How stable is the US-China relationship? - Ian Bremer (GZero Daily)

 How stable is the US-China relationship?

Ian Bremer

GZero Daily, April 11, 2024

   

The most geopolitically important relationship in the world is fundamentally adversarial and devoid of trust. Its long-term trajectory remains negative, with no prospect of substantial improvement.

And yet, ever since US President Joe Biden and Chinese President Xi Jinping met at the Asia-Pacific Economic Cooperation summit in Woodside, Calif., last November, US-China relations have looked comparatively stable amid a sea of chaos.

In the months that have followed, both sides have continued to seek steadier ties through frequent high-level engagement as well as new dialogue channels on a wide range of policy areas. In January, the US and China resumed military-to-military talks for the first time in nearly two years. On April 2, Biden and Xi spoke by telephone and ratified their ongoing commitment to manage tensions. The presidential call came after the third in-person meeting between US National Security Adviser Jake Sullivan and Chinese Foreign Minister Wang Yi in less than a year on Jan. 16-17. It set the stage for US Treasury Secretary Janet Yellen’s trip to China this past week – where she met with senior Chinese officials, local and provincial leaders, and top economists – as well as US Secretary of State Antony Blinken's upcoming visit. Both militaries are currently in the final stages of preparation for a maritime dialogue and a likely ministerial meeting at the Shangri-La Dialogue in June.

However, while better managed than they have been historically, US-China relations are coming under stress from a number of flashpoints that threaten to disrupt the relative calm that has prevailed since Woodside.

Second Thomas Shoal. This is the most likely, imminent, and dangerous tripwire for US-China military conflict, following an incident on March 23 in which Chinese Coast Guard ships fired high-pressure water cannons on a Philippine vessel attempting to deliver construction materials to the rusting BRP Sierra Madre – a symbolic Philippine warship, home to a small detachment of Philippine marines, that was intentionally grounded by Manila in the South China Sea’s Second Thomas Shoal in 1999 to assert Philippine sovereignty over the disputed territory.

Beijing refuses to allow any construction materials to reach the Sierra Madre, and Philippine President Ferdinand Marcos feels he must continue sending materials to prevent it from sinking lest he renounce Manila’s claim. The latest run-in injured several Filipino sailors but stopped short of causing fatalities. US defense officials believe that if a Philippine sailor were to get killed, Manila would invoke its Mutual Defense Treaty with Washington, prompting the US to send military escorts for Philippine resupply ships. Chinese contacts say that if that happened, Beijing would consider towing the Sierra Madre off the reef, setting up a showdown between the US and Chinese navies.

Tech competition. Xi views Washington’s ever-expanding restrictions on China’s advanced semiconductor and artificial intelligence industries – and its pressure on US allies like Japan, the Netherlands, Germany, and South Korea to follow suit – as an effort to curb his country’s technological and economic development. More than ordinary trade barriers, tech restrictions get under Xi’s skin because they hit at the heart of his strategy to shift the sources of Chinese growth away from real estate and infrastructure investment toward “new productive forces.” Insofar as the US containment policy persists – and it will, as it is driven by a bipartisan national security consensus to “de-risk” – Beijing will eventually be compelled to retaliate.

Trade. A sticking point for labor unions in an election year, Chinese industrial “overcapacity” was a central theme of both Biden’s call with Xi and Yellen’s China trip. Washington’s core contention is that China accounts for a third of global production but only a sixth of global consumption. As a result, China’s heavily subsidized (or outright state-owned) firms are flooding Western and global markets with low-cost goods, especially in key sectors such as electric vehicles (EVs), batteries, and solar photovoltaics, benefiting consumers worldwide through lower prices – and reducing emissions by increasing the adoption of renewables – but hurting the less competitive American manufacturers.

American accusations ring hollow in Beijing when the US is simultaneously granting TSMC, the world’s leading producer of semiconductors, billions of dollars in subsidies to expand chip manufacturing in America. Separate but related, the irony of the US (and Europe) complaining about China making the global energy transition cheaper while at the same time chastising the country for not doing enough to decarbonize their economy is not lost on the Chinese and many in the global South. But I digress.

From Washington’s perspective, overcapacity is a problem at the core of China’s industrial policy model that will be made worse by Xi's aversion to boosting domestic consumption. Given the election-year politics of the issue for Democrats, at least some market access barriers before November are likely – whether through the Section 301 review of China’s steel industry, the Chinese EV data security probe, and/or the likely realignment of Trump-era tariffs on EVs and other imports. Still, anything Biden might do on trade pales in comparison to the risk of major tariff escalation that Beijing will face if Donald Trump returns to the White House.

Taiwan. China’s leadership has concluded that Taiwanese President-elect William Lai is an irredeemable separatist, and Lai sees little upside in trying to persuade Beijing otherwise. Xi’s embrace of Lai’s Kuomintang predecessor, Ma Ying-jeou, in a high-profile meeting on April 8 didn’t help defuse tensions. Lai’s inaugural address on May 20 will accordingly set the stage for a gradual erosion of cross-strait ties over the next four years. The pressure will start as soon as this summer when China begins to regularly enter Taiwan’s contiguous zone, “erasing” the island’s territorial waters and airspace. While these moves will be calibrated and telegraphed to Washington through backchannels to limit retaliation, Lai could escalate and force Biden to respond with a show of resolve in support for Taipei that risks a dangerous cycle of escalation.

But while these irritants will strain the bilateral relationship, there are still plenty of reasons for both leaders to want to maintain relatively stable ties, at least through the US elections.

Biden can’t afford to start a new war when he’s already managing two abroad – one in Ukraine, one in the Middle East – and fighting another at home. Xi continues to face major domestic economic challenges that require him to be much more geopolitically cautious than he would otherwise. Tensions are further constrained from spiraling out of control by enduring interdependence between the world’s two largest economies, neither of which would benefit from faster decoupling let alone military conflict.

Of course, as we saw both in 2022 with former House Speaker Nancy Pelosi’s visit to Taiwan and in 2023 with the Chinese surveillance balloon incident, accidents and miscalculations can easily overwhelm leaders’ ability to manage the tensions. But the communications channels established since November make such flare-ups less likely.

Neither the US nor China want a free-fall in their relationship this year, and thanks to Woodside, they now have the tools to avoid one. The Woodside truce may bend, but it won’t break.

A China vai trazer a paz à Ucrânia? - Ian Bremer (GZero)

 Will China end Russia’s war?

   Xi Jinping

Ian Bremer

GZero Daily, July 24, 2023

China can end the war in Ukraine. Xi Jinping is the one major world leader that both Russia’s Vladimir Putin and Ukraine’s Volodymyr Zelensky would gladly meet with. And China is the one country that has both the carrots and the sticks that can persuade Putin and Zelensky to accept the tough-to-swallow compromises needed to make peace. 

China has leverage with Russia. Europe’s post-invasion refusal to buy Russian oil and gas sharply increases China’s importance as an energy buyer. In fact, China bought a record amount of Russian energy over the first half of this year, thanks in large part to the steeply discounted price the war has forced Russia to offer.

But China has more energy suppliers than Russia has alternative high-volume buyers. A Chinese decision to reduce those imports would hurt Russia far more than China. China is also a major supplier of computer chips and other products Russia badly needs and can’t buy elsewhere. These facts give Xi real leverage with Putin if he wants to use it. 

Xi can tell his friend Putin that he must accept a peace deal that brings Russia a modest amount of Ukrainian land that he can use to declare “victory” in return for letting the rest of Ukraine go. Even if that means the remainder of Ukraine one day joins NATO and the EU. 

Putin, of course, will oppose any such suggestion. But if Xi privately advises his friend that refusal means China will publicly distance itself from Russia’s invasion and apply heavy economic pressure on his government, Putin will have to listen. With China on board, Putin looks much more powerful. Were Xi to publicly back away, Putin would be far more isolated. 

Xi can then promise that a peace deal with Ukraine will bring China and Russia economically and politically closer than ever before … and that China will pay to rebuild and modernize Russia’s war-depleted military. 

From Xi’s point of view, pushing Putin toward peace isn’t a betrayal. It’s a credible plan to save Russia from a disastrous war before much more damage is done. He’s giving Putin the “off ramp” the Russian president can’t (or won’t) create for himself. 

And if Putin isn’t ready to cut this deal now, wait through a few more months of military frustration with continuing Western support for Ukraine. 

China has leverage with Ukraine. Xi can assure Zelensky that if Ukraine will make the hard choice to surrender the Donbas region and Crimea, that China can stop the war, invest billions in the country’s reconstruction, and free Ukraine to join Western clubs. (Let Ukraine and the West argue over when and how.)

Ukraine gets peace, a European security guarantee, underwritten by Chinese infrastructure investment, and a new lease on life as an independent nation with powerful friends and allies. 

Xi can use this plan to divide Europe from the United States, an outcome that expands China’s global influence. Most European leaders would surely cheer an end to the war and reconstruction of Ukraine that Europe doesn’t have to pay for. 

US officials would not look happily on China’s ability to make new friends and extend its influence in Europe, but Washington would be hard-pressed to block a peace plan that everyone else favors. 

China can use this plan to enhance its reputation as a leader and peacemaker around the world.The Americans could not have made this deal, Xi can fairly claim. Only China has the power and the will to stop this terrible war, ending the pressure the war creates on food and energy supplies and prices for poor countries and stopping the killing of innocents. 

That’s a huge propaganda win for Beijing. At a time of frustratingly slow economic growth at home, Xi can use that win. 

Xi has already shown he wants to play peacemaker. He brokered a minor deal between Saudi Arabia and Iran this spring, and he has already offered a sketch of a Ukraine peace plan, though its current form lacks the detail needed to make it credible. Xi has even been understanding in response to a Russian strike on Ukrainian cities last week that destroyed a facility that contained grain reportedly destined for export to China and damaged a Chinese consulate building. 

Obviously, as with any plan to end a war, several hundred devils lurk in the details. But Xi has real leverage, even with Putin, if he wants to use it. What’s stopping him?

Xi visit to Putin and war against Ukraine: Carlos Santamaria, Ian Bremer (GZero newsletter)

O mais importante dessa visita de Xi Jinping a Vladimir Putin nem é tanto a guerra de agressão da Rússia contra a Ucrânia, mas a consolidação desse projeto de "nova ordem mundial", com a sedução do fantasmagórico Sul Global para esse objetivo. Entre os iludidos pode estar o Brasil de Lula 3.

Paulo Roberto de Almeida

Xi’s “peace” plan for Ukraine: China “wins”

GZero newsletter, March 20, 2023

Carlos Santamaria

GZERO World

When Xi Jinping, on his first trip to Moscow since Russia invaded Ukraine, continues his meetings with Vladimir Putin on Tuesday, expect China's leader to talk a big game on "peace." It won’t be the type of peace that Ukraine — or the West — wants.

Yet, as far as Beijing is concerned, that’s beside the point.

Indeed, geopolitical success is in the eye of the beholder. That was definitely the case in the recent Middle East détente brokered by China, which re-established Iran-Saudi diplomatic ties broken since 2016. For Xi, whether the deal will result in anything meaningful in the long run matters less than clinching the photo-op.

The upshot is to be perceived as the decisive external player that achieved what America could not by getting the Iranians and Saudis to at least be on speaking terms again.

Similarly, this approach also means spinning the optics of its newfound role as a global peacemaker to a huge yet often overlooked audience by the US and its allies: the so-called "Global South" group of countries. Although only a few dozen refused to condemn the invasion at the UN, many more nations have no beef with Russia or Ukraine and have spent over a year waiting for someone to come up with a plan to end a war that they're paying for with economic ruin.

China's recent peace initiatives are thus "in line with aspirations by the silent majority in the rest of the world — countries that are not directly involved in conflicts" in Europe or the Middle East, says Zha Daojiong, a professor at Peking University's School of International Studies.

But that’s only part of a story that’s also about China’s broader role in the world, including its “complicated” relationship with Russia, its existential rivalry with America, and its year-long ghosting of Ukraine.

First, though, why has it taken Beijing so long to start playing global peacemaker? For one thing, until recently it was bad political timing at home.

Xi "was too busy putting out fires domestically at a crucial time for China and himself," says Brian Wong, a geopolitical strategist and co-founder of the Oxford Political Review. With the 20th Communist Party Congress and zero-COVID over, Xi feels he can pay more attention to foreign policy.

For another, China perhaps saw brokering the Iran-Saudi deal as low-hanging fruit that could serve as a dry run for its much more ambitious peace initiative in Ukraine. Wong believes that China seized the moment by leveraging Saudi Crown Prince Mohammed bin Salman's deep hatred of US President Joe Biden along with Beijing’s longstanding ties with Tehran to offer a Middle Eastern olive branch that few saw coming.

The Iran-Saudi deal had clear tangible benefits for China in the form of stable oil prices. What Xi would get from sealing peace in Ukraine is more symbolic but no less important: rehabilitate China's global image tarnished by COVID.

Meanwhile, China’s recent global diplomacy overtures are both strategic and tactical. After all, Xi has long wanted China to have a bigger role in the world. (He once pitched his country as the globalist leader countering an isolationist US under the Trump administration.) But the pandemic put all of that on the back burner.

Now, though, "China has sort of said: Okay, we're done with COVID. We are reengaging with the world. We're sending our leader back out there," explains Neysun Mahboubi, a research scholar at the University of Pennsylvania's Center for the Study of Contemporary China.

In that regard, he adds, China's strategy is not new. Yet, it comes across in a sharper way than it would have in 2019 because the geopolitical landscape has become more polarized — in no small part due to what China watchers refer to as Beijing’s “pro-Russia neutrality.”

At the same time, Mahboubi thinks the recent China-led peace initiatives are also a tactical response to the growing US-China rivalry. Xi, he believes, feels pressured by America to show that "China is a player on the world stage that can act in ways that the US cannot entirely anticipate or control."

And then there's Russia, China's rather unpredictable friend with benefits. The war in Ukraine — which initially caught Xi flat-footed — tested the limits of the bilateral partnership. But a year on, it has brought the two countries closer together by making them more dependent on each other (especially Russia on Chinese imports). 

Beijing and Moscow have been forced to team up to push back together against the Western unity that the Russian invasion accomplished. And although the good personal vibes between Xi and Putin certainly help, the main driver is the mutual conviction that the US-led global security alliance is an existential threat to Russia and China.

"The closer America and Europe move towards one another, at least in the eyes of China, the more incentive there is on the part of China to want to absorb Russia into its orbit," says Wong.

Still, by pursuing peace in Ukraine, China might bite off more than it can chew. For Mahboubi, “the degree of difficulty is not even in the same ballpark” as the Iran-Saudi accord.

First, Beijing can hardly claim to be an honest broker — as it could between the Iranian and the Saudis — because it has provided diplomatic cover for Russia at the expense of Ukraine. Second, China's 12-point plan is a nonstarter for NATO since it doesn't call for Russia to withdraw from any occupied territories (which would have been a red line for Putin anyway).

Third, the two sides have little incentive to back down in the short term. Russia and China have high hopes for cracks in Western unity against the Kremlin widening in the coming months. Ukraine, for its part, is gearing up for its much-touted spring counteroffensive.

Still, if China is somehow able to figure that out and offer something that is acceptable to both sides, "that would obviously be incredibly impressive [...] and China would deserve all the plaudits," Mahboubi says. "I just think it's unlikely."

Also, what about dealing with Ukraine, which has been an afterthought for China? This week, Xi has reportedlyscheduled a call with President Volodymyr Zelensky, which would be his first since the war began.

The thing is, Xi knows that Zelensky can't afford not to pick up the phone because only China has enough leverage over Russia to get Putin to back down. Indeed, Zelensky has been careful to avoid publicly criticizing China, has repeatedly asked China to get involved and said that he's open to Chinese support.

"I think Ukraine and Zelensky are more receptive toward China than many of us expect," says Wong. All these public statements are "a clear sign that the Ukrainians [...] genuinely want Chinese assistance because they see China as the only possible mediator."

Finally, Chinese success would box in the US — and possibly create a rift in Europe. If the Europeans suspected America was sabotaging the peace talks by urging Ukraine not to talk to Russia via China, the hand-wringing in Paris and Berlin could have real consequences for NATO unity.

At the end of the day, one unique thing China can offer as a mediator is an uber-pragmatic assessment: Let's not cry over spilled milk.

China "would urge Russia and Ukraine to consider leaving aside the question of who wronged whom for the moment — leave it to the future generations of their peoples — and give priority to stopping the conflict, which is debilitating to both sides," says Zha.

The upshot: Put yourself in China's shoes. No one believes you can broker peace in Ukraine, so no one will be surprised if you can't pull it off. But if you do, you can claim all the credit — and blame others if things go south.

Unlike with arming Russia, there’s no downside to playing peacemaker. Whatever happens, China can't lose. But how it ultimately wins might determine the trajectory and outcome of the war.

Xi & "friend" Putin could call for Ukraine ceasefire

March 20, 2023

GZERO Staff

Ian Bremmer's Quick Take:

The big story geopolitically is Xi Jinping's trip to Moscow, a three-day state visit, by far the most geopolitically significant summit of the year since the Russian invasion, frankly, a year ago. And also a deeply problematic geopolitical summit, in the sense that it goes strongly against the interests of the United States and all of its allies. Let's keep in mind this summit comes on the back of the International Criminal Court, that is recognized by 123 countries around the world, though not by Russia, the U.S. or China, declaring that Putin is a war criminal and that he should be arrested by any member state if he travels there. Indeed, the German government's already announced, if Putin were to go to Germany, that's it, they're arresting him. Never going to happen. But nonetheless, on the back of that, and then Putin's trip to Crimea and his trip to Mariupol occupied Ukrainian territory over this weekend. Mariupol, first time, he's been in territory the Russians have taken since February 24th.

All of that obviously told to Xi Jinping before the trip was being made. And now, you see these two men, these two authoritarian leaders side-by-side on a global stage. And by far, the friendliest meetup they have had, since February 4th, a year ago when Putin made that trip to Beijing during the Olympics, and they declared that they were friends without global limits. This is very different from what we saw from Putin and Xi Jinping the last time they met in-person back in September. That was in Samarkand. It was the Shanghai Cooperation Organization summit. That was where Putin was on the back foot, he had lost a fair amount of territory from a Ukrainian counteroffensive. His military was underperforming. And indeed, Putin had to publicly recognize that the Chinese had concerns about the Russian War in Ukraine. He's not recognizing that right now.

In fact, what Putin and Xi Jinping are talking about is an opening of negotiations with the Ukrainians, that the Ukrainians are not prepared to accept the potential of a ceasefire on Ukraine, which would allow the Russians to keep the territory they've occupied right now, which the Ukrainians, of course, would not accept.

This is Putin feeling much more comfortable about his geopolitical alignment, at least as far as China is concerned. And that's his most important, most powerful friend on the global stage. Why is that happening right now? Well, number one, it's a bookend to what happened just a couple of weeks ago when Xi Jinping in Beijing was an unprecedented fashion, making comments against the United States, saying that, "Confrontation would come if the U.S. maintained its position of attempting to contain China." We've not seen Xi Jinping call out the Americans directly like that, since he came to office for the first time a decade ago. So he's unhappy with his role vis-a-vis China. That was particularly true when the Americans came out publicly with intelligence that showed that the Chinese were negotiating to provide direct military equipment to Russia, the U.S., the UK and NATO all publicly disclosing that information and warning the Chinese that sanctions would, come direct sanctions if they were to proceed with it.

In other words, exactly the way the Americans treated the Russians with the intelligence they had before the invasion into Ukraine. The Russians denied that invasion. The Chinese denied that they were sending any weapons to Russia. The intelligence seems very hard from what I've heard from a number of actors that have seen it. The point is that the Chinese really didn't like being treated the same way that the Americans were treating the Russians. Of course, in part, that's driving them into a more public relationship with Putin that is warmer and friendlier. At the same time, China also sees, believes that time is increasingly on Russia's side. They don't want their friends, the Russians, to lose this war, but they also see divisions, especially in the United States with Republicans trying to run for the presidency. People like Trump, in particular, but also to a degree, DeSantis and others that are trying to caution against the level of support the Americans are presently providing to Ukraine. And something that the Chinese, of course, would like to see the back of.

So for all of these reasons, this Xi Jinping visit to Russia is a very big deal. I don't believe that the Chinese will actually start providing weapons to the Russians, at least not unless the Russians start performing very, very badly indeed on the ground. So, we'll watch and see how the counteroffensive goes in the coming weeks. I expect the Ukrainians will grab at least some ground, because the issue of the artillery that they've desperately needed, the ammunition appears to have been resolved by the United States and its allies. That should allow the Ukrainians to start a significant counteroffensive in coming weeks. But it also means they need to take a lot of territory back, because otherwise the potential that U.S. support will start to weaken as we get towards 2024, that the US will be more divided and the Europeans will become more divided on the back of that.

That is a big concern, indeed. Now, the big question for the next 24 hours is, will China directly call for a ceasefire and will the Russians support that? I think it is possible. Let's keep in mind that Xi Jinping and Putin are not constrained by checks and balances, by separation of power, by rule of law, which doesn't exist in their country. So if Putin, Xi Jinping individually decide that's what they want to say, they can and they will. The Ukrainians, of course, will have a very hard time with that. They'd have a hard time with calling for negotiations. Let's also keep in mind that while Xi Jinping has a three-day state visit to Russia, they have not yet announced a date for even a phone call, a video call with the Ukrainian President, Zelensky. So while Ukraine is being careful in what he's saying about the Chinese publicly, he absolutely knows that China is playing ball here for the Russians. There is no honest broker, in terms of China's interests in bringing this war to a close.

So Ukraine's in a bit more of a challenging position today, than they were a week ago. Russia certainly feeling stronger than they were a week ago. China feeling on the back of this peace breakthrough that they have resolved with the Saudis and the Iranians, that the Americans were no part of. Now, Xi Jinping is in Moscow, not the message that if you are a NATO country, you want to be seeing coming out of the Kremlin right now.

• What We’re Watching: Putin meets Xi, US takes out ISIS leader, Costa Rica votes ›
• Kevin Rudd: Xi thinks Putin is a "dummy" ›
• Xi Jinping & Vladimir Putin: No trust among autocrats ›
• China-Russia relationship status: It’s complicated ›

O chefe dos mercenários de Putin, o "dono" do Grupo Wagner - Ian Bremer (Zero Signal Newsletter)

 A dangerous game for “Putin’s Chef”

   

In November, we profiled the uber-controversial Russian mercenary chieftain, Yevgeny Prigozhin, a man once determined to remain in the shadows who, since Russia invaded Ukraine, seems eager to become the war’s most famous man. 

Who is this guy? In the Soviet Union’s dying days, Prigozhin spent nine years in prison on robbery and fraud charges, and after his release, he opened a profitable hot dog stand in St. Petersburg. His business then expanded into catering, which allowed Prigozhin to meet wealthy and well-connected people for whom he could do (possibly criminal and highly dangerous) favors. He was eventually introduced to Vladimir Putin – earning the nickname “Putin’s chef” – who rewarded Prigozhin’s loyalty with Kremlin catering contracts. 

In 2014, the enterprising Prigozhin spotted an opportunity to move full-time into the business of violence by forming the Wagner Group, a private militia named after Hitler’s favorite composer. In 2016, profits from Wagner and other projects helped him form a troll farm to try to manipulate US public opinion via cyberspace ahead of US elections, bringing him a higher level of scrutiny from US law enforcement. 

But it’s the Wagner Group’s role in Ukraine that has brought him to a new level of prominence – and now leaves him in a potentially precarious position with the Kremlin. Prigozhin has repeatedly claimed that Wagner, which he owns, is responsible for important battlefield advances while the Russian Defense Ministry remains embarrassingly and dangerously incompetent. 

That he feels free to make these comments and hasn’t yet been punished by the Kremlin suggests Prigozhin has some degree of protection from Putin or someone close to him. But how long is his leash? Tatiana Stanovaya, writing for the Carnegie Endowment for International Peace, warns that “Prigozhin is still only acting as a private individual. His relationship with the state is informal, and therefore fragile, and could end without warning.” 

The Institute for the Study of War, a Washington-based military think tank, has reported that Prigozhin appears to have overplayed his hand in recent weeks. The Kremlin, according to ISW, is “continuing to dim Prigozhin’s star by depriving him of the right to recruit in prisons and by targeting his influence in the information space.” It also reports that a Wagner-affiliated blogger has “obtained a document that outlines rules for covering the war in Ukraine with explicit requirements to refrain from mentioning Wagner and Prigozhin in the media.”

Prigozhin has used friends in Russian media to push back against speculation he’s on the outs with Putin, but he appears to be playing an increasingly dangerous game. 

Ian Bremer

ZeroSignal Newsletter

February 13, 2023

Who blew up Nord Stream? - Ian Bremer (ZeroSignal Newsletter)

 Who blew up Nord Stream?

   

The controversial Nord Stream gas pipelines connecting Russia to Germany and Europe made headlines last September when several sections mysteriously exploded deep underwater, causing the surface of the Baltic Sea to bubble.

Multiple investigations determined the explosions were an act of sabotage, but they failed to identify a culprit. Most experts in the West pointed the finger at Russia, suspecting it was an attempt to worsen the winter prospects of an already energy-starved Europe to weaken its resolve to support Ukraine.

But I never fully bought into that theory.

Why would Russia blow up its own multi-billion-dollar infrastructure and destroy its biggest source of leverage over Germany, Europe, and the West? While the pipelines were already offline, the Russians were counting on the Europeans eventually getting weary of going without their cheap gas. The ability to turn the tap back on was Moscow's best bet to undercut Western support for Ukraine.

Most importantly, it's been nearly five months without a shred of evidence linking Russia to the sabotage. If there were anything at all that pointed to the Kremlin, US intelligence would have found it and we would already know about it. The fact that we don't tells me the Russians probably didn't do it.

Enter veteran investigative reporter Seymour Hersh, who last week published an explosive piece on his Substack blog alleging the United States blew up the pipeline in a joint covert operation with Norway behind Germany's back and deliberately hidden from Congressional oversight.

The US and Norway categorically denied any involvement, calling Hersh's article "utterly false" and "nonsense." Still, the story was a propaganda gift to Vladimir Putin and his cronies, giving ammunition to US critics in Russia, China, and parts of the developing world.

If true, not only would it give Russia justification to escalate its asymmetric attacks against the West (which they were going to do regardless) — but also it would drive a wedge in the NATO coalition and have massive political (and even legal) ramifications for the Biden administration.

Does Hersh's theory hold up?

The man is a journalistic legend, having earned a Pulitzer Prize for his reporting of the My Lai massacre and cover-up. But much of his work since then has been shoddy and — worst of all — rife with motivated reasoning. His (understandable) biasagainst the US intelligence community and national security establishment colored his widely discredited claims that the Osama bin Laden killing was a cover-up and that the Syrian government didn't use chemical weapons.

The fact that this latest story aligns so neatly with Hersh's ideological prism should invite skepticism. And indeed, a look under the hood of Hersh's report reveals a whole lot of holes — and no smoking gun.

First, the explanation he lays out for hiding the operation from Congress isn't internally consistent. Hersh initially claims the operation was devised without special operations personnel to avoid having to notify Congress. But any covert action pursued under Title 50 authority — the section of US code governing covert and direct action undertaken by the intelligence community — would have had to be briefed to Congress regardless of what assets were used.

Hersh then suggests that the operation was actually "downgraded" to avoid Congressional notification. But that's not a thing: If it was a covert action, the government was legally required to notify Congress, end of story.

Second, Hersh's interpretation of President Joe Biden's and Under Secretary of State for Political Affairs Victoria Nuland's pre-invasion remarks as unambiguous threats of military sabotage is self-serving and disingenuous. If, as Hersh claims, the administration went through so much trouble to hide the operation from Congress, why would it foreshadow it publicly not once but twice?

The most logical reading is that they were instead referencing diplomatic engagements with Germany to halt pipeline operations, which were already underway.

Third, the publicly verifiable facts don't align with Hersh's timeline. He specifies that US Navy divers supported by a Norwegian Alta-class minesweeper planted the explosive charges during BALTOPS — the NATO military exercises conducted annually in the Baltic Sea — in June 2022. But publicly available data shows that none of Norway's five Alta-class ships were in the region during that exercise.

Hersh further claims that a Norwegian P-8 Poseidon — a maritime control aircraft — dropped a sonar buoy on the day of the blast to trigger the explosives. But according to flight tracking, none of the five P-8s that Norway operates were in the area that day.

That neither of these assets shows up on tracking data is critical because Hersh's core claim is that Norwegian assets were used precisely so these maneuvers wouldn't need to be covert.

More broadly, the very contention that the US would sabotage infrastructure partially owned by a key ally (Germany) in concert with another shared ally (Norway) without alerting Berlin beggars belief given what we know about Washington's strategic interests.

At the time, the Biden administration was pursuing closer ties with Germany on a range of issues, including tech regulation, China decoupling, and reversing the pullback in transatlantic cooperation initiated by the Trump administration. Blowing up Nord Stream would have jeopardized all those initiatives and invited Russian retaliation for a questionable benefit: definitively ending Germany's already-dwindlingdependence on Russia to strengthen NATO unity.

Targeting Germany in cahoots with Norway also would've risked fracturing the NATO coalition Biden had explicitly focused on bolstering from day one — a risky move for a generally risk-averse administration.

To be clear, none of this means the US didn't do it. After all, Washington had been critical of these pipelines for years. And very few countries on Earth could pull off such a challenging operation, with the United States topping the list. Hersh could plausibly be wrong about the how while being right about the who, but his article doesn't prove anything.

If not Russia or the US, then who?

Who else had the motive, the means, and the opportunity to pull off such a risky, complex, and fingerprint-free operation?

My money is on Ukraine. Ukrainians had the most to gain from blowing up this multi-billion dollar, Russian-owned cudgel. They were also the most risk-tolerant. Russia poses an existential threat to them, so they are willing to do almost anything to prevail. They knew they couldn't win without a strong and united NATO behind them, and they knew the alliance would be vulnerable as long as Russia could leverage its gas against Germany.

Five months ago, I would've been skeptical that the Ukrainians had the technical and operational capabilities to do something like this. But I also didn't think they'd be able to blow up the Kerch Bridge connecting Crimea to Russia, itself quite a sophisticated operation. Nor did I imagine they could assassinate Darya Dugina just outside of Moscow. So it's clear the Ukrainians are eminently willing and able to plan and execute high-risk reasonably complex operations.

Is it possible Ukraine had help from one or several NATO members? Poland, for instance, has been the most strident Russia hawk in the coalition, aware that it's next on Putin's wishlist should Ukraine fall. It's not inconceivable that the highly competent Polish special forces could have pulled off such an attack. Of course, as far as means go, the Americans would have had the most operational capability to help Kyiv with this. That's what made Hersh's theory compelling at face value.

Absent any proof, though, it's speculation all the way down. And make no mistake: There's no proof of anything — not yet at least.

Beware of anyone who claims otherwise.

Ian Bremer

Zero Signal Newsletter

February 15, 2023

How Iran beats Russia at sanctions game - Ian Bremer, GZero Signal Newsletter

 Israel o faz por causa própria ou para ajudar a Ucrania?

How Iran beats Russia at sanctions game

   

A recent attack on a weapons manufacturing compound in the Iranian city of Isfahan, presumably by Israel, has again highlighted the Islamic Republic's position as a global arms powerhouse. 

While it’s hard to know exactly what projects are in the works at the Isfahan facility, there are reports that the site is used to produce "suicide drones.” These are the same cheap and dirty contraptions Vladimir Putin’s military is using to pummel Ukrainian cities. 

With attention yet again on Iran’s drone-making prowess, a big question emerges: How has heavily sanctioned Iran managed to become a one-stop shop for Russia’s advanced weapons needs, while Moscow, largely cut off from Western supply chains, is desperately searching for weapons and parts? 

What are some of the biggest pain points for Russia in procuring weapons and parts? Moscow has long relied heavily on Western components for making advanced weaponry. Before the war, the bulk of its stash came from US firms. But access to semiconductors, the nearly invisible microchips essential for running modern military hardware, changed after the outset of the war when more than 30 countries – like Japan, the Netherlands, and the EU – joined US-driven bans on exports to Russia. 

What’s more, Russia has struggled to bulk up its domestic semiconductor industry. Some firms have gone bust, and private companies have refused to use domestically made chips, citing quality concerns – again reinforcing Russia’s reliance on foreign manufacturers. But global supply kinks have made procuring chips harderfor everyone. 

Still, Moscow has found ways to access these and other parts through third parties – including China and Turkey, a NATO member! Russia also imported $777 million worth of products from Western tech firms between April and October 2022 despite export bans. But Putin needs to get his hands on way more components to fuel his war machine. 

Iran to the rescue, but how? Tehran, meanwhile, has developed a knack for skirting Western sanctions and finding gaps in international arms control agreements to procure Western-made components.

“Iran has been living under sanctions for more than 40 years, so they’ve developed elaborate processes to do it [evade sanctions],” says Dr. Jon B. Alterman, director of the Middle East Program at the Center for Strategic and International Studies. “The smuggling operations in Iran are run by people close to the government. They’ve gotten good at it, and they’ve gotten wealthy doing it. They have the infrastructure.”

One part of their solution is quite relatable: Like you and me, the mullahs turn to the World Wide Web to shop. 

“Some of the stuff [needed to make drones], they can buy on eBay and Amazon,” says Alterman. “In a world of a huge amount of commerce, a lot of things are obtainable.” 

It’s also a matter of proactive preparedness. Iran has for decades invested heavily in its arms industry, launching a modernization program that’s allowed it to make major advancements in ballistic and cruise missile production. 

Iranian officials have also been known to scour conflict zones for American and Israeli debris for research purposes, including reverse-engineering. In fact, President Joe Biden recently tapped a task force to establish why a whopping 82% of components found in downed Iranian drones in Ukraine were reportedly made in … America. (Not exactly the Made in America promo Biden wanted).

Why would Iran help Russia? Like so many things in geopolitics, it’s a case of I’ll scratch your back if you scratch mine, but Iran is also playing the long game.

“The war in Ukraine has reshuffled the deck of alliances, and Iran now has access to modern weaponry,” says Pierre Boussel, a Middle East expert at the Liechtenstein-based Geopolitical Intelligence Service. So Iran is arming the Russians and, in return, the Russians are giving Tehran some advanced hardware. Case in point: Moscow recently sent Tehran the US Javelin anti-tank missile and Stinger anti-aircraft missile, as well as British anti-tank missiles.

While Iran’s rustic approach can’t compete with the West’s, it has helped Tehran carve out a nice space for itself in the arms-making world: “US sanctions have forced Tehran to position itself in a low-cost arms market,” Boussel says, adding that “Iranian drones may be slow and inaccurate … but they are numerous enough to overwhelm enemy defenses.”

Plagued by crises at home and abroad, Iran has enough on its plate. So what’s its game plan? “The Iranians have an interest in having at least one of the great powers being indebted to them,” says Alterman, adding “they see an opportunity to lock in some gains.”

“Iran has no partners, so the fact that somebody might owe it is kind of a big deal in Iran.”

Ian Bremer takes the two sides on Ukraine war

Ponderando os dois lados... 

Time favors ... Ukraine or Russia?

February 01, 2023

Ian Bremmer

 Luisa Vieira

Russia’s invasion of Ukraine has been grinding on for nearly a year (or nearly a decade if you ask the Ukrainians). In this time, momentum has swung back and forth between Russia and Ukraine. But now, the front lines have stabilized, making gains harder to come by for both sides.

There’s consensus that in the near term, Moscow will be unlikely to achieve its war aims and Kyiv will be equally unlikely to liberate all its territory. A lasting ceasefire, let alone a negotiated settlement, remains as distant as ever because neither country is willing to make territorial concessions as long as they believe they can achieve a stronger negotiating position through continued fighting. And both sides still believe defeat is unthinkable and victory is at least possible (if not likely).

There’s no end in sight to what seems to be evolving into a war of attrition. Which raises the critical question: Who has the advantage in a drawn-out war, Russia or Ukraine?

Let’s look at both sides of the argument.

Time is on Ukraine’s side

Ukraine can continue to defend itself and retake territory for as long as the United States and Europe keep the guns and dollars flowing. Despite suffering massive losses, Ukraine currently has better offensive and defensive capabilities than it did on Feb. 24, 2022. Ukrainians’ will to fight is intact, and their forces are better armed, better trained, and better led than their Russian counterparts. Ukraine’s successful counteroffensives last summer and fall put Russia on the defensive; advanced Western weaponry (including armored vehicles and air-defense systems) will help Ukraine make further inroads into Russian-held territory and put Kyiv in a better negotiating position.

Western support for Ukraine isn’t crumbling.Despite the costs of support and the side effects of the war, public opinion in the West remains steadfast in backing military and financial aid for Kyiv. In the US, only a minority of the Republican caucus opposes it. In Europe, support has held even in countries with new populist governments like Italy. Meanwhile, Germany is decoupling from Russian gas remarkably quickly and will survive the winter just fine – a sign that Russia’s biggest source of leverage over European countries is effectively over.

Russia’s military will continue to underperform Ukraine’s. Moscow lost some of its best men and equipment in the first months of the invasion; it’s now running short of important military capabilities, and its ability to replenish them is constrained by decades of underinvestment, corruption, and now sanctions. Much of the equipment it has left in storage is of low quality or in poor condition, and conscripts lack the motivation and training of professional and volunteer soldiers. The manpower and matériel Russia can throw at the war going forward are decidedly inferior to what it fielded last Feb. 24.

Mounting economic woes will erode Russia’s ability and willingness to fight. Russia’s economy shrunk by 3.5% in 2022 and it’ll do so by a similar or greater amount this year. While high oil prices have thus far cushioned the blow felt by most Russians, the impact of sanctions will grow significantly over time. Some of the toughest measures — export controls, the oil embargo, the price cap on Russian crude — are only now starting to take effect. The long-run erosion of living standards and productive capacity due to Russia’s decoupling from advanced industrial economies will be acute and permanent. This will make it hard for Russia to reconstitute its defense industrial base, blunting its war effort. Most importantly, combined with mounting casualties, it will reduce popular and elite support for the war and put pressure on Putin to de-escalate.

Time is on Russia’s side

Ukraine needs ever-more-powerful Western weapons to sustain the fight, but Western support will dry up sooner rather than later. Ukraine’s military capabilities are almost entirely dependent on continued support from the West and especially from the United States. But Western publics will get weary of the war as the costs mount and the risk of World War III becomes more apparent. With Republicans in control of the House, a growing GOP bloc opposed to aid for Ukraine, and a Republican president potentially taking office in 2025, Washington’s commitment to Kyiv can only weaken. The moment US support withers, so will Europe’s… and Kyiv’s ability to defend itself.

Even with continued Western support, Russia can win on the battlefield. Russian troops are no longer on the back foot. Now that they’ve had time to fortify their defensive positions and fill their ranks with better-trained conscripts, Ukraine won’t be able to repeat the kinds of successful offensives it achieved last year. While Kyiv may have overperformed in the early days of the war, a drawn-out conflict favors the more powerful belligerent. Both sides have taken severe losses, but Russia is a larger country with much more manpower, equipment, and military-industrial capacity it can throw at the war. Western weapons notwithstanding, Ukraine is likely to run out of men long before Russia does.

Unlike Ukraine and the West, Russia has the staying power to survive a protracted conflict. The West has used up most of the leverage it had against Russia, yet sanctions haven’t succeeded in crippling Russia’s economy or military. Moscow continues to have strong commercial or security ties with China, Iran, India, and many developing countries, and it maintains the ability to produce weapons domestically without imported components. Most ordinary Russians haven’t seen their living standards decline, and they continue to buy into the Kremlin’s pro-war propaganda. But even if that were to change, Putin’s ability to crush dissent means domestic political stability isn’t under threat; he can afford to continue piling pressure on Ukraine and the West at minimal risk to his rule.

Why it matters ...

Because the answer determines the pace and volume of Western aid to Ukraine.

When Kyiv launched a successful counteroffensive that won back swaths of Russian-occupied territory last summer and fall, Ukraine’s backers believed that the longer the fighting went on, the more likely Ukraine would emerge victorious. Accordingly, they carefully calibrated their support for Kyiv to avoid provoking the Russians unnecessarily. Now that the Russians have gotten their act together a bit, many have come to believe time is on Moscow’s side. This explains why the West finally agreed to deliver tanks in the hopes of achieving a quicker end to the conflict (or at least ensuring the Ukrainians could continue to effectively defend themselves).

Trouble is, Ukraine definitely can’t win without steadily incremental support from the West, but the level and path of Western support both depends on and determines Western leaders’ beliefs about the trajectory of the war. As calls for fighter jets come into play, this isn’t getting any easier.

Readers, tell me what you think.