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461. Was Something Structurally Wrong at the FOMC?

Author:
Alan S. Blinder
Publication Date:
10-2024
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
There is little doubt that the Federal Reserve was late to start raising interest rates as inflation rose in 2021–22. The Federal Open Market Committee (FOMC) made a substantial, though perhaps understandable, error in failing to raise interest rates until March 2022. Much of that policy error can be attributed to faulty forecasts of inflation, which the Federal Reserve shared with many other forecasters. It was not an outlier. But the error was not quite as consequential as the Fed’s sharpest critics allege. Even if the FOMC had started to hike rates earlier, the econometric evidence suggests that the effects on peak inflation would likely have been small. Supply constraints, not excess demand, ruled the roost. They came, driving inflation higher; and then they went, pulling inflation down. Blinder says that the FOMC’s August 2020 framework shoulders more of the blame for the inflationary surge than it should—probably because the new wording revised both of the Fed’s goals, low inflation and high employment, in dovish directions. For that reason alone, the framework will almost certainly be changed in 2025, given the high inflation since. But how? Blinder suggests that the August 2020 change in the employment goal, from symmetry to “shortfalls,” is sensible and probably not too important anyway. But the change in the inflation goal, from a 2 percent point target to flexible average inflation targeting (FAIT), was probably consequential. It may have made the FOMC slow on the draw as inflation gathered steam, and it may have kept monetary policy too tight for too long in 2024. In both directions, Blinder argues, a 1.5 to 2.5 percent target range would be a better choice. To answer the question in the title of this Policy Brief, that may be the structural flaw the Fed should fix.
Topic:
Economics, Monetary Policy, Federal Reserve, Interest Rates, and Supply
Political Geography:
North America and United States of America

462. Is the United States undergoing a manufacturing renaissance that will boost the middle class?

Author:
Robert Z. Lawrence
Publication Date:
10-2024
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
President Joseph R. Biden Jr. made the goal of his economic policies to “build back better.” He emphasized helping workers without college degrees in order “to grow the economy from the bottom up and the middle out.” The emphasis on a manufacturing renaissance is reflected in the special incentives for US manufacturing in President Biden’s programs: the Bipartisan Infrastructure Law, the CHIPS and Science Act, and the Inflation Reduction Act. Lawrence finds little evidence of a renaissance in US manufacturing as of July 2024: US manufacturing employment was barely above its pre-COVID levels. Manufacturing output has grown more slowly than GDP since the pandemic, and productivity in manufacturing has not increased since 2017. Moreover, the Bureau of Labor Statistics projects that over the next decade, manufacturing employment will decline and manufacturing output will grow more slowly than GDP. However, Lawrence says, additional manufacturing employment growth could be in the pipeline because of investment projects that have been announced but not yet completed. Lawrence estimates the additional manufacturing employment potential of announcements compiled by the White House as of mid-2024, finding that these projects could boost demand for 1.7 million manufacturing workers—a growth of 13.3 percent above 2022 manufacturing employment levels. It should be noted, however, that these are not estimates of net overall manufacturing employment growth. Some of the increased demand will be offset by losses of fossil fuel–related jobs displaced by the investments as well as declines in manufacturing employment for other reasons. Moreover, the impact of all the projects is just over 1 percent of overall US employment and in most states far too small to significantly change the opportunities for most non-college-educated workers and disadvantaged communities.
Topic:
Economic Policy, Inflation, Manufacturing, and Middle Class
Political Geography:
North America and United States of America

463. Mistaken Identities Make for Bad Trade Policy

Author:
Maurice Obstfeld
Publication Date:
10-2024
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
Election season debates over trade policy have brought renewed attention to the United States' longstanding deficit in foreign trade. Critics from both the right and left sides of the political spectrum, including Donald Trump and his allies, hold the trade deficit responsible for a range of alleged ills, among them, slower US economic growth, fewer jobs, the decline in manufacturing, and a transfer of American wealth to foreign owners. Trump supporters' ideas to reduce US trade deficits, such as far-reaching taxes on international transactions or forced dollar devaluation, rest on particular theories of why the deficits have arisen and persisted. These theories often have little basis other than macroeconomic accounting identities—relationships that are always true, by definition, and that therefore are consistent with a range of economic outcomes. Two key macroeconomic identities, the national income and product identity and the balance-of-payments identity, have been widely abused as justifications for radical policies to balance US trade. The identities describe relationships that necessarily hold among macro variables, but without the further input of behavioral reasoning, they cannot yield valid predictions or constructive policy conclusions. Identity-based reasoning is especially dangerous because it disguises the collateral damage that superficial fixes may inflict. It is much better to identify and directly correct the distortions that cause excessive trade deficits to emerge and persist.
Topic:
Elections, Macroeconomics, Trade Policy, Donald Trump, and Trade Deficit
Political Geography:
North America and United States of America

464. The Rise of US Economic Sanctions on China: Analysis of a New PIIE Dataset

Author:
Martin Chorzempa, Mary Lovely, and Christine Wan
Publication Date:
12-2024
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
Concerns over China’s national security and human rights activities have led the United States to rely increasingly on financial sanctions and export controls to curb Beijing’s behavior. But the tools are so complex it is difficult to assess their effectiveness. A new PIIE dataset sheds light on this economic statecraft. The first Trump administration added three times as many Chinese entities to export control and other sanctions lists than the previous four administrations; the Biden administration added even more to these lists. Most sanctions and controls target high-tech sectors, especially electronics, military and defense entities, aviation, space, and aerospace; targets are chosen under a veil of secrecy, raising questions over accountability and transparency. The benefits of isolating Chinese firms come with potential costs, hobbling innovation for US and allied business, encouraging circumvention of sanctions, and accelerating Chinese innovation.
Topic:
Economics, Human Rights, National Security, Sanctions, and Exports
Political Geography:
China, Asia, North America, and United States of America

465. Is the World Trade Organization Still Relevant?

Author:
Alan Wm. Wolff
Publication Date:
12-2024
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
There has been a profound shift in American foreign economic policy. The United States has abandoned promotion of a rules-based open international trading system and no longer supports the World Trade Organization (WTO). The United States and its allies created the current world trading system as an essential part of the liberal world order, a series of rules-based international organizations and agreements to help rebuild the global economy and foster peaceful cooperation after World War II. Today, rising populism, heightened geopolitical tensions, and persistent inequality are threatening this order. Wolff emphasizes that the WTO is still relevant to the liberal international order, and it is in the core interest of the United States and other countries to continue to support that order. But he cautions that the WTO needs major reforms if it is to survive as an effective force governing world trade. WTO members must engage in serious negotiations to find acceptable solutions to shared problems. The resulting agreements can be political commitments or adoption of binding rules. Regressing to a lack of accountability for one’s trade policy measures, however, would be unacceptably damaging.
Topic:
Economic Policy, Trade, WTO, and International Order
Political Geography:
North America and United States of America

466. Enhancing Trilateral Security Cooperation: Korea, the United States, and Indonesia

Author:
Sook-yeon Lee
Publication Date:
06-2024
Content Type:
Special Report
Institution:
Korea Economic Institute of America (KEI)
Abstract:
Sook-yeon Lee argues that Indonesia serves as an ideal partner for the United States and South Korea to advance their objectives in the Indo-Pacific region and that the three countries should expand areas for trilateral cooperation. While the bilateral South Korea-Indonesia and US-Indonesia partnerships have deepened over the past several decades, trilateral security cooperation remains unexplored due to the differing scopes of cooperation between the two bilateral relationships. Lee outlines several areas in which the three countries should expand trilateral cooperation and contribute to strengthening regional security. Due to Indonesia’s desire for neutrality and South Korea’s concerns regarding its ties with China, Lee recommends a cautious approach to initiating trilateral cooperation in maritime security and counterterrorism before gradually expanding to additional areas. Such an approach both addresses Indonesia’s immediate cooperative needs and aligns with areas that South Korea and the United States have already identified within their respective partnerships with Indonesia. However, the primary challenge facing trilateral security cooperation is maintaining mutual trust and ensuring the leaders of all three countries are committed to upholding trust as the foundation of trilateralism. Domestic politics and foreign policy considerations of the three countries further complicate efforts to enhance trilateral security cooperation. Thus, Lee recommends that the three countries strengthen strategic dialogues to understand and respect the differences in each country’s respective core interests to ensure the establishment of a durable trilateral partnership between South Korea, Indonesia, and the United States.
Topic:
International Relations, Bilateral Relations, Strategic Interests, Regional Security, and Security Cooperation
Political Geography:
Indonesia, South Korea, North Korea, Southeast Asia, and United States of America

467. Camp David and US-Japan-ROK Trilateral Security and Defense Cooperation: Consolidating the Northeast Asia Anchor in the Indo-Pacific

Author:
Yasuyo Sakata
Publication Date:
06-2024
Content Type:
Special Report
Institution:
Korea Economic Institute of America (KEI)
Abstract:
Yasuyo Sakata provides a historical overview of US-Japan-ROK defense cooperation in Northeast Asia, from the Korean War to the Camp David Summit, explaining how the trilateral partnership was redefined as an Indo-Pacific partnership and incorporated the “Northeast Asia Anchor.” Sakata argues that Japan and the United States have taken the lead in reconstructing the Indo-Pacific security architecture through their Free and Open Indo-Pacific (FOIP) strategies, and that the US-Japan-ROK trilateral relationship has been incorporated into this framework alongside other alliances such as the Quad and AUKUS. Sakata explores how Korea’s shift back towards the Indo-Pacific under President Yoon’s leadership has allowed for expansion of the scope of US-Japan-ROK trilateral cooperation, as affirmed during the Camp David Summit. However, Sakata contends that a comprehensive defense approach is needed in the Indo-Pacific involving allies and partners to build upon this foundation and strengthen defense and security cooperation amidst the challenges posed by North Korea, the Taiwan Strait, maritime security, cybersecurity, and space. Action is essential, as time is running out to solidify gains from the Camp David Summit and build a stable relationship. Therefore, Sakata argues that Japan and South Korea should strengthen relations deliberately yet cautiously before domestic politics potentially spoil recent progress.
Topic:
International Relations, Security, Alliance, and Defense Cooperation
Political Geography:
Japan, Asia, South Korea, and United States of America

468. US-South Korea Cyber Cooperation: Towards the Higher-Hanging Fruits

Author:
Jenny Jun and So Jeong Kim
Publication Date:
12-2024
Content Type:
Special Report
Institution:
Korea Economic Institute of America (KEI)
Abstract:
In the past decade, the US and South Korea faced a relatively narrow set of challenges in cyberspace, notably North Korea’s cyber crime facilitating sanctions evasion. In the next decade, however, the two countries will face a more diversified set of challenges with growing North Korean ties with Russia, its involvement in the war in Ukraine, and intensifying US-China competition. The US and South Korea must develop a joint playbook for responding to scenarios of disruptive cyber operations targeting South Korean public and private sectors and prepare for an even more difficult environment for curbing North Korea’s cyber crime as Russia provides a way out. Over the past two years, the US and South Korea have significantly deepened and broadened cooperation on cyber issues and have expanded cooperation further to trilateral and multilateral settings. The two countries established several regular high-level and working-level dialogues, have issued joint sanctions and threat advisories, and deepened mil-to-mil cooperation. However, 2024 has been a watershed in terms of shifting geopolitical dynamics on and around the Korean peninsula. Cyber threats will become more diversified, and the bilateral relationship will be tested at the seams without a clear joint strategic concept and operational plan.
Topic:
Sanctions, Geopolitics, Multilateralism, Strategic Competition, and Cyberspace
Political Geography:
China, Asia, South Korea, North America, and United States of America

469. Clean Energy Pragmatism as a Spark for US-South Korea Relations

Author:
Elan Sykes
Publication Date:
12-2024
Content Type:
Special Report
Institution:
Korea Economic Institute of America (KEI)
Abstract:
The United States and South Korea are close allies, committed to reducing greenhouse gas emissions and home to advanced industrial economies. Pragmatic cooperation on clean energy technologies would aid their shared goals in climate mitigation, energy security, and supply chain resilience. US-South Korea cooperation should include pooling shared technological expertise, aligning market and carbon accounting rules, investing in constrained supply chains, and adopting well-targeted policies to encourage research, development, and demonstration (RD&D) projects for early-stage technologies like clean hydrogen and advanced nuclear power plants. Clean energy pragmatism requires acknowledgment of the constraints facing each country to ensure policies are properly scoped, politically durable, and revised iteratively in light of observed outcomes. Neither country can succeed in this multidecadal transition alone. With their shared industrial capacity, world-class innovators engaged in joint research and development, and properly aligned market standards, however, both countries can solidify their position to achieve 21st-century energy security and economic growth. Yet, policy design and implementation are never complete unless a problem is entirely solved, and climate change is not a problem that can be solved over a single presidential term. Political shifts hold the potential to either undo progress or help spur new action.
Topic:
International Relations, Science and Technology, Renewable Energy, Supply Chains, and Research and Development
Political Geography:
Asia, South Korea, North America, and United States of America

470. Canvasing Variations in US-South Korea Cooperation on AI and Quantum Technology

Author:
Sanghyun Han
Publication Date:
12-2024
Content Type:
Special Report
Institution:
Korea Economic Institute of America (KEI)
Abstract:
This paper elucidates how Washington and Seoul cooperate on AI and quantum technologies, both recognized as critical emerging technologies essential to their national interests. Technology cooperation is denoted as government-to-government efforts aimed at cultivating and developing technology, focusing on national strategies and interests. In AI, the United States holds a dominant leadership position, while South Korea demonstrates strengths in certain areas, though not across the board. Cooperation in AI primarily focuses on standardization efforts, with significant involvement of the South Korean government in partnerships with the US private sector, as well as private-sector-led bilateral research initiatives. In contrast, South Korea’s capabilities in quantum technologies are far more limited. Nevertheless, cooperation in this domain is largely centered on research collaboration, with both governments actively participating alongside international research consortia led by the United States. The differing focuses—standardization in AI and research collaboration in quantum technologies—reflect the respective strengths and needs of the two countries in these critical fields. The progression of the US-ROK alliance in this direction is both natural and beneficial, as the development of advanced and sophisticated technology is incrsaneasingly beyond the capacity of any single state alone.
Topic:
International Cooperation, Artificial Intelligence, Private Sector, Standardization, and Quantum Computing
Political Geography:
Asia, South Korea, North America, and United States of America

471. Cooperation on Semiconductor Supply Chains and Technology

Author:
Soyoung Kwon
Publication Date:
12-2024
Content Type:
Special Report
Institution:
Korea Economic Institute of America (KEI)
Abstract:
The security alliance between the United States and South Korea, once focused primarily on military defense, is evolving to include economic security and technological cooperation. The evolving partnership between the two countries, particularly in the areas of semiconductor supply chains and advanced technologies, features the deepening and broadening of the alliance in the form of a Global Comprehensive Strategic Alliance. This change is driven by intensifying competition between the United States and China, which has led to the securitization of key technologies like semiconductors. This paper examines the opportunities and challenges in deepening and broadening US-South Korea cooperation on semiconductor supply chains. While such developments support the shared objectives of advancing technological innovation, bolstering supply chain resilience, and addressing potential threats from China, challenges remain in diverging threat perceptions and concerns about collective deterrence. The study concludes that aligning strategic objectives in economic security and technological cooperation is essential to ensure the sustainability of the alliance and its ability to navigate the complex global techno-geopolitical landscape.
Topic:
Defense Policy, Science and Technology, Supply Chains, and Semiconductors
Political Geography:
Asia, South Korea, North America, and United States of America

472. From Security Alliance to Comprehensive Technology Centered Partnership

Author:
Scott Snyder
Publication Date:
12-2024
Content Type:
Special Report
Institution:
Korea Economic Institute of America (KEI)
Abstract:
The Joe Biden and Yoon Suk-yeol administrations have embraced the expansion of economic cooperation within the US-ROK alliance, leading to the emergence of South Korea as a valued technology partner of the United States and an era of institutionalization for the bilateral relationship. This issue of Korea Policy examines the commitments of the two governments to cooperate on the development of critical and emerging technologies and is intended to capture major changes in the depth of cooperation reflected in the intensification and expansion of policy dialogues between the two countries in both technology development and the defense industrial base. Major themes highlighted across the papers include challenges to maintaining a technology-centered coalition among like-minded partners, the impact of political transition on the sustainability of technology-driven cooperation, the role of the private sector, and the implications of expanding the concept of an alliance beyond its core security-centered logic. As the alliance management baton passes from the Biden to the Donald Trump administration, an important question will be whether the Biden administration’s efforts to “lock in” institutionalized cooperation are sustainable through the political transition and whether such efforts will only be successful with “buy-in” from President Trump and his new administration.
Topic:
Security, Foreign Policy, Science and Technology, and Economic Cooperation
Political Geography:
Asia, South Korea, North America, and United States of America

473. Spillover effects of the recent US monetary policy shocks on the South African economy: The role of monetary and fiscal policy coordination

Author:
Guangling Liu and Marrium Mustapher
Publication Date:
11-2024
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
This study examines how different policy mix regimes affect the impact of recent US contractionary monetary policy on South Africa’s inflation and business cycles. The study uses a small open economy New Keynesian Dynamic Stochastic General Equilibrium model with an integrated fiscal block to analyse these effects. Regime M (active monetary policy) is more effective at containing the spillover effects but leads to higher public debt, requiring larger future fiscal surpluses. The commitment to price stability under Regime M increases real interest rates, raising domestic debt service costs and the debt-to-GDP ratio. Regime F (active fiscal policy), in contrast, stabilizes debt more quickly but at the cost of higher inflation, as it does not use future surpluses to manage public debt. These spillover effects are more amplified under both Regime M and Regime F in the case of a complete exchange rate pass-through and a higher degree of trade openness, with Regime F exhibiting a stronger amplification effect.
Topic:
Foreign Policy, Economics, Monetary Policy, Inflation, and Fiscal Policy
Political Geography:
Africa, South Africa, North America, and United States of America

474. Effective US government strategies to address China’s information influence

Author:
Kenton Thibaut
Publication Date:
07-2024
Content Type:
Policy Brief
Institution:
Atlantic Council
Abstract:
China’s global influence operations have received increasing attention in the national security community. Numerous congressional hearings, media reports, and academic and industry findings have underscored China’s increased use and resourcing of foreign information manipulation and interference (FIMI) tactics in its covert operations both in the United States and abroad. In response, US government offices the Foreign Malign Influence Center (FMIC), the Global Engagement Center (GEC), and the Cybersecurity and Infrastructure Security Agency (CISA), among others, have made strides in raising awareness of the issue and charting pathways to increase the resilience of the US information ecosystem to foreign influence. To date, however, the efforts to counter the influence of the People’s Republic of China (PRC) have been fragmented. That fragmentation is indicative of a lack of cohesion around the concept of influence operations itself. Across the government and nongovernment sectors alike, there is considerable variation regarding the definition and scope of information manipulation. For example, the Department of State’s (DOS’s) GEC has an expansive definition, which includes “leveraging propaganda and censorship, promoting digital authoritarianism, exploiting international organizations and bilateral partnerships, pairing cooptation and pressure, and exercising control of Chinese-language media.” Others define it more narrowly as disinformation and propaganda spread by a foreign threat actor in a coordinated, inauthentic manner, and largely occurring on social media platforms. This variation is a reflection of the holistic and multifaceted nature of Chinese influence. Coercive tactics and influence operations have long been a central part of China’s strategic tool kit and core to how it engages with the outside world. Because China conceives of the information domain as a space that must be controlled and dominated to ensure regime survival, information operations are part of a much bigger umbrella of influence that spans the economic, political, and social domains. It may be more useful to think of information manipulation as existing within the broader conceptual framework of China’s weaponization of the information domain in service of its goal to gain global influence. As previous work by the Digital Forensic Lab (DFRLab) has shown, China’s approach to the information domain is coordinated and proactive, taking into account the mutually constitutive relationships between the economic, industrial, and geopolitical strategies of the Chinese Communist Party (CCP). The aim of its efforts is to gain influence—or “discourse power”—with the ultimate goal of decentering US power and leadership on the global stage. One of the main mechanisms through which the CCP seeks to achieve this objective is by focusing on the dominance of information ecosystems. This ecosystem encompasses not only narratives and content that appear in traditional and social media but also the digital infrastructure on which communication systems rely, the policies that govern those systems at the international level, and the diplomatic strategy deployed by Beijing’s operatives abroad to gain buy-in for the CCP’s vision of the global order. The DFRLab’s previous two reports, which explored China’s strategy and the impacts of its operations abroad, found that the United States will not be successful in addressing the challenges of Chinese influence if it sees that influence as separate from the interconnected economic, political, and technical domains in which its strategy is embedded. To this end, the DFRLab hosted a series of one-on-one expert interviews, conducted research and workshops, and held a virtual roundtable discussion with scholars and practitioners with expertise on or experience in addressing authoritarian influence and information operations, US government processes and policies around these issues, and Chinese foreign policy. This issue brief is part of a larger body of work that examines the Chinese government’s interests and capabilities and the impacts of party’s efforts to shape the global information ecosystem. The focus of this report is on how the US government can best respond to those challenges, including the architecture, tools, and strategies that exist for addressing PRC influence and information manipulation, as well as any potential gaps in the government tool kit. This report finds that, to mount the most effective response to Chinese influence and the threat it poses to democratic interests at home and on the international stage, the United States should develop a global information strategy, one that reflects the interconnected nature of regulatory, industrial, and diplomatic policies with regard to the information domain. A core assumption undergirding this concept is that US policymaking space tends to over-index on the threat of information manipulation in particular while under-indexing on the core national interest of fostering a secure, interoperable information environment on a larger scale. The limits of understanding Chinese influence as systemic and part of a broader strategy has sometimes led US response to be pigeonholed as an issue of strategic communications, rather than touching on the information and technology ecosystems, among others, where China focuses its information and influence efforts. Responding to Chinese influence with government messaging is not sufficient to address the complex nature of the challenge and places the United States in a position of reactivity. In short, understanding that the CCP (1) integrates its tech industrial strategy, governance policy, and engagement strategy and (2) connects its approach at home to how it engages abroad, the United States needs to do the same, commensurate with its values. It should not respond tit-for-tat but rather have a collective strategy for a global competition for information that connects its tech strategy to its governance approach to its engagement around the world. That is not to say that a US strategy on information resilience should mirror China’s, or that such a strategy should be developed in response to the PRC’s actions in the information domain. Nor is it to say that the United States should adopt a similar whole-of-government approach to the information domain. There are silos by design in the US system and important legal and normative foundations for the clear delineation of mission between them. What this issue brief argues for is a strategic breaking down of silos to facilitate proactive action versus a dangerous breaking down of legally required silos. This report emphasizes that the United States should articulate how major initiatives like the CHIPS and Science Act, regulatory approaches like the recent executive orders on AI and data security, and the DOS’s recent cyberspace and digital policy strategy are part of a cohesive whole and should be understood and operationalized as such. The strategy should outline what the United States stands for as much as what it is against. This requires that the United States frame its assessment of threat within a broader strategy of what its values are and how those values should be articulated in its regulatory, strategic, and diplomatic initiatives to promote open information environments and shore up information resilience. This includes working with allies and partners to ensure that a free, open, and interoperable internet is a global priority as well as a domestic one; developing common standards for understanding and thresholding foreign influence; and promoting connectivity at home and abroad. One finding of this report is that the United States is already leaning into its strengths and values, including championing policies that support openness and continuing support for civil society. This, along with the awareness of influence operations as the weaponization of the information domain, is a powerful response to authoritarian attacks on the integrity of both the domestic US and global information spaces. The United States has a core national security interest in the existence of a rules-based, orderly, and open information environment. Such an environment facilitates the essential day-to-day tasks related to public diplomacy, the basic expression of rights, and investment in industries of strategic and economic value. Absent a coherent strategy on these core issues related to the integrity of the United States’ information environment that is grounded in an understanding of the interconnected nature of their constitutive parts, the challenges of foreign influence and interference will only continue to grow. This issue brief contains three sections. For sections one and two, experts in different aspects of the PRC’s information strategy addressed two to three main questions; during the course of research, further points were raised that are included in the findings. Each section represents a synthesis of the views expressed in response to these questions. The third section comprises recommendations for the US government based on the findings from the first two sections.
Topic:
Media, Disinformation, and Digital Policy
Political Geography:
China, Asia, North America, and United States of America

475. Adapting US strategy to account for China’s transformation into a peer nuclear power

Author:
David Shullman, John K. Culver, Kitsch Liao, and Samantha Wong
Publication Date:
09-2024
Content Type:
Special Report
Institution:
Atlantic Council
Abstract:
China’s rapidly improving nuclear capabilities and expanding nuclear arsenal underpin its recent rise as a nuclear peer power. For the United States and its allies in the Indo-Pacific region, the uncertainty of China’s intentions behind this nuclear expansion poses a major challenge. It necessitates a revisit of the fundamental assumptions underpinning US and allied planning and preparation for a potential conflict with China. The 2022 White House National Security Strategy1 and National Defense Strategy2 identified China as the only competitor with both the intent and, increasingly, the economic, diplomatic, military, and technological wherewithal to reshape the international order. The 2022 United States Nuclear Posture Review noted how China has embarked on an ambitious expansion, modernization, and diversification of its nuclear forces and established a nascent nuclear triad.3 The report further assessed that Beijing will likely possess at least 1,000 deliverable warheads by the end of the decade.4 China also sustains extensive and ambitious space operations. According to the Department of Defense’s 2022 China Military Power Report5, as of 2021, China’s 260 intelligence, surveillance, and reconnaissance (ISR) satellites were the largest collection of such constellations globally other than the United States’. The transformation of China’s military capabilities no longer represents the linear, stepwise modernization of an outmoded military that characterized the People’s Liberation Army (PLA) for the past two decades. Since the PLA launched its major internal command and service restructuring in 2015, previous doctrinal and teaching publications acquired and exploited by Western analysts are out of date and likely declining in relevance. By extension, much of the Western analysis of PLA plans, operations, and concepts of deterrence and escalation control are also likely to be out of date. China’s rapid expansion of strategic warfighting capabilities (i.e., nuclear forces, space/counterspace systems, and cyber/information operations) represents tremendous discontinuity in the pace, scope, and scale of the PLA’s transformation, necessitating a major US reassessment of Chinese strategy, doctrine, and warfighting operations. The commonly accepted notion that deliberate Chinese nuclear force modernization is characterized as “running faster to stay in the same place” to sustain a minimal retaliatory posture is assessed to have evolved. China now has a higher likelihood of using its newfound nuclear power to more actively deter or compel6 its opponents and safeguard its core interests. This includes perceived external threats that could negatively impact domestic political interests. As a step in this reassessment, this project reevaluated China’s strategy, doctrine, and warfighting concepts in light of its ongoing rapid transformation into a peer nuclear power, examined implications of this assessment for future US contingencies in the Indo-Pacific region, and produced several actionable findings and recommendations for US government decision-makers that can be addressed in the next five- to ten-year horizon.
Topic:
Defense Policy, National Security, Nuclear Weapons, Conflict, and Missile Defense
Political Geography:
China, Asia, North America, and United States of America

476. Empires of Exceptionalism: Lessons from the EU AI Act and Attempts at AI Legislation in California

Author:
Hosuk Lee-Makiyama and Claudia Lozano
Publication Date:
11-2024
Content Type:
Policy Brief
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
The EU AI Act, which passed after three years of negotiations and much ambivalence, sets a comprehensive regulatory framework that reflects the European Union’s unique needs that are not translatable to other jurisdictions. The proposed bill in California (SB 1047) illustrates this case in point. The bill could potentially mislead the public into thinking that AI is already under effective regulatory control. Lawmakers must recognize that the EU differs from other systems. The EU AI Act is not only shaped by the desire to slow down global AI development, allowing Europe to catch up with rivals like the US and China: The EU lacks an enforceable constitution, and the Act prohibits its governments to impose social scoring and discriminatory measures. SB 1047 only addressed humanity-ending disasters and had unclear practical value. Meanwhile, the EU AI Act was passed into law to prevent internal competition and Europe’s history of authoritarianism. Existing laws in California and the EU already regulate most AI use cases. In addition, the EU AI Act reviews existing regulations to ensure they are still fit for purpose, something California failed to do in SB 1047. A critical takeaway is to examine existing obligations or executive powers (including enforcement agencies and public funding) to achieve the desired policy objectives. The diverging outcomes of the two laws show the importance of avoiding mismatches between policy objectives and legislative scope. AI regulation cannot substitute for other policy objectives, like privacy and antitrust. Also, lawmakers must weigh the cost of failed regulation against the risks of non-regulation. California did not see any immediate costs of inaction, whereas delayed action by the EU might have led to the fragmentation of its internal market. Also, given its collective decision-making, the EU can escape accountability for policy failures due to premature laws in a way the leaders in other political systems cannot.
Topic:
European Union, Digital Economy, Legislation, and Artificial Intelligence
Political Geography:
Europe, California, North America, and United States of America

477. CTC Sentinel: February 2024 Issue

Author:
Don Rassler, Sean Morrow, Don Rassler, Kristina Hummel, and Daisy Muibu
Publication Date:
02-2024
Content Type:
Journal Article
Journal:
CTC Sentinel
Institution:
The Combating Terrorism Center at West Point
Abstract:
Long-range aerial attacks by the Iran-backed Houthi terrorist group, including a ballistic missile that traveled at least a thousand miles toward Israel before being intercepted (reportedly in space) on October 31, 2023, are focusing minds on long-range stand-off terrorism. In this month’s feature article, which conceptualizes, outlines, and examines the implications of this emerging threat vector, Don Rassler argues that the notion that terrorists could strike the United States across the oceans with unmanned aircraft systems (UAS) is becoming increasingly less far-fetched. Rassler writes that “over the coming decade, hydrogen fuel cell and solar UAS technology will evolve and mature, and will also likely become more available and accessible to the average consumer, which will make longer ranges more accessible as well. Other disruptive technologies, such as generative artificial intelligence, will also mature and will likely be used by extremists to help them optimize system performance and to overcome, or devise creative solutions to, technical long-range UAS challenges.” He warns that “long-range stand-off terrorism will be attractive to some extremists because it opens-up new attack pathways, can enable surprise, and has the potential to deliver a potent psychological, ‘we can strike you from afar’ punch. Over the next decade advancements in commercial technologies and systems will also make range, and extended range, more accessible for violent non-state-entities, making it likely that in the future long-range terrorism will become even more of a threat.” Rassler’s article is the first in a new recurring series in CTC Sentinel entitled “On the Horizon” that will examine emerging counterterrorism challenges. Our interview is with Christopher Maier, the Assistant Secretary of Defense for Special Operations and Low-Intensity Conflict. “We need to have sustainable CT operations that prevent terrorists’ actions, principally al-Qa`ida and ISIS, to ensure we are not distracted by what we view as the longer-term strategic priorities, such as peer adversaries,” he says. “As the rest of the Department and other parts of the U.S. government are doing less CT, [this] means that those who are doing it have to do it better and, in many respects, do it more proportionally to the rest of the national security enterprise. This is why SOF is looked to as the lead for the CT fight in the Department.” Daisy Muibu examines the state of Somalia’s military campaign against al-Shabaab. She writes that: “A year and five months after the Somali government launched its offensive against al-Shabaab, the initial optimism that characterized its first few months have diminished as the counterinsurgency’s momentum has stalled in the central regions of the country.” She adds that “with only a year left until African Union forces are mandated to fully draw down, significant obstacles remain that cast doubts over the government’s ambitious goals to defeat al-Shabaab and assume full responsibility for securing the country by December 31, 2024.”
Topic:
National Security, Science and Technology, Terrorism, Artificial Intelligence, Houthis, and Al-Shabaab
Political Geography:
Iran, Middle East, Israel, Yemen, Palestine, Somalia, Global Focus, and United States of America

478. CTC Sentinel: March 2024 Issue

Author:
Barak Mendelsohn, Paul Cruickshank, Caleb Weiss, and Ryan O'Farrell
Publication Date:
03-2024
Content Type:
Journal Article
Journal:
CTC Sentinel
Institution:
The Combating Terrorism Center at West Point
Abstract:
In this month’s feature article, Barak Mendelsohn examines the future of the jihadi movement. His article is the second in a new recurring series in CTC Sentinel entitled “On the Horizon” that examines emerging counterterrorism challenges and long-term developments. Mendelsohn writes that over 20 years after 9/11, “jihadi violence in the West is low, but the number of Sunni jihadi outfits around the world has increased. And while the central leaderships of both al-Qa`ida and the Islamic State appear in tatters, many of their affiliates are experiencing expansion.” He argues that “anti-regime grievances, the appeal of religious ideology, and the ability to hurt, are likely to maintain jihadism as a viable resistance ideology.” He further warns that “jihadism is still a powerful force and is making inroads in various regions” and that “a more modest jihadi strategy with a regional focus is offering jihadis a new path forward.” But, he notes, “a sustainable jihadi success would require moderation that is simply antithetical to the nature of the ideology.” Our interview is with Mitchell D. Silber, the executive director of the Community Security Initiative, an intiative “created by the leading organizations in the Jewish community in New York to protect the Jewish population and Jewish institutions in the Greater New York City metro area.” He previously served as Director of Intelligence Analysis at the New York City Police Department. Silber describes how in the months since the October 7 attacks in Israel, there has been a surge in antisemitic threats and violence in the greater New York area. “This is kind of like a category five storm. Five times the amount of hateful postings that our intelligence desk had to vet through,” he says, adding that “since October 7, 2023, there have been at least 23 anti-Jewish assaults in New York City.” He outlines how in response to these grave threats, the Jewish “community, leadership, and organizations have rallied, have risen to the occasion, and are now creating the security architecture that we never had before in the United States in order to meet the moment.” Finally, Caleb Weiss and Ryan O’Farrell examine how Operation Shujaa, launched in late 2021 by the Democratic Republic of the Congo (DRC) and Uganda against the Islamic State Central Africa Province (ISCAP) in the border regions of the DRC near Uganda, has degraded the ability of the group to disseminate propaganda via the Islamic State’s central media apparatus. They write: “While still a serious and deadly threat inside Congo and beyond, [ISCAP’s] propaganda output is a shell of its former self. This decline is, in part, thanks to the current joint Ugandan-Congolese operations against it.”
Topic:
Terrorism, Islamic State, October 7, 2023 Gaza War, Antisemitism, and Salafi-Jihadism
Political Geography:
Uganda, Africa, New York, Democratic Republic of the Congo, Global Focus, and United States of America

479. CTC Sentinel: July/August 2024 Issue

Author:
Devorah Margolin, Gina Vale, Kristina Hummel, Samuel Bowles, and Noah Tucker
Publication Date:
08-2024
Content Type:
Journal Article
Journal:
CTC Sentinel
Institution:
The Combating Terrorism Center at West Point
Abstract:
Ten years ago, in August 2014, the Islamic State began its genocidal campaign against the Yazidi community. In our cover article, Devorah Margolin and Gina Vale evaluate how the group’s gendered violence has manifested during and after its caliphate years. “Even without its caliphate,” they write, “the Islamic State’s gendered violence continues, as its supporters and ideology remain. Arguably, the lack of timely and appropriate responses has perpetuated this violence.” Our interview this month is with William Braniff, director of the Center for Prevention Programs and Partnerships at the Department of Homeland Security. In it, he describes his office’s efforts to utilize a public health-informed approach to preventing targeted violence and terrorism. Edward Lemon and Noah Tucker examine Central Asians’ prominent role in recent global terror plots and attacks. They argue that analysis should focus more on “the factors that led to mobilization to Syria and Iraq a decade ago and that have been exacerbated in recent years, especially in Tajikistan, including crackdowns on religion, corrupt ineffective governance, high levels of migration, and well-established terror networks that are holdovers from the peak of the Islamic State” as a way to understand this evolving threat area. When news reports appeared earlier this summer suggesting that the leader of the Islamic State in Somalia, Abdulqadir Mumin, may have quietly become the “worldwide leader” of the Islamic State last year and may have been killed in a recent U.S. airstrike, the news created far more questions than answers. Austin Doctor and Gina Ligon take a nuanced look at what the developments—if true—could mean for the group. Jessica Davis provides analysis of the Islamic State’s post-caliphate financial strategies. “The future of the Islamic State’s financial infrastructure,” she writes, “is networked, resilient, and adaptive.” This reality, she warns, portends “a grim future for efforts to combat the group’s international presence.” Finally, in June, the U.S. State Department designated the Nordic Resistance Movement, the largest neo-Nazi group in Sweden, as a Specially Designated Global Terrorist, only the second white nationalist organization on its terrorist list. Peter Smith outlines the development of the group and considers what the designation could mean for its future.
Topic:
Genocide, Migration, Terrorism, Women, Islamic State, Gender Based Violence, Public Health, Yazidis, and Neo-Nazis
Political Geography:
Europe, Central Asia, Middle East, Tajikistan, North America, Sweden, and United States of America

480. CTC Sentinel: May 2024 Issue

Author:
Amira Jadoon, Abdul Sayed, Lucas Webber, Riccardo Valle, and Paul Cruickshank
Publication Date:
05-2024
Content Type:
Journal Article
Journal:
CTC Sentinel
Institution:
The Combating Terrorism Center at West Point
Abstract:
In the wake of Islamic State Khorasan (ISK) attack on March 22 in Moscow and a wave of thwarted plots by the group in Europe, there is growing concern about the international terror threat the network poses. In the feature article, Amira Jadoon, Abdul Sayed, Lucas Webber, and Riccardo Valle assess that “ISK’s nearly decade-long presence in its traditional strongholds of Afghanistan and Pakistan, coupled with its expanding reach and appeal among Central Asian populations and its prioritization of inspiring and coordinating transnational attacks as part of its growth strategy, underscores the multifaceted and evolving nature of the threat posed by this resilient terrorist organization … Despite ISK’s recent decline in attacks in Afghanistan, the group retains the determination and capacity to conduct destabilizing high-profile attacks in multiple countries. The group remains resilient, but more worryingly, it has learned to adapt its strategy and tactics to fit evolving dynamics, and exploit local, regional, and global grievances and conflicts.” Our interview is with Ahmad Zia Saraj who served as the General Director of the National Directorate of Security (NDS) of Afghanistan between September 2019 until the fall of Kabul on August 15, 2021. He recounts this turbulent period and the lessons learned. He warns that by using end-to-end-encryption, ISK can recruit, exchange information swiftly, plan, and execute international attacks. “Encrypted messaging apps have helped terrorists speed up operations, enhance operational security, save time, save travel costs, and to plan and execute and even monitor attacks in real time,” he says. “The NDS noticed that a newly recruited fighter does not need to physically attend a training camp to learn how to construct a bomb or how to target the enemy. All this can be done via a smart phone with less risk of exposure. Advancing technology has made it possible for someone to be trained in terrorist tactics in any part of the world, regardless of borders or travel restrictions. A terrorist in Afghanistan or Iraq can easily train another one in any part of the world.” Finally, Pete Simi, Gina Ligon, Seamus Hughes, and Natalie Standridge quantify the rising threats to public officials in the United States by reviewing a decade of federal data. They write that: “A review of federal charges for the past decade highlights that the number of threats to public officials is growing. While 2013-2016 had an average of 38 federal charges per year, that number sharply increased to an average of 62 charges per year between 2017-2022. Across the time series, ideologically motivated threats, on average, accounted for almost half of the cases, and the portion steadily increased year over year. A preliminary review of cases from 2023 and 2024 shows that the number of federal prosecutions is on pace to hit new record highs. The rising threat level may produce significant consequences for the U.S. democratic system of governance.”
Topic:
Science and Technology, Terrorism, Islamic State, Encryption, and Threat Assessment
Political Geography:
Afghanistan, Russia, Europe, Central Asia, North America, and United States of America