Month: November 2018

Key Points:

• National security and foreign policy strategy are unlikely to slow as a result of election outcome
• Cooperation and competition with China will remain a primary focus for the Trump administration
• Russia and the degrading stability in Ukraine require international attention

Background:

On Tuesday, an unusually high level of Americans flocked to the polls, casting their ballots in a critical election for President Trump and his administration. In the end, the Republicans remained in charge of the Senate, but the Democrats gained a majority control of the House.

What has happened:

With the change in the House, we can see a shifting relationship between Congress and the White House that could take the wind out of the sails of the administration’s international efforts. The House will poke and prod, trying to find legal openings to put the administration on its heels. Those efforts will require attention and energy from the White House to address, but global engagement will continue. In fact, the pace of international affairs will increase…the clock is ticking as the nation approaches the 2020 Presidential elections. That’s right, the 2020 campaign is now underway.

Why it matters:

China
General Marks: Tariffs dominate the discussion and are defining our relationship with Beijing. However, expect to see more U.S. efforts towards engaging tactically with China and its military. The U.S. will include allies and partners in those efforts as trust measures are established and validated. Additionally, we need China to help with our stalled efforts vis-a-vis North Korea and its nukes.

Peter Tchir: Moving forward, tariffs and trade with China will be the focus, unfortunately, pushing North Korea to the backburner. As of this morning, it is unclear how President Trump plans to react to the elections in regard to negotiating a trade deal. Do we go for an ‘easy’ win, where China agrees to buy our commodities (soy, LNG, etc.) ahead of the Democrats taking over the House, or does this incentivize the President to dig in his heels and go for an aggressive deal (which could take time and be disruptive)?

Russia
General Marks: Russia is contributing to the civil war in Ukraine and the world pays no attention. Crimea is gone and will not return but the Donbass region in eastern Ukraine could follow Crimea into Moscow’s hands. The U.S. and the E.U. must act together now. Congress must get behind the administration’s efforts, even if they are exploratory. The rationale to support the independence of Ukraine is unimpeachable. Russia will continue to push into the Baltics.

Peter Tchir: Ukraine issued $2 billion in bonds last month, which the market is taking as a sign of normalization, but if General Marks is correct, the market is being far too complacent of the risks associated with Ukraine.

General Marks: The U.S. must engage with Russia to find a way out of Syria that allows our national security objectives to converge. Cooperation is possible. Who follows Assad? Washington and Moscow must find that answer together.

Iran
General Marks: This administration will not tolerate Iran’s efforts to create a nuclear capability… and let’s assume Iran has not already achieved a nuclear capability without our intelligence community’s knowledge. Sanctions will have little initial impact over the next six months, but the pain will begin to set in as we approach 2020. The U.S. will stay connected with partners and allies to ensure sanctions can become more punishing. That’s a long shot but must be the desired outcome.

Peter Tchir: The concept of ‘safe’ energy suppliers should not be overlooked. We should be working hard to encourage countries to rely on U.S. oil and LNG exports as a stable supplier.

Read Our summary of The Intersection of Geopolitics and Energy Here

E.U.
General Marks: More nations will start to cut their own deals for Russian oil and gas. The U.S. must make U.S. oil exports more readily available as an alternative to the E.U.’s dependence on Russia.

Summary Post mid-terms the pace and direction of international engagement by the Trump administration will increase. Our Congress will “investigate and legislate” with the White House as its strategy, but do not expect to see a greater amount of gridlock. Expect business as usual, especially on the international stage.

 

Original Post 11/13/2018