© REUTERS/Adriano Machado

Senator, how did American foreign politics change under President Donald Trump? One very significant change is this administration’s attitude toward China. There has been a generation-long, bipartisan tradition among American presidents of being tough on China while running for office, but not following through once elected. The president campaigned on China’s abuses with respect to trade and other issues, and he is governing accordingly. What might not be apparent to Europeans is just how much popular support this tough approach to China commands in America. When we aren’t in moments of crisis or fighting wars, foreign policy doesn’t generally dominate the American political discussion. But China is an exception. In my home state of Arkansas, people see the harmful effects that unfair Chinese competition has had on their neighbors and communities, and like all Americans they have a sense of justice and fair play that is offended by the abuses in Hong Kong, or in Xinjiang where the Chinese Communist Party has built concentration camps. So that genie is out of the bottle. It won’t be put back anytime soon, even if there’s a US-China trade deal.

There is an impression that the United States under Donald Trump is taking a step back from world politics while placing a stronger focus on domestic affairs. What is your view? I don’t accept this premise—and remember, Barack Obama campaigned and tried to govern on the notion that it was time to engage in nation building at home. His attempt to pull back from the world, and his largely rhetorical “pivot to Asia,” which wasn’t sufficiently backed up by military assets, contributed to the chaos beginning in 2014 and 2015, whether it was ISIS and the refugee crisis, China bullying its neighbors in the South and East China Seas, or Russia invading Crimea. America remains committed to NATO and committed to its allies in the Middle East and Asia-Pacific. The threats to NATO are China and Russia, as well as other NATO members that don’t take China and Russia seriously as adversaries.

What do you think of German Defense Minister Annegret Kramp-Karrenbauer’s suggestion of creating a safe zone in Syria? I’d welcome increased German involvement in northeast Syria. It is imperative that we coordinate to stamp out the last remnants of ISIS. As part of this process, we must ensure that ISIS detainees are returned home and detained. Additionally, we should cooperate to halt further Iranian expansion in the region and protect the Kurds from being overrun, even if they don’t receive an autonomous zone in northeast Syria.

The global order is changing. Right now, there are two main beneficiaries: China on the one hand, Russia on the other. Does the US accept this development and if not, how does it counteract it? Russia and especially China are very serious threats to countries like the United States and Germany. Analysts typically speak of Russia as an economically challenged and, literally, demographically dying nation, and China as the real threat for our future. There’s something to be said for that, but what we should keep in mind is that Xi Jinping and his cronies act as much out of desperation as does Russia’s leadership. As Xenophon taught ages ago, tyrants everywhere and always rest uneasily. Government without the consent of the people is an inherently fragile situation.
One thing we must keep in mind is that dictators like Putin and Xi want to split apart allies like the United States and Germany. The greatest threat to NATO today is the failure or refusal of some members to take seriously the malign intentions of these two men and their policies. Take Huawei, which some NATO members like Germany may allow in their 5G infrastructure, despite its track record of espionage for China. Or take Nord Stream 2, which is, frankly, an appalling and shameful project. While Germany touts the pipeline’s commercial benefits, Putin will use it as a strategic tool to split Eastern Europe from Central and Western Europe. It would effectively double the amount of natural gas Russia could export to Europe along a route that bypasses the alliance’s eastern frontier. This would enhance Russia’s ability to blackmail countries like Poland and the Baltic states by threatening their energy supplies, while deepening NATO members’ reliance on Russia to heat their homes and power their economies. Russia’s use of oil and gas exports to pressure Ukraine is a preview of how it could use Nord Stream 2 against NATO. And remember that when Putin invaded Crimea, he threatened to cut off European countries that assisted Ukraine. If NATO members increase their reliance on Russian gas, it will give the Kremlin more opportunities for blackmail and more leverage over the alliance.

Are you satisfied with the contribution of Germany and the European Union to the international security architecture? What do you expect the Europeans and especially Germany to do in terms of security and foreign policy? I appreciate Germany’s recommitment last month to increasing its defense budget to levels agreed upon by NATO leaders. Given the common threats we face, it’s urgent that all NATO members meet their defense spending commitments. NATO may struggle to remain a credible military force if all but seven NATO members refuse to spend sufficiently on their militaries. Additionally, I support European initiatives to streamline the defense acquisition process for our European allies. However, as these initiatives develop, it’s critical that they be designed in a manner that doesn’t duplicate NATO functions or impact NATO interoperability.

Germany has not ruled out incorporating Huawei in its 5G mobile networks. Would Huawei’s participation limit the intelligence sharing between Germany and the US? I’m deeply concerned about the German government’s proposal to include Huawei in the country’s 5G infrastructure. Huawei is an intelligence-gathering arm of the Chinese Communist Party. China’s neighbors in the Asia-Pacific region—Australia, Japan, and New Zealand—have already banned Huawei from their 5G networks. The United States has gone further by placing the company on our trading blacklist. Some NATO allies have also acted to counter the Huawei threat, including Poland and Estonia.
Huawei technology may be favored by the German business community because it is relatively inexpensive, but at what cost? Huawei networks present a risk to German security that can’t be mitigated. It could enable the CCP to spy on the German government and invade the privacy of German citizens. I’d urge the German government to look at more secure 5G providers such as European firms Nokia and Ericsson.
The adoption of Huawei technology by some allies could split NATO into Huawei and non-Huawei blocs, harming our ability to cooperate and thus helping our adversaries. Unfortunately, the presence of Huawei in allied nations’ networks will force the US government to review our intelligence-sharing procedures.

President Trump stated that the EU and Germany are among America’s “foes.” Do you agree with that, also considering the recent 30th anniversary of the fall of the Berlin wall? The United States, Germany, and the EU are never going to agree about everything, including trade, which is the context of the remarks you’re referring to. We’ll have disputes. Our relations will be better under some leaders than others. But important anniversaries like the fall of the Berlin Wall, and threats like China and Russia, remind us that we’re united by common interests much stronger than any supposed divisions.

Could it be already too late for the US to effectively limit China’s expansion in the world? The Chinese Communist Party poses a threat not just to the United States, but to the entire free world. China is run by a totalitarian regime that doesn’t tolerate dissent, at home or abroad. It’s easy to dismiss the Communist Party’s concentration camps in Xinjiang as a “far-off” problem. But the CCP’s malign activities are already at our doorsteps. Beijing is already using predatory economic tactics and censorship to steal from our companies and stifle our citizens’ ability to speak out against it.
Americans and Germans know the evils of totalitarianism, so we must mount a firm, unified response to these threats from Beijing. The US and Germany have many allies and friends, so I’m confident in our ability to confront this challenge.

How would you evaluate the current relationship between the United States and Russia? As I’ve long said about Vladimir Putin: once KGB, always KGB. I expect that the United States and Russia will remain adversaries as long as he remains in power. It would be good if we had a better bilateral relationship, but that may not occur anytime soon—particularly given Russia’s continued aggression against the NATO alliance, as well as its meddling in Ukraine, Syria, Venezuela, and elsewhere.

Do you fear any reoccurring Russian interference in the 2020 US presidential elections, and how do you plan on confronting the issue? I don’t fear anything to do with Vladimir Putin or his efforts to keep Russia relevant. His actions deserve a firm response, not fear. I sit on the Senate Select Committee on Intelligence, and Russia’s malign activities on this front are something we track closely, and for which the United States is well prepared. But it’s also important to remember that Russian interference was not a decisive factor in recent US elections. The American people decide their own future, and we’ll do everything in our power to ensure that remains true.

Former national security adviser of president Trump, H.R. McMaster, and economic advisor Gary Cohn stated in a 2017 op-ed that nations should prioritize their own interests over global alliances. Does this statement still resonate with you today? Alliances must be dedicated to some purpose—they are instruments to strategic ends, and so they are critical elements in any nation’s pursuit of its own interests. I look at the world today and I have no doubt about the purposes to which NATO, for example, remains dedicated.

In your view, what are the most important topics for the Munich Security Conference 2020 and what do you expect from it in order to be a successful conference? The most important topics for the 2020 Munich Security Conference are the nefarious intentions of our adversaries, Russia and China. Russia continues to bully, intimidate, and occupy its neighbors. Meanwhile, China seeks to build an international system antithetical to constitutional government, the rule of law, and market-based economics. Despite these threats, some allies continue to strike dangerous deals with China and Russia that risk betraying their safety and the safety of their allies. Conference attendees should discuss how we can prevent our transatlantic alliance from being infiltrated and divided by these hostile powers. How we respond to the threats posed by Nord Stream 2 and Huawei will be critical.

The post “Putin and Xi Want to Split Apart Allies” appeared first on Berlin Policy Journal - Blog.

© US Army/Sgt. Ryan Jenkins/Handout via REUTERS

In its most recent assessment of climate change impacts, the Intergovernmental Panel on Climate Change (IPCC) devoted a total 1,131 pages to warming’s effects on various ecosystems and human habitats, such as coastal systems, freshwater resources, and urban areas. But only 38 pages were specifically devoted to “human security,” and, within that section, only five pages were devoted to armed conflict and four to human migrations—arguably the most meaningful consequence of climate change for humans. The impression given is that human and international security are secondary when compared to ecological and resource concerns. In the documents on climate change issued by the US Department of Defense, however, the ranking of priorities is exactly reversed: the societal and security consequences of warming rank highest, while ecological considerations receive far less attention.

Both the Department of Defense and the IPCC view climate change as a significant peril, encompassing a wide range of phenomena—rising seas, more frequent and intense storms, prolonged droughts and heatwaves, recurring wildfires—considered threatening to natural and man-made habitats. Yet the Pentagon highlights the perils to human societies. “Climate change,” it told Congress in 2015, is “contributing to increased natural disasters, refugee flows, and conflicts over basic resources such as food and water.” And while the earliest victims of these pressures are likely to be “fragile and conflict-affected states” in the developing world, ultimately “even resilient, well-developed countries are subject to the effects of climate change in significant and consequential ways.”

The impression one obtains in Washington today, however, is that all federal agencies, including the Pentagon, are expected to refrain from discussing climate change. Soon after assuming office in 2017, President Donald Trump rescinded Executive Order 13653, “Preparing the United States for the Impacts of Climate Change,” a measure signed by President Barack Obama in November 2013. That directive had enjoined every government agency to identify its vulnerabilities to global warming and to undertake whatever steps were deemed necessary to overcome any perils so identified; it also called on all federal agencies to help reduce the severity of global warming by reducing their own carbon emissions. In accordance with Obama’s order, the Department of Defense had undertaken substantial efforts to reduce its exposure to warming’s effects and reduce its emissions. All this, however, was supposed to come to a halt after Trump rescinded the Obama measure and commenced a campaign to expunge “climate change” from the formal government lexicon. Nonetheless, the Pentagon has largely persisted with its drive to prepare for climate change, even if it has generally refrained from employing that term in public.

A “Threat Multiplier”

Most senior officers have come to view climate change as gathering momentum and posing a significant threat to American national security. Many of them have served extended tours of duty in Asia, Africa, and the Middle East and so have witnessed first-hand the harsh impacts of warming on vulnerable populations in resource-deprived areas. They have also been called upon—in some cases repeatedly—to provide humanitarian assistance to storm-ravaged areas both at home and abroad. And they know that their own bases, in the United States and elsewhere, are highly vulnerable to severe flooding, rising sea levels, recurring wildfires, and other consequences of climate change.

When not directly engaged in combat, American military officers, like those elsewhere, devote much of their time preparing for the next war or wars. This means, of course, extensive training and weapons procurement, along with systematic examination of the arms and tactics of likely adversaries. But it also entails assessing the terrain and environmental conditions in the areas where American forces may be obliged to fight. This has meant intensive study of potential battlefields in Asia, Africa, and the Middle East—and increasingly in the Arctic region. This, in turn, has led to research on changing climatic conditions in those areas and how these changes are affecting the stability and political composition of local societies.

This process began in 2006, when the CNA Corporation, a Pentagon-funded think tank once known as the Center for Naval Analyses, convened an advisory board of retired officers and tasked it with assessing the impact of climate change on American national security. A year later, the group released a summary of its findings, National Security and the Threat of Climate Change, which was widely circulated in Pentagon circles and had a huge impact on US military thinking. For the first time, climate change was identified as a significant threat to American national security.

One of the reasons it proved so influential was its new concept of “threat multiplier.” Even when not a direct cause of conflict and chaos, climate change could prove the one decisive factor that pushes fragile societies to the brink of internal conflict and state collapse. This notion has remained the cornerstone of US military thinking on climate change ever since. More than anything, it identifies societal cohesion and government competence as key factors in determining the cumulative impact of climate change on exposed populations: the more fragmented and corruption-ridden a polity, the greater the likelihood it will succumb to warming’s harsh consequences, producing internecine warfare, humanitarian disaster, and mass migrations. The resulting chaos will, in turn, result in multiple challenges for the US military, whether in the form of frequent humanitarian aid missions or military interventions or both.

Climate Change and the Syrian War

By 2010, this concept had acquired widespread acceptance within the senior military leadership and was incorporated into that year’s Quadrennial Defense Review Report (QDR). “Assessments by the intelligence community indicate that climate change could have significant geopolitical impacts around the world, contributing to poverty, environmental degradation, and the further weakening of fragile governments,” it stated.

The QDR identified geopolitical impacts, mass migrations, and state collapse as among the principal outcomes of climate change—topics that receive relatively scant attention in the various IPCC reports. Admittedly, the Pentagon views the climate problem through the lens of national security and so will tend to emphasize factors that bear on those concerns. At the same time, US military officers are vitally concerned about the real-world consequences of climate change, especially those that are likely to result in large-scale human death, displacement, and suffering.

By the middle of the decade, as the war in Syria gained momentum and spurred massive waves of migration to Europe, many in the US military and intelligence community saw climate change as a major precipitating factor. A prolonged drought in 2007-2010 decimated Syrian agriculture and drove many thousands of impoverished farmers into crowded cities, where they received scant assistance from the Assad regime—and, it is thought, helped fuel the anti-government protests that erupted in 2011.

More recently, officials at the US Africa Command (Africom), have identified persistent drought in the Sahel region of North Africa as a source of intensified tribal and terrorist violence there. “Changing weather patterns, rising temperatures, and dramatic shifts in rainfall contribute to drought, famine, migration, and resource competition [in the Sahel],” General Thomas D. Waldhauser, Africom’s commander, told the Senate Armed Services Committee in February 2019.

US Bases at Risk

American officers see that there is a limit to how many humanitarian and stability operations they can undertake at any one time, while also preparing for high-intensity conflict with “great-power competitors,” such as China and Russia. Climate change is seen as a significant impediment to military preparedness by diverting the services from their primary tasks. What’s worse, warming’s effects are expected to intensify in the years ahead, pushing more and more states to the point of collapse. And, just as worrisome, climate change threatens to endanger the future viability of many of the Department of Defense’s key stateside bases, diminishing its capacity to undertake major operations abroad.

In response, the Pentagon has adopted a proactive stance, seeking both to minimize the future impacts of climate change on its combat preparedness and to reduce its own contributions to climate change. To assess the vulnerability of its bases, the department initiated an audit of the climate vulnerability of its major coastal bases. It revealed that many of those bases were at risk of inundation from sea-level rise, storm surge, and severe flooding. Subsequent reports, covering all US bases and all climate-related perils (including wildfires, high winds, and prolonged drought), have generated considerable controversy as the Trump administration has sought to delete references to “climate change” and members of Congress have demanded access to unexpurgated versions of the documents (which have since been made public).

Despite the administration’s efforts to stifle discussion of climate change, senior military officials continue to worry about the vulnerability of their major bases to extreme climate effects. Recent events have amplified these concerns. In September 2018, Hurricane Florence inflicted over $3 billion in damage to one base alone—Marine Corps Base Camp Lejeune in North Carolina—and additional damage to other bases in North and South Carolina. A month later, Hurricane Michael ripped through the Florida Panhandle, destroying much of Tyndall Air Force Base and incapacitating seventeen F-22 Raptor stealth fighter planes, worth $334 million each. And in March 2019, severe inland flooding devastated Offutt Air Force Base—headquarters of the Strategic Air Command.

Work with Allies and Partners

Meanwhile, in a bid to improve its energy efficiency and reduce carbon emissions, in 2011, the Pentagon released the first of a series called Strategic Sustainability Performance Plans, mandating significant improvements in energy efficiency, renewables use, and emissions reduction. It decreed that 20 percent of all energy consumed at Department of Defense bases and installations had to come from renewable sources by 2020. Data released in 2016 showed that the services were making significant headway toward achieving these goals, but it has been difficult to track their progress since then.

The department has also expressed its commitment to promoting climate adaptation by the military forces of allied and friendly nations. From early on, the Pentagon leadership concluded that it would not be possible to prevent the widespread disintegration of fragile societies abroad unless those states were better prepared to cope with the shocks and pressures of climate change. Accordingly, the Department of Defense enjoined its overseas commands, such as Africom, to collaborate with the forces of local nations in developing emergency response networks and improved food, water, and health systems.

By 2015, such engagement efforts were well under way. According to the Pentagon’s report to Congress that year, Africom was working closely with partner nations “to enhance planning, responses, and resilience to the effects of climate change.” Among other activities, Africom was helping to conduct continent-wide training workshops on pandemic and natural disaster preparedness, usually in conjunction with local armed forces and civilian health agencies. The Pacific Command (Pacom), for its part, was working with local partners on enhanced disaster response capabilities and on efforts to promote “sustainable resource management and critical resource security.”

The 2014 edition of the QDR stated that climate change, “creates both a need and an opportunity for nations to work together, which the Department will seize through a range of initiatives.” This is a rather remarkable statement for an organization not known for its political outspokenness, and testifies to the extent of its concern over the globally destabilizing consequences of climate change.

For now, with Donald Trump in the White House, it is unlikely that senior military officials will speak so openly about their concerns over the national security implications of climate change. Nevertheless, it is evident that they have undertaken numerous initiatives—many still under way—to address its severe effects. In so doing, they have also developed a unique analysis of climate change and how it should be addressed. This approach, which places the vulnerability of human societies and institutions foremost and makes their protection the highest climate-related priority, deserves close attention by the rest of humanity, both at home and abroad.

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© REUTERS/Thomas Peter

In 1989, the global economy changed even more profoundly than global politics. While political rivalry actually never disappeared entirely, and nations like Russia never became liberal democracies, the “End of Economic History” could indeed be recorded, quite in the sense of Francis Fukuyama’s famous article.

1989 was not only the year that saw the Central European nations revolt against Communism, it was also the year that Japan suffered its biggest ever financial debacle, and the Soviet Union started its economic decline. Both developments deprived the world of two economic powerhouses. Scenarios of Japan becoming the world’s number one economy were quickly forgotten and gave way to the idea that the US would enter the era of “unlimited wealth,” as US economist Paul Pilzer wrote.

The major difference between the “post-historical” global economy that emerged in the 1990s and the traditional industrial economy of the 19th and 20th centuries was a new type of cooperation between major economic areas. Previously nations that tried to “catch up” actually used the same technologies as the others, but in a more effective way; this very fact explains why their economic rivalry only reinforced the political one. The fight for markets excluded compromises simply because it was a pure “zero-sum” game.

The post-industrial revolution of the 1970s and the 1980s changed all this. In the new globalized world, the US became the front runner in producing computers and semiconductors, in creating the operational systems these computers used, and in making the most effective economic use of new technologies. When selling software, the US and other Western powers didn’t sell the knowledge embodied in the original programs; they just sold copies, which could be reproduced in any quantity at zero cost. At the same time, the newly emerged economies in Asia used US technologies to create sophisticated hardware, producing these goods in increasing amounts.

This new configuration was perfectly “post-historical” in Francis Fukuyama’s sense. Both parts of the world’s economy became dependent on each other, and in this new order, there were no reasons for economic wars and quarrels. The United States was an absolute economic superpower. By 1992 it produced 26 percent of world’s gross product, according to IMF data, and controlled around half of the patents in force. But the economic policy it pursued vis-à-vis all potential rivals was super-friendly and extremely decent.

Benevolent Superpower

The US supported the economic reforms in Russia in the early 1990s; it bailed out Mexico from its debt crisis in 1994; it refrained from introducing any restrictions on cheap Asian imports after the 1997-98 financial crisis; and it advocated the accession of China to the WTO on conditions designed for a mid-sized developing economy rather than for a rising industrial powerhouse. During these decades, the peripheral economies grew fast, increasing the demand for US technologies and software, and supplying Western nations with affordable industrial goods, thus improving the quality of life in the global North. To my mind, this perfect interdependence was the essence of globalization. The globalized world was indeed a “post-historical” one.

The consequences of globalization are well known. Between 1991 and 2015, more than 1 billion people were brought out of extreme poverty, with “emerging Asia” accounting for roughly 75 percent of this number. China became the world’s largest exporter of goods in 2009, the largest industrial producer in 2010, and the world’s largest economy in 2016 (by GDP based on purchasing power parity). The “Asian century,” observers claimed, was set to begin.

The US share in the global GDP as measured by purchasing parity ratio decreased to 15.1 percent by 2018, and its trade deficit grew from $31 billion in 1991 to $622 billion in 2015. Asian nations turned into the largest holders of foreign currency reserves (China, Hong Kong, South Korea, Taiwan, Malaysia, and Thailand account for more than $4.65 trillion in combined international currency reserves), while the US is now the largest debtor nation in the world. It seemed that the newly industrialized world was successively challenging the post-industrial one, and the final outcome of this epic battle was far from predetermined. But while these numbers indeed appear to show that the gap between the leader and the follow-ups has narrowed dramatically, they do not reflect the whole situation. Look at the United States’ technological dominance instead―here, nothing much has changed.

Chips and Systems

As of early 2019, it’s true that more than a half of all desktop or notebook computers in the world were produced in China. But the country is able to furnish less than one-third of them with locally-produced microchips and remains highly dependent on imports. Meanwhile, up to 60 percent of all global makes rely on Intel microchips. In server processors, Intel’s domination is even greater―98 percent. Both Intel and AMD lead the development of new generations of chips, while mass manufacturing of the devices has been relocated to Asia. Companies like SK Hynix of South Korea or TSMC and UMC of Taiwan position themselves as American firms’ competitors, but continue to depend on them for the most vital technologies.

In 2018, more than 65 percent of all smartphones produced in the world were manufactured in China―and 78 percent of them were built by “genuine” Chinese brands, from Huawei and Xiaomi to OPPO and Vivo. But at the same time 97.98 percent of all the smartphones in the world run on either Windows, Android, or iOS operating systems. If all computers and computer-like devices are counted, the share of Microsoft, Google, and Apple software comes to an impressive 95.93 percent. As for the market for online searches, Google has a market share of 92.82 percent compared to 1.02 percent held by Baidu, the Chinese search engine, and 0.54 percent held by Yandex, which pretends to be the undisputed leader of the Russian high-tech sector. Among the 10 most popular social networks, US-based Facebook, YouTube, WhatsApp, and Instagram account for 8.12 billion users, while the Chinese or Chinese-oriented QQ, Douyin, and Sina Weibo only have 1.67 billion users. Of close to 300 billion e-mails exchanged in the world daily, up to 92 percent are received by inboxes registered with US-based companies. Apple and Google-built services are clearly in the lead with a 75 percent market share.

All the Big Players Are American

In 2007, PetroChina became the first trillion-dollar company by market value, and in 2008 Russia’s Gazprom advanced to the fourth position on the list of world’s most valuable companies. But as of March 2017, all the top 10 companies by market capitalization were once again American―for the first time since the 1970s! Therefore, the idea of a “US retreat from the world” looks a bit questionable. The same is true when looking at the financial side of things. As of April 2019, mainland China and Hong Kong together held around $1.33 trillion in US Treasury bonds. But even if they tried to sell them off, a “financial tsunami” would remain unlikely, since US banks can easily buy them out and get loans from the Federal Reserve using Treasury bonds as a perfect collateral. Just remember that between 2008 and 2011 the Federal Reserve’s balance sheet grew by $2.1 trillion. This could well be repeated if China engaged in full-scale financial confrontation.

In short, two decades into the 21st century, the US still appears the undisputed global leader in terms of technological domination and enjoys clear superiority in each and every domain of the information economy. If any other nation tried to wage “economic war” against the United States, it would be certainly defeated―and not so much by financial sanctions, asset freezes, or trade embargoes, but by denial of access to US-made or US-controlled technological and/or communication capabilities.

If all this is true, why do the other powers do nothing to counter this dominance? My answer is simple: because the American political leadership never used this component of US strategic power to subjugate any foreign government or foreign company―at least not until now. Since 1990, the US has waged many wars and boldly made use of its military power in Iraq (twice), Bosnia, Serbia, Kosovo, Afghanistan, Somalia, Libya, Syria, and many other corners of the globe. But it never relied on its technological superiority for promoting its political goals. As far as the information technology domain is concerned, the history of war and conflict seemed firmly over in all the years that have passed since Francis Fukuyama outlined his famous hypothesis.

Crossing the Red Line

But much of this has changed in recent years as President Donald Trump decided to “get tough” with China and launched a full-scale trade war against Beijing. Without any doubt, the US has good reasons, since China has for years imposed protective tariffs on US goods (in 2017, the US took $13.5 billion in custom duties from $506 billion Chinese imports, while the Chinese authorities levied $14.1 billion in duties on $127 billion worth of US imports). Chinese companies have also violated many US laws protecting intellectual property and forced foreign investors to share their technologies when outsourcing production facilities to China. More examples could be added.

The fundamental difference to all the previous economic tensions is that the US authorities have recently invoked sanctions against several Chinese high-tech companies―most notably Huawei and ZTE―actually accusing them of industrial espionage in the United States. And even this wouldn’t change the situation much if the restrictions imposed were aimed at curbing the companies’ imports from the US or their purchases of US-manufactured components. But as of June 1, 2019, several US companies, following the authorities’ orders, effectively banned Huawei from their services: Microsoft discontinued the supply of its Windows operating systems for Huawei laptops and other content-related services, and Google announced that it was blocking some elements of its Android operating system (GoogleMaps, YouTube, GooglePlay, Gmail) on Huawei smartphones.

Here, it seems to me, the US government crossed an important red line. It undermined the trust foreign hi-tech companies had in the technological platforms that for decades secured America’s dominance in the globalized world. Microsoft or Google don’t just produce American software―for a long time, they have been producing American soft power. It now appears that this soft power can easily be turned into a hard variety. The long-term consequences of such a change may be profound.

Chinese Retaliation

What will happen next? Of course, the affected Chinese corporations will suffer a major blow; Huawei and ZTE may well be stopped from their expected expansion―but I would be surprised if the Chinese government did not retaliate. Unlike the oil-producing countries or other commodity economies, China already produces billions of units of hi-tech products and will definitely continue its industrial expansion. Therefore it is crucial for Chinese companies to develop their own operating system (Huawei already announced it will have one available by the end of 2019)―and the Chinese government will do its best to help them achieve this end. At the same time, Chinese producers will want to devise their own microchips (today not a single Chinese company is listed among the top 25 semiconductor producers in the world), which will not be a huge problem since they have already acquired or stolen all the major technology from Western companies. So sooner or later, technological platforms will emerge that will be able to compete with the dominant American companies.

It should be noted that Chinese software and social networks are predominantly used either in China itself or by overseas Chinese. This hasn’t changed for years―while goods manufactured in China conquered the world, Chinese software has so far remained limited to the Chinese community. Now, however, the US would appear to be facilitating the internationalization of the Chinese hi-tech sector. This is helped by China’s incredible sway over the most important consumer markets in the world. In the case of Russia, for instance, consumer products account for less than 3.1 percent of overall exports; in the case of China, the figure exceeds 59 percent. The users of China-made computers and mobile devices abroad―serving around 2 billion people around the globe―are China’s main economic asset, which it will use with all possible ardor. As a result, a real alternative to the US technological platforms will emerge for the first time.

Of course, the US will not simply roll over. In recent years, it initiated at least two major economic shifts of global importance. First, the so-called Fourth Industrial Revolution introduced fully automated production techniques, thereby endangering the position of labor in the production chain. This undermines China’s and other rapidly developing countries’ main competitive advantage: the relatively low labor costs that propelled them toward global industrial leadership. In the future, US companies may be able to discard their overseas production capacities and bring not only their capital but also their industrial facilities back to the US, increasing their independence from China. Second, the US and Europe have embarked on a journey toward energy independence―focusing either on nonconventional extraction techniques (the US) or on developing renewable energy sources (Europe). Both trends will make the West far less dependent on commodity economies like OPEC or Russia.

The End of “Chimerica”

All this will definitely produce a kind of division in the current “post-historical” economic system. Both parts of what analysts had prematurely started to call “Chimerica” will increasingly rely on their strongholds. In the case of China, it’s the hardware produced on the mainland and supplied all over the world. In quite a short time, these devices will be furnished with Chinese operational systems and Chinese microchips―and the Chinese will do their best to make sure that their software cannot be uninstalled. I would also expect all Chinese smartphone manufacturers to replicate Apple’s system of free iMessages and FaceTime calls etc., which will lift overall demand for their products.

On the US side, there are many competitive advantages as well: first of all, the US will make full use of its total domination of the microchip market, which can hurt Chinese manufacturers dramatically; second, it may increase its pressure on Chinese consumers as an increasing number of software applications will not work on Chinese smartphones, and, last but not least, the West can use the global internet projects it is currently developing to increase its dominance. It can, for example, announce that China-produced devices will be barred from space-based internet providers. As the result, the global economic and informational realm that exists today will split apart, and countries and companies will lean to the one or the other dominant technological “core.” It’s difficult to say how far this division will go, but the general trend is easy to see.

Undoubtedly, the ongoing economic and technological split will be followed by the reinforcement of political contradictions between different blocs and alliances. Today, the US has by far the largest number of loyal supporters: in Europe, Latin America, and Japan, most will side with the Americans. The United States’ financial capabilities, its economic reach, and its long-term strategic alliances will contribute to creating a Western economic and technological space that cautiously opposes the one created by China. But the Chinese have made remarkable progress over the past two decades.

Between 2005 and 2018, China’s investments in Africa went from $23 to $352.7 billion; Chinese companies invested around $170 billion in Latin America; the government started the Belt and Road Initiative; and, of course, Beijing worked hard to turn Moscow into its economic vassal (all the leading Russian mobile communication companies opted for Huawei’s hardware to comply with a new law that obliges them to collect and keep all the customers records for at least a year). Both economic superpowers are likely to press their allies and economically dependent nations to adopt their technological and software standards.

How high is the probability of “Chimerica” being destroyed for good in the current economic showdown? It’s entirely possible. Even though China exported more than $539.5 billion worth of goods to the US in 2018, this accounted for only 4 percent of its nominal GDP. During the same year, Beijing increased the bank loans provided to local companies and households by more than 16.2 trillion renminbi ($2.4 trillion or 17.9 percent of country’s nominal GDP). The Chinese authorities seem oblivious to the danger of creating the greatest credit bubble in history as they seek to increase economic growth by boosting local demand.

Do Not Fear

So the preparations for a “decoupling” from the US are in full swing. Of course, if things take a turn for the worse, the world may face a full-scale economic recession. But it could well be the last recession of the globalized world. The political rhetoric that goes along with it―praise for protectionism, export substitution, and reliance on different nations’ own competitive advantages―may contribute to the creation of “multiple globalizations” centered around either the US or China.

Back in 2008, a young American strategist called Parag Khanna first described the model for this new era of economic and political competition. Khanna argued that the coming world will be led by three “empires”: the United States, China, and the European Union, which are capable of projecting their economic and societal models across the globe. All the other nations, Khanna argued, will be downgraded to either “second” or “third world countries;” the first group will at least be able to influence “imperial” competition, while the latter will no longer play any role in world affairs at all. This scenario looks more realistic as the technological showdown advances.

Should we fear the advance of this “post-globalized” world? I don’t think so. Economic progress is often uneven, fluctuating between cooperation and fierce competition between major rivals. As potential adversaries mature, the contradictions between them increase. But the most crucial point here is that since World War II, economic competition has played out increasingly peacefully. The 1989 economic revolution that left the US at the top of the economic hierarchy didn’t provoke any political quarrels―on the contrary, it caused a short “post-historical” era in world politics. In the economic and technological sphere, this “post-historical” age lasted even longer―and even now it seems that while economic tensions rise, the risk of political confrontation isn’t increasing. Francis Fukuyama, it would seem, had a point after all.

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© REUTERS/Joshua Roberts

Since it became a world power around 1900, the United States has had one permanent strategic goal: to prevent a single power from controlling the whole of Eurasia. Interestingly, during the first half of the 20th century, the danger came from Europe. American grand strategy came into its own when the US acted to prevent European powers from annexing China. Brooks Adams, a grandson of US President John Quincy Adams, warned at the time: “Were the Russians and Germans to coalesce to dominate Northern China, and were the country to be administered by Germans with German funds, a strain of a very serious nature might be put upon America.” Later, that same America allied itself with the Soviet Union to prevent Nazi Germany from controlling Ukraine, the Caucasus and, ultimately, India.

For most of the second half of the 20th century, the danger was Russia. Predictably, the US built up Europe and China as bulwarks against the Soviet Union. Now, in the 21st century, the circle is closing. This time, the danger is China. One might have expected the US to use Europe, Russia and India to balance China’s ambitions. But so far the iron logic of the process has been obscured by American triumphalism, itself a predictable consequence of the victory in the Cold War and the collapse of the Soviet Union, which bred the hope that the whole world might be unified under US leadership.

With the Belt and Road Initiative, China has placed the Eurasian question front and center of every geopolitical discussion. In its essence, the initiative is a plan to extend Chinese influence and power over the whole of Eurasia, obtaining access to energy sources from Russia and the Middle East, technology from Europe and large markets in Europe, India and Southeast Asia. Were the Belt and Road Initiative to achieve all its goals, the United States would become an island on the shores of Eurasia—still very prosperous and protected from direct interference in its affairs, but peripheral and absent from all global questions. It would become the blockaded party.

Faced with this nightmare scenario, the US has reacted on a number of fronts. The main one is the ongoing trade and technology wars. Washington has dealt a severe blow to China’s most successful global company. Running Huawei out of markets and suppliers may well doom the company’s ambitious plans. The US has also adopted wide-ranging tariffs against Chinese imports.

A Cold War Model

For a while, it seemed that, in its negotiations with China, the US meant to impose a number of onerous conditions on Chinese economic growth and technological development, preserving American primacy in these critical areas. But recent reports paint a different picture. When negotiations failed in May, the main difficulty turned out to have been Washington’s attempt to force Beijing into making fundamental changes to its economic constitution. It was trying to bring it closer to a liberal, Western model and get these changes carved into its domestic laws. There are two ways the US could think about the trade war with China: to limit or constrain Chinese economic power—and keeping the new tariffs in place might achieve this—or to convert China to a Western economic model. It seems that the Trump administration—but arguably not Trump himself, who regards ideological missions with scorn—chose the latter.

Ultimately, decision-makers in the US will have to ask themselves how this can be achieved. Does the Cold War model offer a solution? Can one imagine a scenario where the Chinese economy would not only slow down but effectively deindustrialize and enter a protracted technological winter? And would one then expect the country to fragment politically as the Soviet Union did? These are fanciful projections. If the United States is to adopt a strategy of maximum pressure against Beijing, it needs to have maximum clarity about the endgame.Does it expect China to change, perhaps after the collapse of the Communist Party? Surely, more modest experiments in regime change have failed dramatically, which would suggest some caution on this matter. If, by contrast, the goal is to decouple from China and create two separate economic spheres in the hope that the Chinese economy will quickly fold when left to its own devices, two questions must first be answered.

The first is about the extent of economic damage that such a strategy would inflict on the world economy. Many of the economic gains from globalization in the last few decades resulted from the creation of intricate global value chains. These gains would evaporate if value chains were to be repatriated. The process might well be highly disordered. It might also be conflictual, as both sides would blame the other for the economic pain being inflicted. Which takes us to a second question: can the two economic giants decouple their economies without heading towards conflict?
Most commentators will easily see where the logic of these questions leads us. If the United States ever finds itself in a new Cold War, this time with China as its global foe, it must be aware that it will not be facing the ghost of the Soviet Union but an immeasurably more obdurate and resourceful power.

Push Europe

So let us return to the nightmare scenario and see how it can best be avoided. The unification of the whole of Eurasia under a single power is so far from inevitable that it has in fact never been achieved. Consider the sheer diversity of political models now existing side by side across the supercontinent, the imperial traditions of many of the major powers in Eurasia, and the gradual spread of technology and economic growth to all its corners. These are critical factors suggesting that Eurasian political integration remains unlikely—economic integration is a different matter—and therefore there is no immediate need for Washington to renew its plans of a Eurasia whole and free, united according to a liberal, Western model and under American leadership.

The main counterargument can be answered with a creative reconstruction of the classical concept of balance of power. The US cannot be satisfied with a passive understanding of the concept. Balance of power rarely if ever comes about naturally. If we take the current distribution of power in Eurasia, there is reasonable cause to doubt that the balance will be naturally maintained. Combining economic and military power, China remains unmatched by either the European Union or Russia. The former is an economic superpower but a political and military minion. The latter is no rival to China on the economic plane. India and Japan remain too inward looking to be decisive factors in the Eurasian game.

When it comes to Europe, the strategy seems clear. It is one of the areas where the Trump administration has made progress. The United States was of course instrumental in rebuilding the European economy and prompting European nations to build the common institutions that have placed it on a stable footing. The task now is much more complicated because pushing Europe to become a major global political and military power will involve some brinkmanship. It may well be the case that Europeans will not move farther in this direction unless faced with a major crisis. And the US will have to sacrifice some of its immediate interests: the European Union will not create a common defense and security policy without diminishing the inordinate weight of the American defense industry in Europe in the process.

Find a Place for Russia

Russia poses a much more delicate question. The country has been moving decisively away from the West, and tensions with the US are now at the highest level since the end of the Cold War. Any rapprochement would have to come from the Kremlin, and that will not happen, at least not while Vladimir Putin is in charge. At the same time, the US risks bringing about an informal alliance between China and Russia. If the approach in Washington is to lump them together as the two major threats to the existing global order, they will act accordingly. Even if naturally inclined to develop as independent powers, China and Russia may well feel that the time for disagreements will have to wait while the task at hand is to overturn American hegemony. How does one square the circle? How can the US keep its distance from Russia’s geopolitical ambitions while simultaneously preventing a Eurasian entente between its two great rivals?

Within the confines of American power, the puzzle cannot be solved, but some possibilities open up if we enlarge the sphere to the full Eurasian chessboard. Every measure the US might adopt to strengthen Russia as an independent pole in Eurasia could be used by the Kremlin against its unwitting benefactor, but that should not be a reason to keep Russia isolated. The United States may feel that Putin’s Russia is an abomination. It may want to limit its engagement with the Kremlin. But it should not close Russia’s door to the West, to Europe and Turkey, leaving it entirely dependent on China. The goal is to find a place for Russia in the Eurasian balance of power—an independent pole between Europe and Asia—while preserving the ability to keep it in check and, when necessary, force it to respect that balance.

As for India and Japan, the strategic goal should be clear: to allow the two countries to grow more confident and outward looking, capable of marshaling their abundant resources to play an active global role. And why should the US fear or regret such an outcome? To keep them inside its chain of command, useful only when acting under US leadership, is profoundly self-defeating from the point of view of long-term American interests. Only as fully sovereign and autonomous actors can India and Japan contribute to a lasting balance of power in Eurasia.

The World as Literature

Were all these steps to be adopted and a coherent strategy developed, the United States would slowly emerge as a great balancer. Its role would remind one of the role played by Great Britain in 19th-century Europe: with one foot in the continent and the other one outside, perpetually balancing every European power against each other, determined to avoid a future where Europe fell under the domination of a single power. Its strategists knew that Great Britain would remain more powerful than each of the individual European states, but inferior to their combined strength.
The US must become in relation to the Eurasian supercontinent what Great Britain was in relation to Europe, but with a number of important revisions. First, the new version of Britain’s splendid isolation—the ability to influence the Eurasian chessboard while remaining sheltered from its affairs—will not come naturally, or in a fit of absentmindedness. The US will not be able to rely on its insular geography and control of the seas. Borders are more diffuse, and technology has eliminated distance to a great extent, so a form of forward deployment has become necessary, if only to preempt terrorist threats and face cyberattacks and nuclear-armed rogue states.

Second, the US does not have a ready-made world of competing great powers at its disposal. The trend is to return to such a world—the building blocks are available—but some construction work is still necessary. More than a great balancer, America must become a great creator. China has to be cut down to size—a hard-edged negotiation on the terms of trade and the temporary imposition of tariffs may well prove necessary—and other pieces must be built up if an equilibrium is to be the final product. But is this such a great transformation in terms of general psychology? The United States already regards the future of the world order as a great narrative whose main plot lines are written in Washington. What I am advocating is to replace the epic with the novel: world history is not coming to an end, and it does not follow a single line of development. It is open-ended and polyphonic. It contains multitudes. Every character and way of life can find its place in the great narrative.

The chief characteristic of the modern novel is the plurality of consciousnesses, with equal rights and each with its own perspective, the organized coexistence and interaction of spiritual diversity, not stages in the evolution of a unified spirit. The narrator should not pick sides, and that is why the narrator and not the characters are ultimately in control. For America, the age of nation building is over. The age of world building has begun.

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© REUTERS/Murad Sezer

The brutal murder of dissident Saudi journalist Jamal Khashoggi in the Istanbul consulate has prompted swift condemnation around the world, but the West’s political response has been mixed so far. For example, German Chancellor Angela Merkel has suspended arms exports to Saudi Arabia, while French President Emmanuel Macron has remained non-committal and has decried immediate arms embargoes as “demagoguery.” US President Donald Trump, meanwhile, has been taking a “wait and see” approach, and that has frustrated many in the United States, including Republican senators.

Despite the polarized political atmosphere in the run-up to the midterm elections, there has been surprisingly strong bipartisan agreement that Washington should take a tough stance on Riyadh. And expectations are that Congress will continue to put pressure on the Trump administration. Indeed, if congressional leaders decided to block American weapons sales and military aid to Riyadh, this could fundamentally alter the US-Saudi relationship.

In the past weeks, President Trump has been reluctant to come down hard on the Saudis. Early on, it became clear that his main concern is preserving “his” $110 billion arms deal (in fact, negotiations started under President Barack Obama), arguing that halting the deal could risk other Saudi non-military investments in the US worth $450 billion and endanger a million American jobs (the numbers are exaggerated).

Trump’s advisers have pointed out that the US-Saudi relationship is too important, both commercially and strategically, to be damaged because of the death of a journalist. Indeed, the Trump administration considers Saudi Arabia–next to Israel–its key ally in the Middle East and an important partner to curb Iran’s influence in the region. However, Trump made a drastic shift last week when he said that “the cover-up [of Khashoggi’s murder] was the worst in the history of cover-ups.” It’s questionable, however, whether the White House is willing to take rigorous measures to punish Saudi Arabia’s leadership.

Senators on both sides of the aisle, however, don’t want to sit on their hands. They were suspicious of the Saudi explanations for Khashoggi’s disappearance from the start. One of the most vocal Republican senators has been Lindsey Graham, a Trump ally, who urged the administration to “sanction the hell” out of Saudi Arabia. Republican Senator Rand Paul, who has supported Trump on many issues, even argued in favor of cancelling the arms deal. To urge Trump to take the allegations against Riyadh seriously, 22 senators from both parties wrote a letter calling upon the administration to launch a government investigation into the Khashoggi murder, which could trigger US sanctions against Saudi individuals.

Congress Is Watching

There are several reasons for the senators’ strong reaction. First, the fact that Khashoggi was a US resident and a contributor to The Washington Post certainly helped to bring his murder to congressional attention–in contrast to the many other human rights violations occurring in Saudi Arabia. Second, the case enabled senators to demonstrate that Congress is an independent branch of government that has the power to challenge Trump’s positions. Senators feared that the Trump administration might get “back to business” with Riyadh once the case had dropped off the political agenda. The senators wanted to show that Congress will speak out against human rights violations even when the administration is unwilling to do so. Third, most of the Republican senators who signed the request do not seek re-election in the upcoming midterms and are thus under no pressure to align with Trump’s position. Finally, some lawmakers may well fear a debate about Saudi influence campaigns in Washington that also addressed congressmen–a debate that has started already.

When it became clear last week that the Trump administration had to more resolutely condemn the murder, Secretary of State Mike Pompeo announced sanctions on those individuals found responsible. But Pompeo also stressed that America’s “shared strategic interest with Saudi Arabia will remain.” Therefore, it seems unlikely that the administration will take more drastic steps, such as cutting US military aid. Still, on Wednesday Pompeo called on the Saudi leadership to negotiate a ceasefire in war-torn Yemen.

If the Democrats win back the House of Representatives (not an unlikely scenario), they will likely push the administration to harden their line further still and may even derail Trump’s Middle East policy. For example, the House Foreign Affairs Committee has the power to stop foreign arms sales. However, congressmen from both parties will also fear repercussions for the US defense industry, which maintains a strong lobby on Capitol Hill and employs many Americans. A complete overhaul of US-Saudi defense cooperation is therefore unrealistic, and expectations that the Khashoggi murder will fundamentally alter US-Saudi relations premature at best.

Meanwhile, European governments and lawmakers will pay close attention to the US response. The situation in Europe is similar: while members of the European Parliament and national parliamentarians have requested a Europe-wide arms embargo against Saudi Arabia, several heads of government are reluctant to take such a fundamental step, including Macron. If the Trump administration ends up letting off Riyadh lightly, some European governments might follow suit.

But Europe should be brave. Taking a principled stand in response to the Khashoggi murder is a chance to show that–in contrast to Donald Trump’s foreign policy–the Europeans are willing to speak out clearly against human rights violations and take rigorous measures, even at the expense of economic benefits.

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© REUTERS/Stringer

America’s significant engagement around the globe has always been justified by a variety of reasons: making the world “safe for democracy” (Woodrow Wilson); humanitarian interventions to prevent genocide; concerns over the proliferation of weapons of mass destruction, etc. However, Washington’s willingness to intervene was also founded on its own national interest—securing the United States’ energy lifelines. Over recent years, however, the development of huge shale oil and gas deposits has drastically reduced US dependency on energy imports and allowed the country to abdicate its global leadership role.

It has also reduced the willingness of American society to bear the financial burden for stability in other parts of the world. The United States’ foreseeable energy independence is the economic basis for a policy of withdrawal. With his “America First” rhetoric, Donald Trump has become a symbol of this policy. But its origins lie with the Barack Obama presidency. The rebirth of isolationist traditions in the US goes hand-in-hand with the development of its energy resources.

The precise opposite is true for China. The “Middle Kingdom” requires gigantic energy sources to sustain its growth. And this demand has determined Beijing’s foreign policy of late. China is now attempting to identify global import options and secure these with tremendous financial and diplomatic efforts. Liquefied natural gas (LNG) from Qatar, oil from Venezuela, uranium from Central Asia, coal from Australia—the burgeoning world power thirsts for ever new sources in order to sate the growing needs of 1.3 billion Chinese.

The expansion of Chinese military capabilities, not least its power politics in the South China Sea, indicate that the People’s Republic (as the US in the past) is preparing to defend its supply routes if necessary by way of its navy and air force. Beijing’s international energy policy is rapidly filling the void left by the American retreat. While China had been only gradually and hesitantly advancing towards the role of a world power,  Trump’s withdrawal has accelerated its pace and bolstered China’s assertiveness on this path. Recent developments reveal how energy policy is shifting the global balance in favor of China.

Petro-Yuan vs. Dollar

Since the conclusion of the Bretton Woods Agreement in July 1944, the US dollar’s status as global reserve currency has imbued it and thereby the US with unparalleled power. Oil, by far the world’s most traded commodity, is priced according to the benchmarks Brent or West Texas Intermediate, both traded in dollars. The US has therefore always been able to rely on an elevated global demand for its currency, which could then could be turned into tangible goods and services. Or it could be weaponized, as was the case with sanctions against Russia and Iran.

Perhaps to preempt such action, China has now introduced its own oil futures benchmark denominated in yuan. It marks the culmination of a ten-year push by the Shanghai Futures Exchange Commission to give the country more pricing power in Asian oil markets. Moreover, the “petro-yuan” will be a first step toward de-dollarization and, considering that China is the largest oil importer, may quickly become the most important Asian oil benchmark. Given that its dependency on oil imports will rise over the next decade from currently 69 to 80 percent, the petro-yuan is China’s attempt to attain sovereignty over its own oil trade.

In recognition of this development, the yuan has been included in the International Monetary Fund’s currency basket. The European Central Bank now also holds yuan in its foreign currency reserves, having bought an equivalent of €500 million in 2017. Other countries have already signaled the desire to follow suit, putting the Chinese government in an increasingly influential position in international monetary matters.

However, these developments have a much wider scope. The emergence of the petro-yuan could fuel further currency wars, accelerate the diversification away from the US currency, and repatriate billions of dollars to the US on account of dwindling global demand. Washington’s ability to keep the expansion of its money supply decoupled from domestic inflation would become severely impaired in the long run and require a great deal more fiscal discipline on the part of the Federal Reserve. Whether the yuan will be a more successful challenger than the euro, which was introduced 16 years ago among similar hopes and fears, but ultimately left the dominance of the dollar untouched, remains to be seen.

Taking the Lead in Climate Policy

The Chinese claim to leadership is also displayed in the area of climate policy. While Donald Trump dubbed climate change a “Chinese hoax” and pulled the US out of the Paris Climate Agreement, President Xi Jinping has positioned himself as a global climate leader. At the 2017 World Economic Forum in Davos, he announced, with an eye to Washington, that his country would respect the Paris Agreement. In October 2017, during his opening remarks at the 19th congress of the Chinese Communist Party, Xi even called for China to take the helm in the fight against climate change. The EU, Canada, California, and numerous American metropolises have agreed to take on the challenge together with Beijing. As a direct result of US withdrawal, China managed within just a few months to perform a fundamental transformation of its image: from coal-intensive scapegoat to visionary champion of global climate policy.

This about-face is not solely the expression of a skillful PR campaign. China is seriously in the process of substantiating its claim to leadership with concrete measures. Take the country’s first street paved with solar panels in the city of Jinan in central China. It covers 6000 square meters of the city’s expressway and produces 820 kilowatt-hours of electricity that are fed into the Shandong Province grid. And 500 kilometers to the south, near Huainan, the Chinese have built the largest floating photovoltaic power station with 165,000 solar panels generating enough electricity to supply 15,000 homes. Another floating solar power plant is scheduled to come online this year, and it is four times as large.

It is true that coal still dominates China’s energy mix and will continue to do so for the foreseeable future. China’s power plants burn as much coal as the rest of the world combined. Yet emissions from coal have been declining over the last three years, and the current five-year plan stipulates a two-year moratorium for issuing permits for new coal power plants. The rapid development of smart networks, a revamped electricity market design, and the advancement of renewables are clear signs for a real energy transition, perhaps even an energy revolution, taking place in China.

China Spends, the US Cuts

The country is planning on investing €317 billion in renewables over the next three years, furthering their unprecedented expansion. And China already has close to 200 gigawatts of installed wind capacity, more than twice as much as the US. Two-thirds of photovoltaic cells sold worldwide and half of newly installed wind turbines come from the People’s Republic.

For the Chinese leadership, it’s less about reducing greenhouse gas emissions and more about three key points: fighting unbearable smog in China’s largest cities, garnering international recognition, and gaining an edge over the competition in global markets in terms of technological innovation and political power.

Here, too, the US is on the verge of surrendering first place to the Chinese. The Trump administration is planning to ask Congress to cut the funding for energy efficiency and renewable programs by 72 percent in the fiscal year 2019. Many institutions will suffer, but the hardest hit will be the National Renewable Energy Laboratory (NREL), with research and development funding dropping 78 per cent for solar alone.

China’s leadership is especially pronounced in the automotive sector. Chinese regulators have just halted the production of 500 car models that do not fulfill the country’s environmental standards. Beijing is confident that, as the world’s largest vehicle market, they can rely on producers adjusting to efficiency standards set by China. It is betting on e-mobility, and everyone is following suit.

The Electric Silk Road

While the US believes it will be able to isolate and sanction major countries like Russia and Iran, China is looking for means and ways to forge economic and technological ties with as many states as possible. China’s Belt and Road Initiative (BRI), a modern version of the Silk Road, intends to connect the world’s second largest economy with Southeast Asia, Eurasia, the Middle East, Europe, and Africa via a network of oil and gas pipelines, electricity and fiberglass networks, highways, rail connections, as well as air and seaports.

The Chinese plan to establish an electricity super-network is barely being noticed in Europe and the US. In May 2016, the Chairman of the State Grid Corporation of China (SGCC), Liu Zhenya, submitted a proposal for a $50 billion electricity network spanning the globe to combat pollution and climate change. He enjoys the support of President Xi. The plan envisages more solar parks and wind farms, geothermic energy, and hydropower stations across a globe increasingly interconnected by a super-grid.

In the mid-term, the plan foresees the expansion of trade and investment along the new Silk Road. SGCC has already honed in on ten transnational transmission networks meant to connect China with, for example, Russia or Mongolia. The SGCC is also trying to purchase 20 percent of the German transmission system operator 50Hertz. That would be the first time a Chinese company holds a stake in critical telecommunication and electricity infrastructure.

The Belt and Road Initiative is a significant Chinese projection of power. Not least because it is presented as a soft power project focused on renewable energy, communication, transportation, and fight against climate change. In reality, China is exhibiting strength and gaining political and economic influence on the global stage.

Europe’s Response

How should Germany and Europe as a whole respond to this new Silk Road? First, the Belt and Road Initiative is not a short-term plan, but will presumably remain at the core of Chinese foreign, economic, and energy policy for years to come—and Germany and Europe need to develop a long-term strategic response. Given the vast resources backing the project, it would make little sense to attempt to fight or contain it. Rather, engagement, support, and cooperation are key. Just as the old Silk Road was not a one-way street, the current project holds new and unexpected opportunities for European researchers, engineers, managers, bankers, and traders.

The State Grid Corporation of China, one of the world’s largest companies, organized a conference in Frankfurt last year where it presented a vision of extending its reach all the way to Europe. It made an offer for comprehensive political, economic, and technological cooperation. So far, academia has heeded the call to a greater extent than politics.

Germany’s government could also appoint a Silk Road representative, who together with German industry, the country’s financial and trade institutions, its research bodies, and politics, could organize conferences and workshops along the Silk Road, identify areas of cooperation and coordinate the implementation of projects. The Foreign Office already has a working group on connectivity that is examining the Silk Road concept and could serve as a base for such a representative. But a German reaction will not suffice. It is essential to bring in the EU. A similar coordination office could be established with the Commission.

Bring in Russia, India, and even the US

Russia should also be an integral part of the concept. The gas pipeline “Power of Siberia” between Russia and China is set to transport 38 billion cubic meters of natural gas to China as agreements on a “Power of Siberia 2” pipeline are finalized. This all further illustrates the close collaboration between the two countries in energy matters.

What’s more, we should make the (not easy) attempt to recruit India for this project to avoid the impression that the BRI initiative is directed against Delhi. India has reached an agreement for an Indo-Pacific security cooperation with Australia, Japan, and the US as a way to contain the perceived aggression of Chinese expansion in the region. Because of these real fears and manifest tensions, it is crucial that India is welcomed and becomes part of the technological and economic cooperation framework.

Lastly, it would also be desirable for the US to participate in such initiatives. It could recognize the Silk Road concept as an opportunity for America and its industry. However, the project is only conceivable as a cooperation on equal footing, relying on a sensitive understanding of the traditions and mindsets of all involved partners. An “America First” approach based on elbowing, friend-or-foe thinking, marginalization, sanctions, and meddling in the internal affairs of other states will not be compatible. That is why we cannot wait for the US, but rather have to formulate our own response in Germany and Europe, and act accordingly.

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© REUTERS/Leah Millis

In May, US President Donald Trump withdrew from the Iran nuclear deal. Now Europeans are waiting for another blow from Washington: the beginning of a transatlantic trade war. On March 23, Trump announced sweeping tariffs on steel and aluminum imports based on national security concerns. Though this decision was mainly directed against China, long-term allies such as Canada and EU member states are also affected. The temporary exemption that the US granted the EU will expire on June 1, and the tariffs will kick in then unless the Trump administration changes its mind.

Troublingly for Europe, the United States only wants to exempt Europe permanently from the steel tariffs if the EU offers significant market access concessions, for example lowering its tariffs on US cars. In addition, Trump has threatened to impose tariffs up to 25 percent on imported cars, based again on the same national security provision used for the metal tariffs, Section 232 of the Trade Act of 1962. If Trump decides to impose these tariffs, it could start a spiral of protectionism.

What are the chances of defusing trade tensions? A compromise on steel is possible. If the US sets a steel quota of 100 percent of last year’s steel and aluminum exports from Europe, EU countries probably would not be willing to retaliate. But if the quota is lower, retaliation is more likely. However, for car tariffs, there is no easy solution in sight. Nor is there any agreement on how to move forward in the future. It would make economic sense in the long run to start talks about an EU-US trade deal (previously known as TTIP), negotiated on the basis of an equal partnership. But for this, Germany and France need to find a common ground. At the moment, intra-European disputes look set to weaken the EU’s position as a global player in world trade.

Using the EU’s Economic Power

So far, Europeans have reacted the wrong way to the American threats. The European Commission is responsible for the Common Commercial Policy, one of the EU’s most integrated policy areas. But instead of going through the Commission and forming a unified position vis-à-vis the US, the two largest EU member-states, Germany and France, have rushed ahead on their own.

For example, the German economy minister, Peter Altmaier (pictured), has proposed talks with the US about a “TTIP light”, which would only deal with industrial market access. He wants talks with the Trump administration to be positive and constructive in order to alleviate the tensions in the transatlantic trade relationship. Through this offer Germany also wants to protect its fabled car industry which has caught Trump’s attention.

Meanwhile French President Emmanuel Macron has made a great show of his close personal relationship with his American counterpart. However, with regard to trade, France is taking a much less conciliatory tone than Germany. France supports the European Commission’s view, namely that there is no reason to negotiate under (an unjustified) threat. Cracks in Franco-German cooperation are also appearing with regard to a potential transatlantic trade deal. Macron has said that such a agreement with the US must also include non-tariff barriers as well as agriculture and public procurement. And he has suggested that the EU should only negotiate trade deals with partners who support the Paris Agreement on Climate Change, though he would likely be willing to make concessions in this regard.

The divergent positions of Germany and France weaken the European position, and help the US to divide the individual European member-states. It sent the wrong signal when German Chancellor Angela Merkel and President Macron made individual visits to Washington in April to discuss trade as the US president has difficulties understanding and accepting the concept of the EU.

Still, Donald Trump knows that a unified EU strengthens the European position, which is why he is trying to drive a wedge between European powers. During Macron’s visit he said that “trade with France is complicated because we have the European Union. I would rather deal just with France. The Union is very tough for us. They have trade barriers that are unacceptable.” Trump’s lack of knowledge on the subject notwithstanding, the point of the EU is that its members act together on trade: The EU must use the unified power of all its member states (including Germany and France) to deal on equal terms with the US.

Acknowledging Imbalances

A compromise in trade is an important test for Franco-German cooperation. Paris and Berlin should prove that they take common European interests seriously in the medium- and long-term. In other words, they must be willing to accept that national interests need to temporarily take a back seat. A common European position in trade sends a strong signal, particularly in times where the centrifugal forces in the EU are increasing. Without a common understanding between the two largest member-states, the success of the supranational European common commercial policy would be threatened.

There are three key elements to what should be a common Franco-German strategy.

First, Paris and Berlin should keep in mind that the US remains the most important trade and investment partner for the EU and vice versa, harsh rhetoric and political chaos in Washington nonwithstanding. Therefore, the economic rationale for a transatlantic trade deal has not changed. Both sides would benefit from a reduction of trade and investment barriers. France and Germany should not approach the Trump administration on their own; rather, they should convince the Commission that talks about a comprehensive free trade agreement are important in the long-term.

Paris should move closer to the German position, showing greater readiness to open talks between the EU and the US. Here, the good relationship between Macron and Trump can be used to promote European interests. Macron may not have convinced Trump to stick to the agreement on Iran’s nuclear program, but their apparent friendship is still a basis for future talks. At the same time, Berlin should accept that the agreement needs to be comprehensive and not just focused on good market access for industrial goods, German ones in particular.

Admittedly, the difficult TTIP talks will hardly have any chance of success under President Trump and his protectionist trade policy. However, it is still worthwhile to review the agreements reached in previous negotiating rounds, and to look where negotiations could continue in the long run. To this end, the Transatlantic Economic Council (TEC), which was founded in 2007, should be used intensively to talk on a working level about regulatory cooperation.

Second, Europe must commit itself to defining new rules in international trade and solving existing problems on a multilateral level. The American concerns about Chinese subsidies for key industries and theft of foreign intellectual property are not imaginary; indeed, Europe shares many of them.

However, the introduction of punitive tariffs is the wrong way to move forward. For example, the problem of (largely Chinese) steel overcapacity should not be solved bilaterally, but on a multilateral level in the context of the G20/OECD Global Forum on Steel Excess Capacity. German and France should work with the White House to ensure US cooperation in these forums.

Third, there should be a discussion about international trade imbalances. Germany should take seriously the American and European—and particularly French—criticism of its huge export surplus. Trump’s claim that trade deficits are a sign of unfairness lacks any economic credibility. But it is true that Germany does not comply with European rules stating that a member-state’s trade surplus may not exceed 6 per cent of GDP. The typical German response—that its surplus is a sign of competitiveness—is no longer sufficient. Germany should strengthen its internal demand through increased investment in infrastructure and digital networks, thus reducing its surplus. If the new German government is still committed to restrained spending and no budget deficits whatsoever, the least it could do is to show more openness for dialogue. This would be an important gesture of goodwill with regard to Paris, Brussels, and Washington.

If Germany and France incorporate these three elements in their trade strategy, the EU will be less divided and better able to reach a deal with the difficult partner in the White House.

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© REUTERS/US Navy/Greg Messier

US President Donald Trump’s new National Security Strategy and National Defense Strategy describe a contested global landscape challenged by China and Russia as well as rogue regimes like Iran and North Korea. While the degree to which to the US will adhere to this strategy is unclear, these two documents accurately reflect the strategic reorientation that is currently underway in US security and defense policy. The Trump administration’s focus on inter-state competition may be a continuation of trends initiated years ago, but it sits awkwardly with the outlook and priorities of Washington’s European allies.

For reasons ranging from internal tensions to a fervent belief in a justice-bound “arc of history,” most Europeans have been reluctant to embrace the notion of great power competition. The zero-sum view of international affairs reflected in the NSS and NDS therefore clashes with the worldview that has been promoted in Europe for the last 70 years.

Of course, this is not to suggest Europeans are naïve. If anything, Russia’s illegal aggression against Ukraine since 2014 has ended Europe’s strategic slumber, bringing about a strengthening of the continent’s defense posture. Several European strategic documents—including, notably, the 2017 French Review of Defence and National Security—also offer clear-eyed assessments on the consequences of global strategic competition.

The US and Europe do share an over-arching interest in rolling back the influence of authoritarian powers like Russia, China, Iran, and North Korea. Yet they differ in their respective threat perceptions and prioritizations. Concepts such as the Trump administration’s “peace through strength” mantra worry European leaders, most of whom are more accustomed to soft power and diplomatic tools. In this regard, while the NSS and NDS enjoy broad support with European decision-makers for their view of Russia as a revisionist power, the potential for further deterioration in US-Russian relations, such as over nuclear issues, and the effects this would have on European security are nevertheless a cause for concern.

Meanwhile, few European capitals share the Trump administration’s view of China as a revisionist power actively challenging the international order. Although the European view on China is hardening, this is so far mostly confined to the economic sphere. Some European leaders even see Beijing as a potentially useful partner when it comes to upholding multilateralism or combating climate change in the age of Trump. Few European states have either the presence (only France and the UK have overseas territories in the Asia-Pacific) or the necessary capabilities to approach China as a strategic military challenge.

North Korea is viewed in Europe as a serious threat to regional order in Asia and to the non-proliferation regime, but is far from the highest priority in most European capitals. Similarly, most European countries do not share the Trump administration’s adversarial view of Iran, preferring instead to insist on strict adherence to the JCPOA nuclear deal and seeking a deepening of political and economic ties with Tehran.

In contrast to these seemingly remote threats, European leaders have to contend with several serious crises closer to home: Brexit will deprive the bloc of one of its foremost economic and military powers; tension between Brussels and some Central and Eastern European capitals is only getting worse as nationalistic movements threaten to cripple the EU’s internal cohesion; and a revanchist Russia is now seeking to restore its sphere of influence in the East, aggressively subverting national democratic institutions through disinformation, cyber-warfare, and economic coercion.

In a sense, while the NSS and NDS offer a strategic long-term vision of the evolving international system, Europe is mired in short-term challenges that cloud its field of vision. Rather than great power competition and rogue regimes, Europe is fixated on curbing migration and terrorism stemming from disorder in Syria and the wider Middle East and from instability in North Africa, the Sahel, and sub-Saharan Africa. In the east, the potential for renewed instability in the Western Balkans and Russia’s destabilizing actions occupy what is left of the bloc’s strategic attention. On top of this, addressing climate change remains a top EU foreign policy objective.

Reconcilable Priorities

Yet the diverging priorities of the US and Europe are far from irreconcilable. Countering Russian interference and revisionism is key to securing the EU’s eastern flank, and also fits into the Trump administration’s strategy. Stabilizing the bloc’s southern neighborhood aligns with Washington’s interests, and also coincides with the aims of US allies in the Middle East. And, as the world’s largest trading bloc, the EU has every interest in working with Washington to ensure that intellectual property rights and freedom of navigation are respected by its second largest trading partner, China.

That being said, the divergence is real, and some significant introspection is required on both sides of the Atlantic lest the gap between Washington and Brussels become a chasm. Europe has to be prepared to show courage and resolve. Courage because European leaders have for too long relied on an “end of history” narrative to justify their continued reliance on the American military. In order to effectively protect democracy and the global liberal order, Europe will have to take the lead on certain operations, for instance on stabilization and counter-terrorism efforts in the southern neighborhood, especially as the US shifts its focus to great power competition. In addition, Europe must develop its own strategic culture, sharpen its understanding of what inter-state strategic competition means for itself, and invest in emerging capabilities such as artificial intelligence, cyber countermeasures, and drone swarm technology. Europeans must also show resolve: they must be prepared to sustain commitment to their own security in the face of severe budgetary constraints and possibly even the loss of life.

On the other hand, the US must play a supporting and encouraging role in Europe. If the Trump administration intends to keep with its predecessor’s “leading from behind” approach on many matters pertaining to European security, it must at the very least tolerate a more independent European defense posture. More importantly, the US must support European efforts such as PESCO and EDF. American capabilities will remain crucial to European security for decades to come, especially with regard to military deterrence against Russia. In this regard, the Trump administration’s reassurances on NATO are most welcome. But American benevolence should also extend to the EU. Supporting actors that seek to weaken or dismantle the bloc undermine transatlantic trust and do not further US interests.

The NSS and NDS show that Washington, for one, is already giving serious thought to how the world will develop in the coming decades. However, the US is misguided when it comes to non-military responses to security challenges. From its gutting of aid programs to its downsizing of the State Department, the Trump administration seems loath to think outside of the military toolbox. Be it revisionist powers’ insidious sapping of the global informational space, state fragility in sub-Saharan Africa, or the already-observable consequences of climate change, some of the challenges to US power and prosperity in the 21^st century will not be solved by military means alone.

Above all, Europe and the United States need a joint vision. The security architecture that binds the two continents is founded upon shared political and strategic concerns. The NSS and NDS highlight the challenges that democratic societies on both sides of the Atlantic Ocean will have to grapple with in the coming decades. Whether the EU can muster the determination to power through its current crises and accept a larger share of the global security burden remains to be seen. Similarly, it is uncertain whether Washington is willing to accept a more militarily autonomous Europe and whether US global leadership can be preserved in the absence of investing in soft power tools. Absent this major course correction on both sides of the Atlantic, Europe and the United States seem condemned to move, ever so slightly, further apart.

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© REUTERS/Thomas Peter

One year into the presidency of Donald Trump, international affairs are in flux—not in the perennial sense that “a lot is going on across the world,” but in the more fundamental sense that things are changing structurally with an unknown outcome.

Trump has accelerated a central, structural change in international affairs that was already happening prior to his arrival in the White House: a noticeable decline in the United States’ political desire as well as capacity to lead on the international stage. Under its most recent four presidents, the US has gone from declaring itself indispensable to international diplomacy, to regretting its period of unilateral hubris, to trying to lead from behind, to not leading at all.

Today, Trump’s determination to take the US out of the leadership game is forcing America’s allies and opponents to adjust and challenging them to take greater responsibility for their future security as well as prosperity. The world is at the beginning of an uneasy new normal, where leaders across the world are driven to adopt more proactive foreign policies in order to compensate for the loss of US leadership.

The Receding Tide of US Leadership

Many people’s worst fears of a Trump presidency have not come to pass. US troops remain forward-deployed in Eastern Europe, and US-Russia relations are frozen in an uneasy stand-off of mutual suspicion. The president has appointed national security cabinet members who understand the value of NATO, and he has grudgingly committed his administration to uphold Article 5 of the Atlantic Alliance. He has re-engaged with traditional allies in the Middle East. He has not imposed the swingeing unilateral trade measures against China that he promised during his campaign.

Even in those areas where the president has taken radical steps–on climate change, the Joint Comprehensive Plan of Action (JCPOA) on Iran’s nuclear program, or Jerusalem – his dramatic public announcements disguise a near-term continuity and leave room for maneuvering. His choice of method for withdrawing the US from the Paris agreement on climate change extends US adherence to the end of his presidential term. His “non-certification” of the Iran deal transfers responsibility for deciding whether to abandon the agreement to an already overloaded US Congress. His statement recognizing Jerusalem as the capital of Israel and embassy move will not occur for another three years–also around the end of his first presidential term.

On the other hand, these ambiguities cannot disguise the fact that the Trump administration has accelerated the shift from the US being a committed, if imperfect world leader to being a more explicitly self-interested superpower. His mantra of “America First” is a declaration that the US will relinquish its core role of leading the world by example.

The Trump administration’s approach to regulation (or de-regulation), whether on the environment, financial supervision or corporate transparency in developing countries, appears designed to create market advantage for US firms versus their international competitors. This has meant the US relinquishing its role as the driver of a new wave of international liberalization of trade and investment–specifically through the Obama administration’s proposed Trans-Pacific Partnership and Transatlantic Trade and Investment Partnership. They would have generated a common rise in standards on issues such as public procurement, intellectual property protection, labor standards and internet governance across two of the largest regional marketplaces in the world.

Similarly, Trump has removed the US from its role as a promoter of better domestic governance and democracy. His most successful visits have been with authoritarian leaders who offer the best opportunities to secure economic benefit for the US. Trump’s references in his first speech to the UN General Assembly in September about the primacy of strong sovereign nations with different values and different dreams being able to “coexist … on the basis of mutual respect” could easily have been delivered by Chinese President Xi Jinping.

Trump supporters would counter that his administration is now simply playing the same hard ball as everyone else, and that far from all Americans benefited from the liberal, open market approach of his predecessors. This may be true, but under his leadership, America is returning to the role it played in the mid-1930s, when its beggar-thy-neighbor domestic policies contributed to the rise of authoritarian governments around the world—and ultimately to a second world war.

Ripple Effects

History may rhyme, but it rarely repeats itself, as the saying goes. So how are other countries reacting to the return of a brutally realist outlook in the White House? There are three groups to consider.

First, this has been an especially difficult year for US allies in Europe who see themselves as America’s traditional partners in upholding the liberal international order. Some European leaders, most notably German Chancellor Angela Merkel and, to a certain extent, French President Emmanuel Macron, have sought to pick up the baton of liberal leadership. A majority, including the British, are trying to look beyond the personality of the occupant of the White House and focus on sustaining the many other channels of transatlantic cooperation, including with the US Congress. Some European leaders, mostly but not all in political opposition, even welcome Trump’s ascendancy.

Wherever one stands on this spectrum, it is possible to argue that Trump has had a positive effect on Europe. Concerns over the US becoming a security insurance policy of last resort and Britain’s imminent withdrawal from the EU have forced serious steps towards higher defense spending and deeper EU defense integration. Europeans are also being drawn into a more serious debate about Iran’s destabilizing effects across the Middle East, rather than just focusing on the importance of protecting the JCPOA and hoping for the best after the plan’s expiry. They are ramping up their security relationships and presence in the Sahel, a region that matters greatly to Europe and less to the US. And the EU has completed its Economic Partnership Agreement with Japan and is seeking a mandate to begin free trade negotiations with Australia and New Zealand.

These initiatives will continue to face obstacles and expose the distinct priorities and sometimes divergent interests of EU member states. Many would prefer simply to turn inwards and focus on fixing themselves after the trials and tribulations of the European financial crisis. The White House’s nationalist discourse, actively promoted across Europe by its ideological champions and financial backers among the “alt-right” movement, could exacerbate those differences. But there is no doubt that Trump is having a catalyzing effect on efforts to create a more autonomous Europe in international affairs.

Stepping In: China and Russia

A second group to consider are America’s main challengers for leadership around the world: most prominently China and Russia. In many ways, they are the main beneficiaries at this stage of America’s withdrawal from global leadership.

President Xi has been quick to step into the leadership vacuum, from his pro-globalization speech a year ago in Davos to hosting a major international conference last May on the Belt and Road Initiative. With US domestic politics in turmoil following Trump’s election, and the same in Britain following the Brexit decision, China’s soft power among its neighbors and the wider world is rising by default. The Chinese are looking for ways to exploit their new-found influence, whether in UN bodies or on international debates such as over regulating the internet.

In the absence of a US strategy for the Middle East, Vladimir Putin has doubled down on his military intervention in Syria and is now deepening relations with Egypt and Saudi Arabia. He can also stir up European popular discontent in order to weaken the EU with no fear of US retaliation. And he takes every opportunity to demonstrate equivalence between Russia’s amorally self-interested approach to international affairs and that of the United States under Trump.

At the same time, however, America’s more selective engagement in regional conflicts will lessen the options for low-cost Russian interference. The case of Syria shows that if Russia wants to play a more active role in the Middle East, it will have to bear the financial, security, and reputational costs itself. The same can be said for China’s growing military presence in the South China Sea and its broader neighborhood. If China is now seen as Asia’s regional hegemon, this will create opportunities for the US to play the role of counter-weight, much as China has done while the US has been in the dominant position.

An Inevitable Adjustment

The third group of countries are those that lack the protection of a strong regional institution and that still depend individually on the United States for their security. They include countries that are part of the broader democratic “West,” like Japan and South Korea, as well as some non-democratic countries now experimenting with more representative forms of governance and more inclusive models of economic growth, like Saudi Arabia. They are the most vulnerable in this more barren international landscape, where US protection from dangerous neighbors is increasingly conditional as well as unpredictable.

Like the Europeans, these US allies are being forced to build up their defense capabilities and rely more on their own diplomatic agility, including by triangulating their foreign policy beyond the US to the world’s other major powers. This is a less safe geopolitical space for these countries to inhabit; the fate of their economic and physical security is tied as much to their leaders’ personal chemistry, or lack thereof, with President Trump as to America’s formal security commitments, whose credibility had already come into question during the Obama administration.

It was inevitable that this adjustment from a period of US global leadership would happen at some point, and it seems unlikely that there will be a return to the status quo. The net result is that no country in the world has the luxury any more to free-ride on what has become a decaying American hegemony.

Hinge points in 2018

When all is said and done, it will be healthy for allies to escape their over-dependency on the United States. Although poll numbers continue to fluctuate, much of America’s population has become at best more ambivalent and at worst increasingly resentful of playing such a costly leadership role on the international stage.

But if other countries must take greater responsibility for their futures, this will pose new challenges, some of which will come to bear in 2018.

First, negotiations over Britain’s departure from the EU must not fall into a “cliff-edge” Brexit, with no clear sense of what the country’s future relationship will be with the EU. This should be economically and geopolitically self-evident for the British, although it might not seem so by the quality of the domestic British debate. But nor can the EU afford to lose the UK into a “splendid isolation” off the edge of the European continent, while grappling at the same time with a more anti-EU United States. Finding a resolution to its relations with the UK is largely in the EU’s gift, whereas this is not the case with the US.

If the two sides can arrive at a compromise, the EU may evolve into the UK’s second special relationship. And the prospects for a more strategically autonomous Europe could improve, with the UK committed to the security of its European neighbors through NATO and more comfortable with its post-Brexit security relationship with the EU, and with its EU neighbors more willing to integrate their security capabilities through EU institutions without British obstructionism.

Learn To Do Without US Leadership

This will also be the year where other nations need to demonstrate that coalitions of the willing can drive positive change on issues of global importance, even without US leadership. The successful follow-on summit to the Paris climate change agreement that President Macron held in Paris in December 2017 has shown that leading governments, working in tandem with major multinational corporations and international NGOs, can on occasion mobilize political and public action towards shared goals in the absence of US leadership.

On a more negative note, there is a high risk that US efforts to re-negotiate aspects of its key trading relationships, whether with Canada and Mexico in NAFTA or with China, will fail in 2018. With Congressional mid-term elections due in November, President Trump will be tempted to take unilateral action to demonstrate to his political base the seriousness of his intent to re-draw America’s terms of trade with some of its major partners. The EU, Japan, China, and others will have to work hard either to avoid this outcome or demonstrate that they can hold meaningful plurilateral and bilateral trade negotiations without US engagement.

The other wild card for 2018, of course, will remain North Korea. Here, there is no escaping the centrality of the US in any solution or, at least, the avoidance of a major escalation. But it would be far healthier in the future if the US administration could focus on critical questions of this sort, rather than having to apply its diplomatic time and capital simultaneously towards multiple other stand-offs where regional actors could play more constructive roles.

In the end, the rest of the world cannot and should not wait for the US to keep the world safe. Each country, each actor of scale–nationally, regionally, internationally–needs to step up to its own set of responsibilities as a beneficial stakeholder in the current system of international prosperity and relative stability that America has played such a central role in building.

The post A Dangerous New Normal appeared first on Berlin Policy Journal - Blog.

© REUTERS/Tobias Schwarz

On June 15, the US Senate approved an act to sharply expand sanctions imposed on Russia in retaliation for its intervention in eastern Ukraine and annexation of Crimea in 2014. The broadly bi-partisan move that enshrined Barack Obama’s earlier executive orders – intended as a response to Moscow’s alleged cyber interference in US elections – was a stunning rebuke to US President Donald Trump’s Russia policy, essentially taking a broad swath of foreign policy out of his hands.

In light of Trump’s stance toward Germany, the EU, and NATO, one might have expected a gigantic sigh of relief from Berlin. But this was not to be. Foreign Minister Sigmar Gabriel reacted with immediate indignation to a provision of the bill that would allow the US to target companies cooperating in the Russian-German Nord Stream 2 (NS2) gas pipeline project. A joint declaration with his NS2 partner, Austrian Chancellor Christian Kern, invoked a sort of euro-populism: “Europe’s energy supply is a matter for Europe, not the United States of America … Instruments for political sanctions should not be tied to economic interests.” The irony of citing such a principle in defense of NS2, considering Putin and Gazprom’s labyrinthine record of political and economic pressures on Ukraine, appears to have eluded the pair.

Gabriel’s stance was echoed in an exceptionally stern statement from Chancellor Angela Merkel. Her comments, too, focused exclusively on NS2, ignoring the two key measures the Senate had added to existing sanctions. One would block partnerships with Russian firms anywhere in the world that provide Russia with the next-generation oil and gas technology it so urgently needs to sustain its hydrocarbon state, while the other, even more sweeping measure would actively block cooperation with Russian arms sales globally. Clearly, NS2-targeted sanctions are of lesser significance.

Restraining the Executive

What is perhaps most striking about the comments from Germany is that nothing affirmative was said about the Senate’s motives or rationale. Granted, Gabriel and Merkel – whose parties currently form a grand coalition, but will be battling it out in a September election – are in campaign mode, but this does not fundamentally explain the reasons for their focus on NS2. The explicit motivation of the Senate’s bill flows directly from what former FBI Director James Comey underlined as the “central message” of his June 8 Senate testimony: that he and the directors of all US intelligence agencies were unanimous in their assessment that the Russian government had conducted a cyber campaign against US elections. In fact, as later reported by The Washington Post, US “intelligence captured Putin’s specific instructions” on the operation’s objectives to discredit the election and defeat Democratic candidate Hillary Clinton.

This determination is of acute interest to the German government. In the run-up to the German election, one might think expressions of solidarity with the Senate’s intent would accompany the NS2 complaints. So too, a section of the Senate’s bill explicitly asserts US commitment to Article 5 of the NATO Treaty, an assurance Trump so disturbingly refused to give to Germany and other member states during a recent summit. The Senate also “set up a process by which Congress can block any attempt by President Trump to scale back those sanctions” – another stunning rebuke to Trump, a man who campaigned on his ability to “do deals” with Putin, who immediately moved to lift sanctions against Russia when he assumed office, and now has several members of staff under FBI investigation for suspicious dealings with Moscow.

Of course, such legislation is a blunt foreign policy instrument of the legislative branch in restraint of the executive. However, if the act now passes the House of Representatives it will essentially revoke Trump’s ability to set Russia and Ukraine policy. One would normally imagine such a development to be warmly welcomed by both Gabriel and Merkel. But appreciation of this point was absent in their initial, highly-publicized responses.

Geopolitical Rationale

Indeed, the Senate’s bill could severely sanction German, Austrian, and the other European firms working with Russian energy giant Gazprom on the pipeline project. NS2 is slated to bring an additional 55 billion cubic meters of Russian gas from arctic western Siberia to Germany each year. It purposefully avoids landfall in any Baltic, Eastern or Central European state of the former Soviet Union and the Warsaw Pact, running parallel to the Nord Stream pipeline completed in 2011. NS2 has been championed by Gabriel and former Social Democrat (SPD) Chancellor Gerhard Schröder and enjoys wide support among German elites and energy companies. Gabriel and Merkel’s responses reflect this.

For Russia, the geopolitical rationale is clear. In the final two decades of the Soviet Union, Moscow had fought for its gas to be accepted in Europe as a secure and reliable source of energy. This resulted in huge gas-transit pipeline systems across Poland, Ukraine, and other countries. However, the fall of the Soviet Union resulted in the separation of Russia from its Eastern and Central European neighbors; the latter mostly opted to join NATO and/or the EU as the West had hoped. The dominant geopolitical school of thought in Washington and the EU – as well as most former Soviet satellite states anxious for a lasting divorce from Russia – was that, if Russia were also to reform as a liberal democracy and re-industrialize, it should not have any major problem with this. But, if it did, it would be limited to a rump of its former territory incapable of regaining superpower status.

As it turns out, market reforms and liberal democracy did not take root. Russian President Vladimir Putin has repeatedly failed to re-industrialize on a modern basis. He sees the prospect of a rump, isolated, hydrocarbon-export-dependent Russia looming large. Since about 2006 – underlined by his 2007 Munich Security Conference rebuke to what he sees as an encroaching, US-dominated unipolar world – his strategy has been, at minimum, to wreck any further incorporation of Eastern and Central European states into the EU and NATO and, if possible, disrupt or even return some to Russia’s orbit. This is a rational and reasonably achievable strategy, albeit a dangerous and retrograde one.

Turning to Russia’s gas export business with western Europe, the following assertions can be made: First, it is clear that Putin can at present interfere to only a limited extent in major gas transit states such as Poland and Ukraine while he depends on their willingness to transit Russian gas to Western Europe. Second, insofar as these states remain antagonistic toward Russia, Gazprom exports across their territories are vulnerable to government actions and radical elements within their populations. If a way to bypass these states could be found, Russian gas business with Western Europe would be ensured, and the present-day transit states could be subjected to heightened disruption and perhaps even re-incorporated into Russia’s orbit.

The result, in broad terms, is the Kremlin’s strategy to replace existing pipelines transiting the former Soviet bloc with two huge pipeline systems – one extending south through Turkey and into EU states via the Aegean Sea (i.e., the Southern Stream pipeline system) and another arriving into western Europe from the north, via the Baltic Sea (i.e., the Nord Stream pipelines). New liquid natural gas (LNG) shipments will also be added, initially from Russia’s arctic Yamal peninsula, insofar as the necessary technology can be accessed. Notably, the new US sanctions will strike all parts of this geopolitically motivated gas export strategy. Especially in the case of Nord Stream and NS2, the geopolitical motivation is clear, as while there are commercial advantages to the route, the multibillion-dollar projects deliver gas originating from the same fields as Ukraine’s gas currently does, and the Ukraine system has considerably more capacity.

Change through Trade

Germany is and has always been seen as a stalwart of the EU project and of the establishment of liberal democracies based on open and free markets. What would its rationale be for cooperating with Gazprom and Putin in bypassing Ukraine and later possibly Poland and other Russian gas transit states?

There are two important elements to consider. First, the Neue Ostpolitik initiated by Chancellor Willy Brandt in the 1960s always favored direct economic ties between Germany and Russia, especially through large-scale energy projects between big West German corporations and Soviet state monopolies. This policy aimed to defuse Cold War tensions and foster liberal-democratic transition in Russia. While this strategy did contribute to détente and Russian approval of German reunification, Russia’s continued failure to establish free market and liberal-democratic norms and its flagrant violation of respecting European borders by invading Ukraine and annexing Crimea have dealt severe blows to the strategy’s fundamental logic. Though the mantra that peaceful relations are historically guaranteed by deep trade and economic ties is still constantly repeated by German elites, one finds quite broadly that the younger generations are more sanguine toward the real threat posed by an economically and politically unreformed, increasingly autocratic Russia.

This brings us to the second key element. There is good reason to assume that, had Germany and the Western European states succeeded in rapidly fostering free market reforms and liberal democracy, and had they been able to incorporate states such as Georgia and Ukraine into the EU and NATO, German policy might now be quite different in the face of Putin’s revanchist Russia. However, over the past several years, even before the Maidan uprising in Ukraine, it was becoming clear that German elites were broadly losing confidence in the ability of Ukraine – as well as many other Eastern and Central European states – to reform, including some already within the EU and NATO. This is not exclusive to Germany: a similar transformation has been evident in Brussels, where stabilization has explicitly replaced transformation in its policy toward the EU’s eastern and southern neighbors. At the same time, Putin deeply impressed German elites using hard power – including armed interventions in Georgia, the North Caucuses, and Ukraine – and showing his willingness to risk economic and energy stability by interrupting gas flows to Germany and Western European states via Ukraine, all clearly with geopolitical intent. These gas cutoffs were particularly alarming in that they reduced or cut deliveries to Germany and other EU and European states and had the potential to open fissures between member states scrambling for gas in a crisis.

Though in principle Russian gas dependency could and is being reduced by diversifying imports arriving via pipelines from Norway and Algeria and LNG deliveries from Qatar, the US, and elsewhere, Russia will remain a significant, if not the major gas supplier. As there is is no way to break dependence on Russian gas via pipelines for many years, vulnerabilities had to be minimized.

Energy Security über Alles

German elites have become increasingly inclined to reduce the energy security risk to Germany, the EU, and its eastern neighbors from what is seen as Ukraine’s incorrigible energy sector corruption and a Russian-Ukrainian conflict that will not end for many years. The solution: eliminate its own and its EU allies’ dependence on Ukrainian transit by taking over the business itself. While this looks like a mere extension of the Neue Ostpolitik – and indeed, the long-time ideological, political, and business culture of cooperation with Russia as a German national strategy – facilitates today’s new geopolitical turn. Nevertheless, this Neue Neue Ostpolitik is responding to a new situation for the European project and German national interests, while facing new Russian contestation.

Although there are significant numbers of German citizens, lower-ranking party members, and some major politicians who oppose the NS2 project, the reality – as reflected in Merkel and Gabriel’s condemnations of the new US sanctions bill – is that there is overwhelming support for NS2 from the country’s business and political elite. Whether consciously or not, this reflects a new geopolitical role for Germany with respect to Russia and the European project, one aiming to make it an indispensable middleman in energy matters.

Completion of NS2 will ensure that the vast bulk of Russian gas imports to Europe will arrive directly to Germany. As numerous retired and active German diplomats, officials, and energy sector executives have asserted to me in recent years, “the Russians have always been our reliable energy partners” and “will not mess with us.” When the issue of Germany giving up its highly valuable soft-power influence in Eastern and Central European states where this policy is immediately seen as abandonment in the face of new Russian pressures, the German response is simply, “We will distribute the gas!” and, “Don’t they trust us to sell it to them?” It is asserted that Germany taking direct delivery of virtually all Russian gas and reselling it to them is their only path to true energy security.

This can be spun two ways, either as realist or paternalist – in either case the geopolitical and energy security result is identical. This is not to say Berlin does not recognize there are risks in its continued dependence on an unreformed, corrupt, and likely increasingly unstable Russian state for gas supplies, even if those supplies no longer pass through Ukraine, Poland, and the like. However, the key difference from where Berlin sits is that in any future gas dispute with Russia, Germany will now be alone at the table facing its Gazprom and Kremlin partners, without the complications of Ukrainians (or perhaps Poles) engaged in heated struggles with Russia as a part of the process.

Germany as Guarantor

It is wrong to cynically reduce these matters to business considerations and the profits that German and other companies will clearly reap at the expense of ending Ukraine’s gas transit business. Even for a so-called geo-economic power such as Germany, the geopolitical component is crucial, without which the NS2 project might very well not have advanced. European energy unity and security will not be completely ensured by the fact that virtually all Russian-imported gas will at some point be distributed from a German hub. Rather, one could say that Germany is “solving” the problem of gas security in Europe vis-à-vis Russia by employing a strategy analogous to the one the US used to “solve” the problem of the 1970s OPEC nationalizations and instability in the Gulf Region: by putting itself at the center of the oil system, as its guarantor. As a German energy executive told me recently, “You [Americans] have your Saudi SOBs, and we have our Putin.”

This implies the establishment of a form of German hegemonic oversight in the European gas market, just as the global oil system has been subjected to a form of US hegemony globally. If there was confidence in Ukraine and other crucial Eastern and Central European states to actively reform and become economic, political, and perhaps military obstacles to Putin’s geopolitical aims, Germany might decide to ensure that the Ukrainians are treated properly by Gazprom and Russia and continue to rely on gas transiting Europe. Any such confidence has disappeared, however, and Germany is not prepared to use force to enforce, for example, Ukraine’s territorial integrity.

Not everyone liked it when, in ancient times, all European roads led to Rome, but they were good roads that guaranteed commerce, and there were no alternatives. This is not unlike the present German attitude toward resolving problems presented by European and its own gas security. The US Senate, however, does not agree that it is time to give up on Ukrainian gas transit because it is not time to give up on these states generally in the face of Moscow’s pressures. The US is also much more inclined to resort to military power to curtail Russia’s actions. It would clearly prefer Germany (and the EU in general) to continue to push for transformation and incorporation of its eastern and southern neighbors. In this, Trump’s stance remains decidedly a minority opinion among US elites.

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