit money” to help enable deeper links with the cross-border central bank digital currency pilot, Project mBridge. Transaction volume under Project mBridge, which makes settlements more direct and efficient between mainland China, Hong Kong, Thailand, the UAE and Saudi Arabia, surged over 2,500-fold from the early 2022 pilot levels to more than US$55 billion by November 2025, according to the US think tank Atlantic Council. Digital yuan, or e-CNY, accounted for over 95 per cent of the tally.”

[166] South China Morning Post. (2025, September 18). Hong Kong, UAE solidify financial links with deeper regulatory ties, digital assets focus. South China Morning Post. https://www.scmp.com/business/banking-finance/article/3344127/hong-kong-uae-solidify-financial-links-deeper-regulatory-ties-digital-assets-focus. “Combined with the mBridge project, China and the Middle Eastern countries would have formed a “multilevel financial cooperation framework of ‘currency-fund-digital assets’, laying a foundation for the mutual recognition of more cross-border products, such as exchange-traded funds and green bonds, in the future”, she said.”

[167] South China Morning Post. (2025, September 18). Hong Kong, UAE solidify financial links with deeper regulatory ties, digital assets focus. South China Morning Post. https://www.scmp.com/business/banking-finance/article/3344127/hong-kong-uae-solidify-financial-links-deeper-regulatory-ties-digital-assets-focus. “Investment ties between China and the Middle East have deepened steadily over the past two decades, gaining momentum from Beijing’s Belt and Road Initiative in 2013 and President Xi Jinping’s regional visit in 2016. The focus has since evolved beyond infrastructure projects to encompass hi-tech, digital and financial partnerships.In January, Undersecretary at the UAE Ministry of Finance Younis Haji Al Khoori said the country had issued more than 14,500 business licences to Chinese firms. Tech giants such as ByteDance and JD.com now operate in the country, reflecting heightened interest and a sharp rise from about 4,000 Chinese firms in 2021.”

[168] South China Morning Post. (2025, September 18). Hong Kong, UAE solidify financial links with deeper regulatory ties, digital assets focus. South China Morning Post. https://www.scmp.com/business/banking-finance/article/3344127/hong-kong-uae-solidify-financial-links-deeper-regulatory-ties-digital-assets-focus. “Chinese enterprises are expanding in the Middle East and moving beyond representative offices towards revenue-generation operations. A PwC survey published in September found that one in three Chinese companies earned at least 20 per cent of global revenue from the region, a 43 per cent increase from 2022.”

[169] Carey, W. (2026, January 18). China's mBridge CBDC and the reshaping of global cross-border finance. AInvest. https://www.ainvest.com/news/china-mbridge-cbdc-reshaping-global-cross-border-finance-2601. “he mBridge project represents more than a technical innovation-it is a geopolitical tool. By enabling direct cross-border settlements in local currencies, mBridge undermines the U.S. dollar's role as the default intermediary in global trade. For instance, the UAE Ministry of Finance executed a government transaction using the wholesale digital dirham on the platform, signaling its potential to replace SWIFT-based systems. Such use cases are particularly appealing to Global South nations, where correspondent banking has declined due to regulatory risks and high costs. China's broader strategy to internationalize the renminbi (RMB) is accelerating through mBridge. The e-CNY's integration into Belt and Road Initiative (BRI) trade corridors has already reduced reliance on Western-dominated financial infrastructure. Meanwhile, the U.S. remains an outlier: President Trump's 2025 executive order to halt work on a retail CBDC has left the U.S. without a digital counterpart to compete with the e-CNY. This vacuum has allowed non-$stablecoins and CBDCs to gain traction in emerging markets, where dollarization risks are increasingly seen as a vulnerability.”

[170] Carey, W. (2026, January 18). China's mBridge CBDC and the reshaping of global cross-border finance. AInvest. https://www.ainvest.com/news/china-mbridge-cbdc-reshaping-global-cross-border-finance-2601. “Despite mBridge's progress, the U.S. dollar remains the dominant reserve currency, accounting for 58% of global official foreign exchange reserves in 2024. The Federal Reserve's recent report underscores the dollar's resilience, citing its role in 50% of international payments and 88% of traded FX volumes. However, the IMF and World Bank have noted subtle shifts: central banks are diversifying reserves into nontraditional currencies like the RMB and gold, with China, Russia, and Turkey leading this trend. The Atlantic Council warns that a decline in dollar dominance could disrupt the U.S.'s "virtuous cycle" of economic and geopolitical power, increasing borrowing costs and limiting military spending. Yet, the dollar's entrenched role in Treasury markets and global trade invoicing- 96% in the Americas and 74% in the Asia-Pacific-ensures its near-term stability. The IMF's 2025 analysis acknowledges that while CBDCs like mBridge introduce new variables, the dollar's dominance is unlikely to wane soon due to the U.S. economy's size and the depth of its financial markets.”

[171] Carey, W. (2026, January 18). China's mBridge CBDC and the reshaping of global cross-border finance. AInvest. https://www.ainvest.com/news/china-mbridge-cbdc-reshaping-global-cross-border-finance-2601. “China's mBridge CBDC is not a silver bullet for de-dollarization but a strategic lever in a broader contest for global financial influence. While the U.S. dollar's dominance remains unshaken, the platform's technical efficiency, geopolitical alignment, and growing adoption in trade settlements signal a long-term shift. For investors, the key lies in balancing optimism about mBridge's potential with caution regarding the dollar's enduring resilience. As the BIS Innovation Hub transitions mBridge to full-scale implementation, the next phase will reveal whether this digital experiment can evolve into a systemic alternative-or remain a niche challenger in a dollar-centric world.”

IV. The Great Encirclement

[172] European Commission. (2026, March 4). Commission proposes Industrial Accelerator Act to strengthen industry and create jobs in Europe. https://employment-social-affairs.ec.europa.eu/news/commission-proposes-industrial-accelerator-act-strengthen-industry-and-create-jobs-europe-2026-03-04_en. “The European Commission has adopted a legislative proposal to increase demand for low- carbon, European-made technologies and products. The Industrial Accelerator Act (IAA) will boost manufacturing, grow businesses and create jobs in the EU, while supporting industry's adoption of cleaner, future-ready technologies. In line with the recommendations of the Draghi report, the IAA introduces targeted and proportionate ‘Made in EU' and / or low-carbon requirements for public procurement and public support schemes. These will apply to selected strategic sectors (while establishing a framework that can be extended, where appropriate, to other energy-intensive sectors such as chemicals) such as: steel cement aluminium cars net-zero technologies This will strengthen European production capacities and boost demand for European-made clean technologies and products. The Act includes a requirement for Member States to set up a single digital permitting process to speed up and simplify manufacturing projects.”

[173] European Commission. (2026, March 4). Commission proposes Industrial Accelerator Act to strengthen industry and create jobs in Europe. https://employment-social-affairs.ec.europa.eu/news/commission-proposes-industrial-accelerator-act-strengthen-industry-and-create-jobs-europe-2026-03-04_en. “While remaining open to foreign direct investment, the IAA establishes conditions for major investments in strategic sectors exceeding €100 million where a single third country controls more than 40% of global manufacturing capacity. Such investments must: create high-quality jobs drive innovation and growth generate real value in the EU through technology and knowledge transfer, as well as compliance with local content requirements They must also guarantee a 50% minimum level of European employment, ensuring businesses and citizens benefit alongside investors from access to the Single Market. In doing so, the IAA strengthens EU economic security and reinforces supply chain resilience.”

[174] Paul, Weiss, Rifkind, Wharton & Garrison LLP. (2026, March 4). EU Commission proposes Buy European, Invest European rules. Paul Weiss. https://www.paulweiss.com/insights/client-memos/eu-commission-proposes-buy-european-invest-european-rules. “The EU’s overarching objective remains “open strategic autonomy”. However, the proposed IAA will mandate EU-origin requirements in public procurement and public support schemes in specified strategic sectors in order to boost demand for EU products, driving growth in those EU manufacturing sectors. In certain sectors, it will exclude access to public procurement for economic operators from third countries where there is no international agreement guaranteeing access. It will also introduce new FDI controls on ex-EU investment from some countries into core sustainability sectors to ensure such investment grows the EU industrial base. Industrial manufacturing acceleration zones with preferential conditions are provided for, and industrial project permitting will be streamlined. The sectors targeted by the IAA are very focused in scope, only accounting for around 15% of EU manufacturing production (which in total only accounts for 14.3% of EU GDP). However, the implications and associated costs for businesses are likely to be more far reaching. The geopolitical drivers behind this legislation are significant and pressing (concerns over the “weaponisation” of trading dependencies are referred to twice within the first paragraphs of the explanatory memorandum), but many aspects are expected to be controversial both between the EU institutions and with Member States. Material changes to the Commission’s proposal cannot, therefore, be ruled out.”

[175] Paul, Weiss, Rifkind, Wharton & Garrison LLP. (2026, March 4). EU Commission proposes Buy European, Invest European rules. Paul Weiss. https://www.paulweiss.com/insights/client-memos/eu-commission-proposes-buy-european-invest-european-rules. “Blanket FDI conditions on foreign investment in focused sectors New pan-EU conditions on foreign investment are introduced, to apply in addition to existing Member State FDI regimes: The IAA regime will apply to investments (including greenfield investments) over EUR 100 million in battery technologies and the related supply chain, electric vehicles, solar photovoltaic technologies; and extraction, processing and recycling of critical raw materials, but only for investors from third countries with more than 40% of global manufacturing capacity in those sectors – commentators have noted that only China currently meets this threshold in the specified sectors. Investments which result in ownership of at least 30% of the shares voting rights of an EU target or of an EU asset will trigger a mandatory prior notification requirement. Clearance will be conditional on compliance with at least four of six preset conditions, including a 49% cap on foreign investor ownership, obligatory investment through a joint venture with EU partners (and a 49% shareholding cap), IP licensing arrangements (with pre-existing IP of EU targets”

[176] Paul, Weiss, Rifkind, Wharton & Garrison LLP. (2026, March 4). EU Commission proposes Buy European, Invest European rules. Paul Weiss. https://www.paulweiss.com/insights/client-memos/eu-commission-proposes-buy-european-invest-european-rules. “remaining exclusively owned by EU entities), at least 1% of gross annual revenue invested in R&D, at least 50% EU workforce and a strategy for enhancing EU supply chains and prioritising EU inputs with a target (not obligation) to have at least 30% EU-manufactured inputs. The requirement to have at least 50% EU workforce must be met in all cases. Exemptions are provided for investments which are (i) covered by a current or provisional economic partnership or free trade agreement, (ii) targeted at the provision of services or (iii) portfolio investments (defined as a purely financial investment with no intention to influence the management or control of the investee company). The Commission will have power on its own initiative where the investment could significantly impact value creation in the EU, or where the investment is over EUR 1 billion to decide on IAA FDI clearance directly, in place of the authority. It can also take over as decision-maker a case at the request of a Member State authority. The qualifier on these controls that the investor’s origin country has 40% of global manufacturing capacity, combined with the selection of sectors has – at least initially – created a tight focus for their impact. However, the Commission is given power to extend the affected sectors to certain net zero technologies, nuclear fuel technologies and electric propulsion technologies for transport without additional scrutiny by Member States (or the European Parliament). Not only is this likely to be contentious with Member States, but it also means there is a risk of broader impact of these provisions in the future. Notably, late revisions to the proposed IAA expressly exclude digital technologies, artificial intelligence, quantum technologies and semiconductors from the scope of the Commission’s power to extend the IAA FDI provisions. Similarly, the proposal that the Commission can supplant a Member State authority in some cases to take the decision on a notified investment is also likely to be controversial. Foreign investment controls are usually focused on national security, which is reserved to Member States. The Commission has framed the controls as a Single Market and trade measure to prevent fragmentation of approach between Member States but economic security is more usually seen as an extension of national security. Certain Member States are known to object to these FDI controls being included at all. The FDI approval regime will come into effect 12 months after the IAA is enacted.”

[177] Paul, Weiss, Rifkind, Wharton & Garrison LLP. (2026, March 4). EU Commission proposes Buy European, Invest European rules. Paul Weiss. https://www.paulweiss.com/insights/client-memos/eu-commission-proposes-buy-european-invest-european-rules. “Scope of the IAA FDI controls They will only apply to investments where the following cumulative conditions are met: foreign investments of above EUR 100 million (unless the investment is covered by a current or provisional economic partnership or free trade agreement, is targeted at the provision of services or is a portfolio investment (defined as a purely financial investment with no intention to influence the management or control of the investee company)). Greenfield investments are included in scope; and the investment is into any of the following sectors: Battery technologies and the related value chain for battery energy storage systems; Pure electric vehicles, off-vehicle charging hybrid electric vehicles and fuel-cell electric vehicles (including components related to electrification and digitalisation); Solar photovoltaic technologies; and Extraction, processing and recycling of critical raw materials; and he foreign investors is from a third country which accounts for more than 40% of global manufacturing capacity in the specified sectors.”

[178] Eurostat. (2025, October 9). EU imports €14.6 billion in green energy products. European Commission. https://ec.europa.eu/eurostat/web/products-eurostat-news/w/ddn-20251009-2. “In 2024, the EU imported €11.1 billion worth of solar panels, €2.9 billion of liquid biofuels, and €0.5 billion worth of wind turbines from extra-EU countries, totalling almost €14.6 billion in imports of green energy products. The value of imported solar panels decreased by 43% compared with 2023 due to a drop in prices, while the total weight of these imports increased by a modest 2%. Liquid biofuel imports also recorded a 25% drop in value. On the other hand, imports of wind turbines not only saw a 102% rise in value but also registered a 113% increase in the imported weight. For illustration, in 2024 the EU imported 32 373 wind turbines, 9 072 more than in 2023. When it comes to exports, in 2024, the EU exported €0.7 billion worth of solar panels, €1.8 billion in liquid biofuels, and €2.8 billion in wind turbines. Unlike solar panels and liquid biofuels, wind turbines exports significantly exceeded import values. Between 2023 and 2024, the export of wind turbines saw an increase in value (+41%) and in exported weight (+28%). When looking at the quantity, the EU exported 17 180 wind turbines in 2024, 7 434 more than in 2023. As for solar panels, exports decreased by 22% in value but increased 24% in weight. Exports of liquid biofuels decreased both in value (-18%) and in weight (-7%). China was by far the largest supplier of solar panels, accounting for 98% of all imports. Although the share remained the same as in 2023, the total value of these imports was down from €19.0 billion to €10.9 billion in 2024. For liquid biofuels, China also led but with a smaller share of 24% of all these imports, down from 36% in 2023. The top import partners of liquid biofuels also included Malaysia (15%), the United Kingdom (13%) and Brazil (12%). In 2024 imports of wind turbines were mostly from India and China. Compared with 2023, China increased its share from 31% to 43% while India saw a decrease from 58% to 48%”

[179] Bousso, R. (2025, July 31). EU energy policy trapped between US gas and Chinese green tech. Reuters. https://www.reuters.com/markets/commodities/eu-energy-policy-trapped-between-us-gas-chinese-green-tech-bousso-2025-07-31/. “The European Union's lavish pledge to buy $750 billion of U.S. energy by 2028 risks exacerbating the bloc's already outsized dependence on American gas, just as it finds itself increasingly reliant on Chinese technology to power its energy transition. The EU has committed to boost purchases of U.S. oil, natural gas and coal from around $75 billion in 2024 to $250 billion per year over the next three years under the new trade deal with Washington.  The U.S. already accounted for 50% of the EU’s liquefied natural gas imports in 2024, as well as 17% of oil imports and 35% of coal imports, according to Eurostat data.”

[180] Bousso, R. (2025, July 31). EU energy policy trapped between US gas and Chinese green tech. Reuters. https://www.reuters.com/markets/commodities/eu-energy-policy-trapped-between-us-gas-chinese-green-tech-bousso-2025-07-31/. “But the larger concern is that any increased purchases would accelerate Europe’s growing dependency on U.S. energy at a precarious moment.”

[181] Bousso, R. (2025, July 31). EU energy policy trapped between US gas and Chinese green tech. Reuters. https://www.reuters.com/markets/commodities/eu-energy-policy-trapped-between-us-gas-chinese-green-tech-bousso-2025-07-31/. “The energy crisis that followed Moscow's invasion of Ukraine taught Europe two painful lessons: don’t be heavily reliant on any single energy supplier, and true energy security means reducing reliance on fossil fuels, especially given the EU’s insufficient and dwindling domestic production. To address the latter concern, the bloc has accelerated investments in renewables, nuclear and battery storage technologies. European investment in clean energy is set to reach $494 billion in 2025, doubling from a decade ago, according to a recent report by the International Energy Agency. Renewables such as solar and wind generated half of the region's electricity and around 20% of total energy consumption last year.”

[182] Bousso, R. (2025, July 31). EU energy policy trapped between US gas and Chinese green tech. Reuters. https://www.reuters.com/markets/commodities/eu-energy-policy-trapped-between-us-gas-chinese-green-tech-bousso-2025-07-31/. “The rapid growth in renewables comes with its own dependency risks, however, as the green energy supply chain is dominated by Chinese technology. Solar power is the fastest source of Europe’s renewable energy growth, and China supplies around 80% of the EU's solar photovoltaic panels. And it does so at an extremely low cost, which has for years impeded Europe’s efforts to expand domestic manufacturing in this area. While Europe has a strong local wind turbine industry, which accounts for about 80% of its supply chain, and a robust battery manufacturing industry, China dominates the processing of critical raw materials, such as lithium, cobalt and nickel, essential for storage batteries as well as the production of rare earth magnets used in wind turbines.”

[183] UNCTAD. (2025, December 9). Global trade to hit record $35 trillion despite slowing momentum. United Nations Conference on Trade and Development. https://unctad.org/news/global-trade-hit-record-35-trillion-despite-slowing-momentum. “Global trade is on course to exceed $35 trillion in 2025 for the first time, according to UNCTAD’s final Global Trade Update of the year. The new data confirm that trade continued expanding through the second half of 2025, even as geopolitical tensions, higher costs and uneven global demand slowed momentum. Between July and September, global trade grew 2.5% compared with the previous three months. Goods rose nearly 2%, services 4%. Growth is expected to continue in the year’s final quarter, though at a slower pace: 0.5% for goods and 2% for services. If projections hold, goods would add about $1.5 trillion to this year’s total and services $750 billion, consistent with an overall 7% annual increase. A key shift is unfolding on prices. After two quarters in which trade values rose partly because goods became more expensive, prices are now expected to drop. As a result, the increase in global trade at the end of 2025 comes from higher volumes - the actual quantity of goods shipped - rather than from price increases. This points to stable demand even as inflation eases.”

[184] UNCTAD. (2025, December 9). Global trade to hit record $35 trillion despite slowing momentum. United Nations Conference on Trade and Development. https://unctad.org/news/global-trade-hit-record-35-trillion-despite-slowing-momentum. “East Asia recorded the strongest export growth over the past year (9%), supported by a 10% surge in intra-regional trade. Africa also performed strongly, with imports up 10% and exports 6%. South–South trade expanded around 8%, reflecting deepening economic ties among developing economies. Among individual economies, China and the Republic of Korea stood out in East Asia, while Brazil and South Africa were key drivers in South America and Africa. India and China also posted some of the strongest growth in services exports, underscoring the growing weight of emerging economies in global trade.”

[185] Xinhua. (2025, October 8). WTO raises 2025 global trade growth forecast to 2.4 pct. Xinhua. https://english.news.cn/20251008/7dbf3b7672764473a40a28be9ca575e3/c.html. “The World Trade Organization (WTO) on Tuesday raised its forecast for global merchandise trade growth in 2025 to 2.4 percent, up from its previous projection of 0.9 percent made in August. Meanwhile, the forecast for 2026 was revised downward to 0.5 percent from 1.8 percent. According to the WTO's latest Global Trade Outlook and Statistics report, global GDP is projected to grow by 2.7 percent in 2025 and 2.6 percent in 2026. The report said the volume of world merchandise trade, as measured by the average of exports and imports, expanded by 4.9 percent year-on-year in the first half of this year.”

[186] Xinhua. (2025, October 8). WTO raises 2025 global trade growth forecast to 2.4 pct. Xinhua. https://english.news.cn/20251008/7dbf3b7672764473a40a28be9ca575e3/c.html. “Trade among developing economies also saw a notable rise. The value of South-South trade climbed 8 percent year-on-year in the first half of 2025, outpacing the 6 percent growth in overall global trade value. AI-related goods, including semiconductors, servers, and telecommunications equipment, played a particularly significant role, accounting for nearly half of total trade growth during the same six-month period. The trade value of such products surged 20 percent year-on-year. At a press conference, WTO Director-General Ngozi Okonjo-Iweala said that despite the "stiff headwinds" from the U.S. unilateral actions and unprecedented rise in trade policy uncertainty, trade has shown resilience. She stressed that such resilience underscores that there is a core in the multilateral trading system that continues to work well.”

[187] Xinhua. (2025, October 8). WTO raises 2025 global trade growth forecast to 2.4 pct. Xinhua. https://english.news.cn/20251008/7dbf3b7672764473a40a28be9ca575e3/c.html. “According to the report, trade performance varies widely across regions. Asia and Africa are expected to record the fastest export growth in 2025, while Europe will likely see slower growth and North America will face declining exports. The report also noted that the growth of services exports, though indirectly affected by tariffs, is set to slow from 6.8 percent in 2024 to 4.6 percent in 2025, and further to 4.4 percent in 2026. Europe is projected to lead services export growth in 2025, followed by Asia, the Middle East, and the Commonwealth of Independent States (CIS), it added.”

[188] Reuters. (2025, October 3). U.S. crude exports rise to 15-year high on strong Asian demand, U.S. refinery maintenance. Reuters. https://www.reuters.com/business/energy/us-crude-exports-rise-15-year-high-strong-asian-demand-us-refinery-maintenance-2025-10-03/. “The spread between global benchmark Brent and U.S. West Texas Intermediate crude futures widened in August, when the bulk of the trades for September were executed, averaging minus $3.79, the widest in four months. A wider spread makes it more attractive to economically ship barrels across the Atlantic. Exports to South Korea climbed to 690,000 barrels per day in September, the highest on record. South Korea has agreed to purchase liquefied natural gas or other energy products from the U.S. to the value of $100 billion.”

[189] Reuters. (2025, October 3). U.S. crude exports rise to 15-year high on strong Asian demand, U.S. refinery maintenance. Reuters. https://www.reuters.com/business/energy/us-crude-exports-rise-15-year-high-strong-asian-demand-us-refinery-maintenance-2025-10-03/. “September was also marked by the first export of U.S. crude to Pakistan after a landmark trade deal. The country ordered a second shipment that sailed in September after finding its debut purchase commercially viable. Overall, shipments to the country totaled 1.9 billion barrels, or 62,000 bpd. Indian refiners also bought more cargoes of U.S. crude oil, drawn by the competitive prices, and pressure from the U.S. that on Indian imports to 50%, citing New Delhi’s buying of Russian oil.”

[190] Nikkei Chinese. (2026, February 2). 美国强行卖资源给全球南方 [U.S. pushes resource sales on Global South]. Nikkei Chinese. https://cn.nikkei.com/politicsaeconomy/commodity/61180-2026-02-02-05-00-26.html. “U.S. resources and grain are flowing into the south of the world (emerging and developing countries). The reason is that the Trump administration is "in return" to reduce tariffs, forcing the global South to expand the purchase of American products. The sea transportation volume of the United States to the south of the world increased by 20 pers than the previous year, making up for the decrease in exports to China. The U.S. Supreme Court is stil continuing to hear the lawsuit on whether tariffs are constitutional. If the Trump administration loses the lawsuit, chaos wil inevitably be inevitable, but the U.S. government is believed to seek to continue to impose tariffs on the basis of other unconstitutional laws. Analyzing the export volume of the United States to 20 major global southern countries such as Brazil, India and African countries, it wil be found that the total export volume of the United States in 2025 is about 223 milion tons, an increase of 17% over the previous year”

[191] Nikkei Chinese. (2026, February 2). 美国强行卖资源给全球南方 [U.S. pushes resource sales on Global South]. Nikkei Chinese. https://cn.nikkei.com/politicsaeconomy/commodity/61180-2026-02-02-05-00-26.html. “This figure exceeds the growth rate of U.S. exports to Japan (10%) and Europe (7%). Compared with Japan and the European Union, which have proposed a huge investment plan in the United States, the financial strength of the global south is weaker, and these countries have to rely on the limited chip of increasing the purchase of American products in the negotiations. It is fossil fuels that play a role in puling transactions. According to data from Kpler, a European research company, the U.S. crude oil exports to the world's south will increase by 58% in 2025, reaching about 36 million tons (an average of 760,000 barrels per day). Among them, exports to India increased by 40 per 0,000 to about 15 million tons.”

[192] Nikkei Chinese. (2026, February 2). 美国强行卖资源给全球南方 [U.S. pushes resource sales on Global South]. Nikkei Chinese. https://cn.nikkei.com/politicsaeconomy/commodity/61180-2026-02-02-05-00-26.html. “Over U.S. agricultural products, the Sino-US antagonism has led to changes in trade flows. In 2025, the export of U.S. agricultural products to China will decrease by 70% to about 32 million tons. The main influencing factor is that soybean trading, which accounts for 3 per cent of exports to China, almost stopped after May. It is the world's south that replaces China's purchase of American agricultural products. In 2025, the United States' grain exports to the world's south will increase by 30 per 0, reaching about 35 million tons. In 2025, Pakistan purchased about 1.23 million tons of American soybeans, 21 times the previous year, and Vietnam purchased about 1.7 million tons of American corn, 21 times higher than the previous year. Both countries promised to buy American agricultural products in tariff negotiations.”

V. The Irreversible Shift

[194] WTO Trade Policy Review (China's Integration Evidence) World Trade Organization. (2024). Trade policy review: Report by the Secretariat, China. The growth of trade in intermediate goods strongly outpaced the growth of merchandise trade in general, indicating China's further integration into international supply chains. However, the structural change it had previously embarked upon – away from industry and towards services – came to a halt. Over the past few decades, China's market-oriented reforms, economic liberalization, and integration into the global economy have led to strongly improved living standards, the emergence of a large middle class, and the eradication of extreme poverty. Per capita GDP increased from $10,144 in 2019 to $12,614 in 2023. However, China's strong growth has also been accompanied by high levels of income inequality and strong urban-rural wealth contrasts. (p. 9) [195] WTO Trade Policy Review (China's Integration Evidence) World Trade Organization. (2024). Trade policy review: Report by the Secretariat, China. Overall, the two notifications submitted to the WTO during the review period and the replies provided by China do not enable the Secretariat to have a clear picture of China's support programmes. For example, the notifications do not provide information on expenditure levels in sectors where government support is likely to have global repercussions, such as aluminium, electric vehicles, solar modules, glass, shipbuilding, semiconductors, or steel. Materials made available to the Secretariat for this Review provide only limited information beyond the two notifications on China's subsidies. (p. 69) [196] WTO Accession Protocol (The Rigged Game Evidence) World Trade Organization. (2001). Protocol on the accession of the People’s Republic of China. “The importing WTO Member may use a methodology that is not based on a strict comparison with domestic prices or costs in China if the producers under investigation cannot clearly show that market economy conditions prevail in the industry producing the like product with regard to manufacture, production and sale of that product. (b) In proceedings under Parts II, III and V of the SCM Agreement, when addressing subsidies described in Articles 14(a), 14(b), 14(c) and 14(d), relevant provisions of the SCM Agreement shall apply; however, if there are special difficulties in that application, the importing WTO Member may then use methodologies for identifying and measuring the subsidy benefit which take into account the possibility that prevailing terms and conditions in China may not always be available as appropriate benchmarks. In applying such methodologies, where practicable, the importing WTO Member should adjust such prevailing terms and conditions before considering the use of terms and conditions prevailing outside China. (c) The importing WTO Member shall notify methodologies used in accordance with subparagraph (a) to the Committee on Anti-Dumping Practices and shall notify methodologies used in accordance with subparagraph (b) to the Committee on Subsidies and Countervailing Measures. (d) Once China has established, under the national law of the importing WTO Member, that it is a market economy, the provisions of subparagraph (a) shall be terminated provided that the importing Member's national law contains market economy criteria as of the date of accession. In any event, the provisions of subparagraph (a)(ii) shall expire 15 years after the date of accession. In addition, should China establish, pursuant to the national law of the importing WTO Member, that market economy conditions prevail in a particular industry or sector, the non-market economy provisions of subparagraph (a) shall no longer apply to that industry or sector.” (p. 9) [197] WTO Accession Protocol (The Rigged Game Evidence) World Trade Organization. (2001). Protocol on the accession of the People’s Republic of China. “In cases where products of Chinese origin are being imported into the territory of any WTO Member in such increased quantities or under such conditions as to cause or threaten to cause market disruption to the domestic producers of like or directly competitive products, the WTO Member so affected may request consultations with China with a view to seeking a mutually satisfactory solution, including whether the affected WTO Member should pursue application of a measure under the Agreement on Safeguards. Any such request shall be notified immediately to the Committee on Safeguards. 2. If, in the course of these bilateral consultations, it is agreed that imports of Chinese origin are such a cause and that action is necessary, China shall take such action as to prevent or remedy the market disruption. Any such action shall be notified immediately to the Committee on Safeguards. 3. If consultations do not lead to an agreement between China and the WTO Member concerned within 60 days of the receipt of a request for consultations, the WTO Member affected shall be free, in respect of such products, to withdraw concessions or otherwise to limit imports only to the extent necessary to prevent or remedy such market disruption. Any such action shall be notified immediately to the Committee on Safeguards. 4. Market disruption shall exist whenever imports of an article, like or directly competitive with an article produced by the domestic industry, are increasing rapidly, either absolutely or relatively, so as to be a significant cause of material injury, or threat of material injury to the domestic industry. InWT/L/432

determining if market disruption exists, the affected WTO Member shall consider objective factors, including the volume of imports, the effect of imports on prices for like or directly competitive articles, and the effect of such imports on the domestic industry producing like or directly competitive products. 5. Prior to application of a measure pursuant to paragraph 3, the WTO Member taking such action shall provide reasonable public notice to all interested parties and provide adequate opportunity for importers, exporters and other interested parties to submit their views and evidence on the appropriateness of the proposed measure and whether it would be in the public interest. The WTO Member shall provide written notice of the decision to apply a measure, including the reasons for such measure and its scope and duration. 6. A WTO Member shall apply a measure pursuant to this Section only for such period of time as may be necessary to prevent or remedy the market disruption. If a measure is taken as a result of a relative increase in the level of imports, China has the right to suspend the application of substantially equivalent concessions or obligations under the GATT 1994 to the trade of the WTO Member applying the measure, if such measure remains in effect more than two years. However, if a measure is taken as a result of an absolute increase in imports, China has a right to suspend the application of substantially equivalent concessions or obligations under the GATT 1994 to the trade of the WTO Member applying the measure, if such measure remains in effect more than three years. Any such action by China shall be notified immediately to the Committee on Safeguards. 7. In critical circumstances, where delay would cause damage which it would be difficult to repair, the WTO Member so affected may take a provisional safeguard measure pursuant to a preliminary determination that imports have caused or threatened to cause market disruption. In this case, notification of the measures taken to the Committee on Safeguards and a request for bilateral consultations shall be effected immediately thereafter. The duration of the provisional measure shall not exceed 200 days during which the pertinent requirements of paragraphs 1, 2 and 5 shall be met. The duration of any provisional measure shall be counted toward the period provided for under paragraph 6. 8. If a WTO Member considers that an action taken under paragraphs 2, 3 or 7 causes or threatens to cause significant diversions of trade into its market, it may request consultations with China and/or the WTO Member concerned. Such consultations shall be held within 30 days after the request is notified to the Committee on Safeguards. If such consultations fail to lead to an agreement between China and the WTO Member or Members concerned within 60 days after the notification, the requesting WTO Member shall be free, in respect of such product, to withdraw concessions accorded to or otherwise limit imports from China, to the extent necessary to prevent or remedy such diversions. Such action shall be notified immediately to the Committee on Safeguards. 9. Application of this Section shall be terminated 12 years after the date of accession.” (p. 9-10) [198] Poletti, A. (2026). EU–US–China trade relations. In EU–US–China trade relations (Chapter 6, pp. 114–127). European Center for Populism Studies. The European Union (EU) is the world’s largest trading bloc – ranking first both as trader of manufactured goods and services and as destination and source of foreign direct investment (FDI) – and has traditionally been able to play a pivotal role in international trade relations. However, two major developments significantly affected the political environment shaping EU trade policymaking: the Chinese and American trade shocks. The surge in imports from China had systemic consequences for the domestic politics of trade in the EU, strengthening antitrade sentiment and the political power of far-right populist parties advocating policies of global market closure. More recently, the marked protectionist turn of the second Trump administration brought to an end a long-standing tradition of transatlantic collaboration in managing international trade relations. This chapter begins with a brief overview of the legal framework governing EU trade policymaking, the actors shaping the content of EU trade policy, and the historical evolution of the EU’s role as a global trade actor. Then, the chapter briefly analyses the China–US trade shocks and the transformations they brought about in EU trade policy. Finally, the chapter discusses possible ways forward for the EU to navigate an increasingly conflictual international trade environment. The final part of the chapter develops recommendations for the future of EU trade policy. The chapter suggests that the EU should be prepared to 1) credibly commit to retaliate in the face of a potential further escalation of the United States’ protectionist strategy, 2) strengthen its relations with other trade partners to diversify export markets, and 3) fully leverage its recently acquired ‘geoeconomic’ policy toolkit to defend its trade interests. (p. 116)