(Originally published Jan. 2 in “What in the World“) And so, we say goodbye with no small amount of irony to 2023. It was a year that further exposed Washington’s intolerance of economic or geopolitical rivals and led the world more deeply into a new Cold War. Proxy wars are raging in Eastern Europe and the Middle East—and the Pacific is on the brink. All led by a nation itself so divided that the front-runner to lead it in 2025 is an insurrectionist who stands to completely up-end U.S. foreign policy and its alliances.
Center stage was occupied by Ukraine, the nation Russian President Vladimir Putin invaded in February 2022 saying its conquest was a matter of Russia’s survival against the U.S. and North Atlantic Treaty Organization. U.S. President Joe Biden has vowed to protect Ukraine by giving it whatever military aid it needs—short of direct U.S. involvement—to drive the Russians out. But Biden has pursued an incrementalist approach to aiding Ukraine’s war effort, fearful of an American public still bruised by two decades of war in Afghanistan and Iraq, and worried that Moscow might interpret American involvement as justification for striking NATO or launching nuclear weapons. An associated fear, seldom uttered out loud in Washington, is that Ukraine could provoke the same response from Moscow by using U.S weaponry to launch retaliatory attacks inside Russia.
U.S. long-range, mobile rocket launchers called Himars gave Ukraine an advantage over Russia early in the year, helping it destroy Russia’s supply lines in addition its tanks and missile launchers. U.S. anti-missile systems such as Nasams, meanwhile, helped defend Kyiv against Russian missiles and Iranian-made drones. Eventually, Biden approved sending Patriot anti-missile batteries to Ukraine, too, then M1 Abrams battle tanks. U.S. allies in NATO also poured weapons into Ukraine, with Britain and others agitating for greater U.S. support. By August, Biden had publicly approved sending F-16 fighters to Ukraine, and in September, long-range Atacm missiles. But his reluctance was in large part pretense: the decision to give Ukraine F-16s had been made by the previous November.
Part of Biden’s escalation reflected a growing confidence that the war has slowly weakened Russia’s ability to strike against NATO. Ukrainian drone strikes in Russia—some close to Moscow—failed to provoke Russian escalation. And while Russia moved some nuclear-capable aircraft into Belarus, a failed mutiny by its mercenary Wagner group exposed Putin’s growing military weakness.
U.S. escalation also reflected growing fears that Russia may have established an unshakeable grip over the Russian-speaking provinces in Ukraine’s east and over the land bridge south of the Dnipro River to Crimea and its naval base at Sevastopol. In April, leaked Pentagon documents revealed that Biden had broken his promise not to send in troops by sending special forces to Ukraine. The documents also revealed the Pentagon’s own doubts about Ukraine’s ability to mount a successful counter-offensive. Not only had a stalemate been reached along the Dnipro River, but Ukraine was expending so much ammunition that it had created a global shortage, forcing the U.S. to go hat in hand to allies such as Israel and South Korea in search of more.
By the end of the year, U.S. military aid since the Russian invasion had topped $44 billion. But further aid has been throwing into doubt as conservative Republicans, who earlier in the year threatened to scuttle Pentagon funding (and shut down the government) if Biden failed to agree on budget cuts, threatened to scuttle aid unless Biden agreed to tougher restrictions against immigration. Time, as some argued at the outset of the Russian invasion, may indeed be on Putin’s side.
The war in Ukraine has also helped reinforce a new Cold War mentality across Europe, with fears of a renewed Russian menace rekindling the NATO alliance. After the White House approved the sale of F-16s to Turkey, Ankara lifted its opposition to NATO adding Finland as a member, opening a new, 1,300km front line between NATO and Russia. Europe’s newfound fear of Russia was accompanied by an increased U.S. presence, with new bases in Romania and missile-tracking systems in Eastern Europe. Europe also went onto war footing, with Germany sending troops into Lithuania and, as part of a Patriot battery, Poland. Germany and the U.K. joined a parade of NATO members in sending tanks to Ukraine, and London splashed out for new attack submarines to counter not only the threat from Russia, but also from China.
The war and the artillery shortages it caused has raised fears about how prepared NATO and the West might be to fight a war with Russia and its apparent allies, China, Iran, and North Korea. Indeed, hawks in Washington seemed increasingly intent on painting China into a corner for its rhetorical support of Moscow and continued refusal to condemn its invasion of Ukraine. Evidence that Russia has been using dual-use equipment made in China–small drones in particular—in Ukraine have bolstered such accusations. China’s President Xi Jinping didn’t help matters by staging a trip to Moscow in search of what he said was a diplomatic solution, but which hawks in Washington decried as a powwow. China and Russia continued to hold joint wargames in the Pacific, with Russia deploying a coastal missile-defense battery to the Kuril Islands and China’s defense minister pledging increased military cooperation with Russia. While the White House accused Beijing of contemplating military aid to Moscow, Beijing ultimately sought to curtail drone exports to Russia in an apparent effort to mollify Washington.
Nevertheless, Washington continues to see China as a growing military threat. China’s plans to boost defense spending by 7% to align its military strength with its economic influence reinforced growing hawkishness on Capitol Hill, where the House of Representatives has established a committee dedicated to countering the China threat, the Select Committee on Strategic Competition between the United States and the Chinese Communist Party. The Pentagon expressed alarm at China’s rapid expansion of its nuclear arsenal and its increasingly aggressive military maneuvers around Taiwan. While leaked Pentagon documents revealed new evidence that the U.S. spies on both rivals like China and allies like South Korea, new evidence of China hacking the U.S. inflamed relations. Tensions flared further when a Chinese surveillance balloon strayed across the continental U.S. China, meanwhile, has built up the world’s largest coast guard, which it is using to press territorial claims to the entire South China Sea, raising tensions with its Southeast Asian neighbors, especially the Philippines.
The U.S. has responded by ramping up its own naval operations around Taiwan, raising China’s fears that Washington might end its longstanding agreement that Taiwan, while self-ruled at present, is ultimately part of China. Matters weren’t helped by revelations that the U.S. inserted Marines into Taiwan under former President Donald Trump, and that Biden had increased their number. Still, increased military aid to Taiwan to ward off any potential China invasion has become caught up in the funding battles on Capitol Hill.
China’s increasing assertiveness on atolls near the Philippines helped pull Manila back into the American orbit. Philippine President Ferdinand “Bongbong” Marcos Jr., who had been leaning like his predecessor toward China, expanded a defense cooperation agreement with Washington that expands the ability of U.S. forces to use bases in the Philippines and even grants fellow U.S. ally Japan similar rights. The U.S. and the Philippine navies have begun joint patrols in the South China Sea.
Similar concerns about China’s ambitions have bolstered alliances between Washington and Tokyo and between Washington and Seoul, even drawing those two Asian rivals closer together. South Korea’s affinity for Washington has been accelerated by the increasing number of missile tests from Russia ally North Korea. North Korea’s missile program prompted Seoul to ask, yea demand, that the U.S. step up its nuclear deterrent around South Korea, prompting Biden to promise to start stationing nuclear subs there. Already funded by billions of dollars raised from cyberattacks, however, North Korea won technical support from Moscow by shipping it ammunition to replenish stocks depleted in Ukraine and is perfecting an intercontinental ballistic missile capable of reaching the continental U.S.
Tehran has used the war in Ukraine to nuzzle more closely to Russia and gain leverage against the U.S. Iran has been supplying Russia with drone technology, if not drones themselves. War in Ukraine gave Tehran space to be more assertive elsewhere. Tehran at one point began seizing oil tankers in the Gulf, prompting the U.S. to send naval forces in to stop it.
A similar scenario is now being played out in the Red Sea. Iran has long been funding Islamist militias in the region, including Hezbollah in Lebanon and Shia militias in Syria and Iraq. It has been accused of not only training and weapons, but also advice to Hamas for its Oct. 7 attack on Israel. After Israel retaliated in Gaza, Iran-funded militias around the region began attacking U.S. troops stationed in Syria and Iraq. Iran’s proxies in Yemen, the Houthis, began attacking commercial vessels in the Red Sea, prompting the U.S. and its allies to forge a naval task force to protect traffic to and from the Suez Canal.
The world has thus become an even more dangerous place in 2023 from the American point of view. While the U.S. justifies its expanding global military presence as vital to the survival of South Korea and Japan, Taiwan, Southeast Asia, Israel and the Gulf states, Ukraine and Eastern Europe, that expanding role in and around nations that don’t welcome it has also contributed to rising tensions. By using its military as its principal instrument of diplomacy, the U.S. feeds a self-fulfilling narrative of global peril, providing justification to both hawks in Washington and its enemies abroad. With so many enemies on so many fronts, U.S. military might is being stretched to the breaking point, with the Pentagon warning of dangerous ammunition shortages.
The U.S. is meanwhile girding for a final showdown, developing new and advanced weaponry like swarms of AI-guided drone wingmen and laser cannons, as well as more powerful nuclear bombs that can penetrate poor weather and the strongest ground defenses. The military is also developing a networked umbrella of anti-missile systems that in theory could render the U.S. homeland—and its closest allies—nearly invulnerable to the kind of nuclear missile attacks that have provided the only realistic check to American power. The only technology that yet eludes the U.S. seems to be hypersonic missiles like those already deployed by Russia.
America’s mounting military commitments are challenging enough without contending with funding threats from the very government that’s making them. But right-wing conservative Republicans in Congress, traditionally some of the most ardent supporters of U.S. military intervention, have become a major obstacle. While one group of Republicans has urged speedier aid to Taiwan, others are questioning U.S. aid to Ukraine, and fiscal conservatives have threatened to block funding to the Pentagon and even shut down the U.S. government if their demands for budget cuts aren’t met. Most recently, Republicans have held military funds hostage to their demands for tougher restrictions on immigration. Whatever narrow domestic political agenda this brinkmanship might serve, it only reinforces fears among America’s allies that it lacks the political consistency to support its claims to global leadership.
Where U.S. politicians seem to find common ground is in their mistrust and animosity towards America’s largest economic rival, China. As it girds for battle with China, Washington has also declared economic war against it, with President Biden extending Trump-era tariffs and adding his own restrictions on technology exports as part an effort to reduce American reliance on China’s economy for manufacturing and components. Congress wants even more. Consequently, Mexico has overtaken China as America’s largest trading partner.
Falling U.S. trade and global exports might not matter much if the world’s second-largest economy didn’t already face dire problems of its own making. China faces a shrinking population, record youth unemployment, falling productivity, declining manufacturing, shrinking profits, diminishing foreign investment, and accelerating capital outflows. But worst of all is the mess in its property market, where a credit-led investment and building boom has left it with a glut of empty and unfinished buildings and a massive bubble of debt that has left its biggest developers and many provincial and local governments—not to mention individual households—on the brink of insolvency. That has resulted in tightening credit, triangular debt and rising defaults that are worsening the downturn and which have sent China into what could become a deflationary spiral.
The hope was that domestic consumption would bail the property sector out once China’s Covid restrictions lifted, but that hasn’t materialized as consumers respond to the bleak outlook for property and job growth. Calls for the government to open its fiscal taps to stimulate growth have gone unheeded, as Beijing resists deficit spending in favor of lowering restrictions on property investment and credit to developers. The government has instead embarked on a campaign of misdirection about the nation’s economic prospects, browbeating analysts and economists issuing negative appraisals and simply withholding economic data that don’t support its assertions that all is well. Instead of bold economic leadership, China’s Communist Party and its leader, Xi Jinping, increasingly seem to be turning what started as a campaign to root out rampant corruption into a self-defeating purge of dissent, heterodoxy, or even insufficient optimism.
China’s plight might be cause for celebration among its detractors in Washington and elsewhere were it not for the fact that China represents the lion’s share of global economic growth and, as the world’s second-largest source of greenhouse gases, is vital to efforts to halt climate change. One of the most likely outcomes of its predicament is a decades-long period of economic stagnation reminiscent of Japan’s “lost decades.” While that represents a bleak future for a nation where per-capita incomes remain below $20,000 a year, it could be the most benign outcome from the world’s point of view. Because a credit crisis in China would reverberate throughout the global economy, increasing geopolitical tensions and raising the risks of humanitarian crises.