Happy fun Cold War 2 update

It's getting a little warmer out there.

OK fine, I lied. This Cold War 2 update is neither happy nor fun. But it is necessary and important.

Half a year ago, when I wrote that a lot of what we see in the news can be explained by the existence of a cold war between a China/Russia bloc and a democratic bloc, it was a controversial thesis. Now it’s becoming conventional wisdom, and attention is shifting toward how to prevent Cold War 2 from becoming World War 3.

Diplomat and international relations professor Philip Zelikow has a truly excellent essay about our present moment in geopolitics, which I encourage you to read. He argues that the Axis, the Soviet-China partnership at the beginning of Cold War 1, and the present quasi-alliance between China, Russia, Iran, and North Korea all have much in common. Their overriding goal is to topple the United States. This means that the U.S. can’t simply withdraw behind its oceans and adopt a posture of isolation or neutrality; the U.S. itself, and its power and wealth, is the target.

Zelikow also argues that the mid-2020s are very similar not just to the 1930s (as everyone talks about), but also to the late 1940s and early 1950s. In those decades, a third world war almost broke out between the U.S. and the USSR/China. The Korean War happened, China invaded Korea as part of that war, and the USSR almost invaded Yugoslavia. Only strong deterrence by the U.S., the caution of Stalin and Mao, and distrust between the USSR and China averted the danger. Now, Zelikow argues, we’re in another critical period. It all depends on the choices of the leaders of the New Axis (my term, not his), and here he is not optimistic:

I believe the anti-American partnership has probably decided to double down. They are probably preparing in earnest for a period of major confrontation. My view on this rests on my analysis of the history presented above as well as some key assessments of Moscow, Tehran, Beijing, and — to a lesser extent — Pyongyang.

Xi and Putin regard themselves as world-historical men of destiny. They believe they are capable of decisive, strategic action. Xi ranks himself with Mao and Stalin. Putin evokes the memory of Peter the Great. In China, Russia, and Iran the information and decision environments are cloistered…In China, Russia, and Iran the propaganda ministries have already been preparing their populations for a time of war, great sacrifice, and existential struggle.

And he warns that the U.S. no longer has the industrial strength to win a direct confrontation, as it did in former conflicts:

China is preparing for war. I am not saying it seeks a war. But, publicly and privately, the Chinese Communist Party is mobilizing its country for one…For the last 10 years, China has been working hard on preparing and refining its plans for national defense mobilization…One lesson to them from the Ukraine war is the shallow and fragile character of the U.S. defense-industrial base. Chinese manufacturing capacity now exceeds both the United States and Europe put together…There is little net public support in the United States for further big increases in defense spending beyond current levels. Yet despite an uptick in spending after Russia’s invasion of Ukraine, Michael Brown notes that “America has a smaller military with older and less equipment than at any time in memory.”

He predicts that China will move on Taiwan with a blockade rather than an invasion, attempting to bring the island to its knees by simply asserting that it’s a Chinese province and daring any outside powers to treat it otherwise. An invasion would be extremely difficult and risky, and would definitely generate huge losses for the world economy, with China itself being hard-hit. A blockade, in contrast, would dare Taiwan and its protectors to make escalatory moves, while at least offering the possibility of a cheap, bloodless conquest.

In the past few weeks, a number of events have occurred that strongly support Zelikow’s core arguments and predictions. In response to the election of a new Taiwanese president, China has surrounded Taiwan with warships, obviously conducting a dry run for an actual blockade of the type Zelikow describes. And Russia is making a number of aggressive moves toward NATO countries, signaling that he won’t be satisfied with conquering Ukraine.

Let’s go through some of those scary developments.

The New Axis is making moves

Taiwan recently had an election. Basically, in Taiwanese politics, you have two main parties — the KMT, which favors a more conciliatory approach toward China and closer engagement, and the DPP, which favors distancing Taiwan from China. The KMT won the legislature, while the DPP — thanks in part to a third-party spoiler candidate — won the presidency. (The outgoing president, Tsai Ing-wen, was also DPP, but she was termed out.)

In his inaugural speech, the new DPP president, Lai Ching-te, urged China to leave Taiwan alone and alluded to the island’s autonomy, while falling short of asserting Taiwan’s formal independence — a pretty standard DPP position. But whereas in the past, China reacted with annoyance and protests to such speeches, this time it surrounded Taiwan with warships:

Source: AFP

This is obviously a rehearsal for a real blockade — the exact thing that Zelikow predicts. Not only are they a rehearsal in the sense of being a training exercise, but repeated almost-blockades of this type might lull both Taiwan and the U.S. into being surprised when the real version comes.

Meanwhile, China is making various other moves that look an awful lot like military preparations. It’s preparing a large armada of ferries to support a possible amphibious assault. It’s stockpiling copper, iron, food, and energy. It’s buying up gold and reducing its official holdings of U.S. government bonds, an obvious hedge against financial sanctions. And so on.

Also, consider Chinese government rhetoric. The government’s main TV station is beating the war drums pretty hard:

China is also issuing threats toward Japan, which is likely to get involved in a Taiwan conflict due to its own strategic vulnerabilities. China’s ambassador to Japan declared that "once the country of Japan is tied to the tanks plotting to split China, the Japanese people will be brought into the fire.”

U.S. intelligence also believes that China is now working closely with the Russians on a Taiwan invasion scenario:

US intelligence officials assess that Russia and China are working more closely together on military issues, including a potential invasion of Taiwan, prompting new planning across the government to counter a potential scenario in which the countries fight in coordination.

In other words, if U.S. intelligence is correct, an attack on Taiwan is likely to trigger a more general attack on democratic countries by the China-Russia axis.

Russia appears to be preparing for a more general confrontation with NATO in Europe. It recently removed the river buoys demarcating its border with Estonia. Estonia is the NATO country that’s probably first in line to get invaded if Russia goes to war with NATO, given its small size and population, its exposed geographic position, and its large population of Russian speakers whose existence could provide Russia with an excuse for an attack.

Meanwhile, Russia is stepping up what appears to be a sabotage campaign against Europe. Poland’s prime minister has declared that Russia was likely behind the burning of a shopping mall in Warsaw, and many suspect that it was also behind a fire at Novo Nordisk’s headquarters in Copenhagen. This is in addition to various other aggressive moves. It’s not clear what all this is supposed to accomplish — scaring Europe into disunity and inaction, perhaps? — but it certainly seems to indicate an aggressive Russian posture toward NATO.

The reason Putin can be so confident in this slow-building aggression is that he knows his superpower ally has his back. Putin recently went to meet Xi in China, and the two promised to strengthen their “no limits partnership”. Xi even gave Putin a hug — a rare sign of personal affection from a Chinese leader.

And there’s evidence that those words are being backed up with deeds. China is buying huge amounts of Russian oil, keeping the company’s economy afloat. It’s selling the Russians huge amounts of dual-use technology to keep its military machine humming despite Western sanctions. And the UK now believes that China is providing or preparing to provide Russia with lethal aid — actual weaponry — for the Ukraine war.

In other words, Zelikow appears to be absolutely right that the Xi-Putin partnership is a much more solid and active alliance than either the WW2 Axis or the Stalin-Mao cooperation in the early years of Cold War 1. Dreams of severing Russia from China by offering it Ukraine on a silver platter were always highly unrealistic, but now they’re just utterly laughable. Nor will the threat of sanctions be sufficient to deter China from supporting its ally’s war effort forever.

And Zelikow also appears to be absolutely right that this alliance has the strategic initiative — China and Russia are making all the moves, and the U.S. and its allies are scrambling to respond. Yet respond we must.

What the U.S. and its allies can do right now

Zelikow is not the first international relations scholar to identify the present moment as a crisis that will determine what type of conflict will unfold between the New Allies and the New Axis. In his book Danger Zone with Michael Beckley, my former colleague Hal Brands argues that cold wars are characterized by early pivot points or crises that can easily mushroom into all-out war. Only by shoring up deterrence and defining boundary lines can a cold war go truly cold — it’s a sprint of a few years, followed by a marathon of a few decades.

Most of what I write about Cold War 2 is about what the U.S. needs to do in order to prepare for the decades-long marathon. Reviving U.S. manufacturing, restoring state capacity, strengthening old alliances and building new ones, maintaining America’s technological edge, and so on — these are all efforts that would take many years to accomplish. Fortunately, I see a lot of other people coming to similar conclusions. For example, Matt Yglesias has an excellent post about how long-term national security requires us to embrace high-volume skilled immigration and expand trade with allies and potential allies:

The economics of the New Cold War

But as crucial as these policies are, they will not get us through the “sprint” of the 2020s. The threat of world war is so imminent that even if we do all the long-term things right, we still have to figure out a way to deter China from attacking Taiwan in the short term.

One thing the U.S. can do, as Elbridge Colby has argued, is to prioritize Asia over either Europe or the Middle East. This seems counterintuitive, since Asia is not currently at war, but Ukraine and Israel are. But the argument is based on capabilities rather than current events. China is the world’s manufacturing powerhouse and could defeat all the other countries in Asia all on its own; Russia is a mid-sized power who couldn’t hope to match the combined efforts of the European countries if they were to lend their full industrial strength to Ukraine. And the Middle East is simply strategically unimportant.

The U.S. is more badly needed in Asia than anywhere else, and it’s there we should concentrate our greatest attention and efforts. Europe simply has to step up and take the lead role in its own defense.

At the same time, the U.S. should not abandon Ukraine aid. In my roundup this week, I cited a Brian Potter article about how the U.S. was able to build up its defense industries before World War 2 broke out, so that it was prepared for the war when it came. One crucial factor, Potter writes, was demand for armaments from Britain and France:

The first push to grow the U.S. aircraft industry came well before the U.S. entered the war. Desperate for more planes to counter Hitler’s territorial ambitions, both Britain and France placed large orders with U.S. aircraft manufacturers in 1938 and 1939…This allowed U.S. aircraft manufacturers to greatly expand their workforces, and industry employment tripled between 1938 and 1940. The orders also enabled manufacturers to build new, larger factories…

[I]n 1941 the U.S. passed the Lend-Lease Act, which authorized $7 billion ($149 billion in 2024 dollars) to supply Allied nations with supplies and military equipment, including aircraft.

The Ukraine war is an important source of demand that will allow U.S. defense producers to invest and ramp up production. Without it, the U.S.’ defense manufacturing weakness would never have been brought into the light; now, thanks to Ukraine, the U.S. is increasing ammunition production. The ramp-up is still far too slow, but at least it’s something. Remember that factories that are built to provide weapons to Ukraine can easily be repurposed to provide weapons to Taiwan in case war breaks out there.

But no matter what happens, the U.S. is going to have to spend more on defense. This is going to be a difficult, bitter realization for many progressives who have spent their entire lives believing that America vastly outspends its rivals on defense, and that we should therefore cut defense spending in order to boost welfare spending. But a proper accounting shows that the U.S. no longer outspends its rivals by a substantial amount. And defense has shriveled as a percent of U.S. government spending, decade after decade. The progressive conventional wisdom of the 1990s no longer holds.

Brian Riedl has a short but excellent article explaining why even in an age of high interest costs, the U.S. needs to keep spending on its military:

Progressives like Sen. Bernie Sanders decry that the “bloated defense budget” is crowding out other priorities…Similarly, many on the populist right cling to Ukraine aid as a lead driver of deepening debt, with Ohio Sen. J.D. Vance going so far as to tie Ukraine aid to Social Security’s looming insolvency. Such criticisms…ignore looming threats to our national security and obscure the reality that America is falling behind…

Defense has long been the slowest-growing category of federal spending…American military readiness is declining due to stagnant budgets, mismanagement, and escalating costs…

Nor is Ukraine aid busting the budget—in fact, it’s barely a rounding error over the long run. The $175 billion allocated to this initiative over three years ($58 billion annually) averages 0.2 percent of GDP and 0.9 percent of federal spending….$300 billion…will end up only 0.2 percent as large as the $116 trillion Social Security and Medicare shortfall…

Moreover, much of what is categorized as “Ukraine aid” stays in the U.S., replacing, upgrading, and modernizing American military supplies…. The United States sends Ukraine its older munitions that needed replacement anyway, and then spends much of the Ukraine-assistance funds replenishing and modernizing its own supplies…

[I]t is imperative that the Defense Department streamline procurement policies, become much more cost-efficient, pass an audit, limit the spiraling growth of compensation costs, and shed all non-essential, politically driven congressional mandates. But the progressives and populists calling for defense spending to (once again) decline sharply and absorb much of the burden of deficit reduction and new social spending expansions should be dismissed.

Finally, perhaps the most important thing the U.S. can do in order to get through the crisis of the 2020s is to not elect Donald Trump this November. Although Trump is a mercurial man whose behavior is hard to predict, his political support base is strongly opposed to Ukraine aid, and his flip-flop on the TikTok divestment bill shows that China and its proxies can easily sway Trump with money. Furthermore, his utter disregard for alliances in both Europe and Asia shows that he doesn’t understand how small U.S. manufacturing capacity is relative to China — he has no idea that the U.S. needs as many allies as possible in order to match China’s industrial might.

So the U.S., and the free world in general, now find ourselves in an extraordinarily dangerous moment in world history. A New Axis is on the march, and in many ways it’s stronger than any of the autocratic coalitions that America faced in the 20th century. Meanwhile, the U.S. remains burdened by institutional weakness and riven by internal social conflict. We need to take Cold War 2 much more seriously than we are currently taking it.

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