Since its publication last Friday – launched without fanfare in the early hours of the morning – the United States’ (US) new National Security Strategy (NSS) has unnerved European allies and encouraged Russia in equal measure. It is true that the NSS marks a significant departure in terms of recent American statecraft, but many of the deeper underlying and structural elements of the NSS have been emerging, across successive American administrations, for some years. In this ‘Reframer’, we ‘disrupt’ orthodoxy and ‘reframe’ emerging narratives surrounding the new US strategy.

With the NSS, isn’t the US becoming isolationist?

No. The NSS is in no way isolationist; it is simply more selective regarding the theatres in which the US will focus its power and resources. Over the past few years, the destabilising activities of non-state actors, such as drug cartels, and the increasing encroachment of Chinese economic and geopolitical influence, have undermined America’s position in its own hemisphere.

For these reasons, the NSS prioritises Central and South America, where – using language that might make James Monroe or Theodore Roosevelt blush – it asserts ‘absolute American pre-eminence’ will be re-established. While this may appear to be a departure from recent US statecraft, America has always kept a keen eye on events in its own backyard.

The shift, therefore, is not that the Western Hemisphere is now America’s primary focus, but that the resources required to secure US interests there have grown. This necessitates a degree of retrenchment in American force posture elsewhere. Without dominance in the Western Hemisphere, the US cannot project power without placing its homeland at unacceptable risk. This mirrors the United Kingdom’s (UK) ‘NATO [North Atlantic Treaty Organisation]-first’ approach; Britain has always prioritised the defence of the Home Islands, but the quantity of resources required to secure them has ebbed and flowed depending on the level of the threat.

This does not represent an abrogation of other regional interests; the new US strategy is clear that America retains strong interests in a number of regions, particularly the Indo-Pacific. Instead, it is a reaction to hemispheric neglect, which threatens Washington’s ability to pursue its wider objectives.

Okay, but surely the NSS is hostile to the rules-based international order?

Yes, to an extent. The NSS explicitly rejects previous American attempts to create an integrated, inclusive, multilateral world system during the post-Cold War era. Even more forcefully, the new strategy argues that this agenda – sometimes known as ‘globalism’ – weakened the US national powerbase and empowered potential adversaries. The NSS recognises that hostile nations, notably the People’s Republic of China (PRC) and Russia, have exploited the current order to the point of capture, and now seek to reconfigure it in their own image.

But to end support for a specific vision of order is not to terminate the quest for all order. Rather, the NSS seeks an international order that is more exclusive, one which prioritises America and its allies and partners more than its competitors and adversaries. It is very clear on this:

The United States must work with our treaty allies and partners...to counteract predatory economic practices and use our combined economic power to help safeguard our prime position in the world economy and ensure that allied economies do not become subordinate to any competing power.

Moreover, by framing the PRC not merely as a geopolitical rival but as an economic predator, the NSS frees the US to use tools that were previously considered taboo. It calls for American ‘reindustralisation’, ‘energy dominance’, and financial and technological supremacy. It signals a shift from accepting predatory geoeconomic practices within the global order to threatening to marginalise those – particularly the PRC – whose practices are not in line with US interests. And it marks a transition from seeing the economy as distinct from state direction to its inclusion as an explicit element of statecraft. To countries used to an America that long championed the virtues of free trade, this change in approach is being interpreted as hostile.

Whatever; the NSS turns America into an untrustworthy ally!

Does it? The US has often been accused of selfishness and unreliability: the British were deeply unhappy with the McMahon Act which terminated nuclear sharing in the aftermath of the Second World War, just as they were furious with America’s economic blackmail during the Suez Crisis. Any country’s actions, even an ally’s, can appear to make it ‘untrustworthy’ when it embraces policies that may not be in keeping with another ally’s national interests. And when the ally in question gives plenty of warning of its long-term intentions, and when it states that the cost of the common defence is egregiously lopsided, can it really be described as untrustworthy?

In the case of the NSS, Britons and Europeans can hardly claim ignorance that American policy was evolving and that the post-Cold War consensus would not continue indefinitely. For many years, the US has warned its British and European counterparts that they have wider priorities than the Euro-Atlantic. Robert Gates, as Secretary of Defence in 2011, told Europeans – forcefully and clearly – that he was the last of the genuinely Atlanticist generation of Americans, and that future generations would prioritise other issues and geographic theatres. The UK has done little to prepare for this change; similarly to European countries, it has held defence spending down and allowed its capacity for autonomous action to weaken.

But doesn’t the NSS seek to undermine Europe?

That remains unclear – but Europeans have questions to answer. From the perspective of European capitals, the NSS appears remarkably soft on Russia. Rather than pinning the blame on the Kremlin for launching the worst European conflict for 80 years, it talks of re-establishing ‘strategic stability’ and calls for an ‘expeditious cessation’ of hostilities.

Worse, the NSS targets the European order – especially the European Union (EU) – which it blames for undermining European national self-confidence. Critics might reasonably argue that the strategy merely reflects the interests of US ‘Big Tech’, which often appears to see the EU, in particular, as nothing more than a regulatory obstacle.

But more is at play here. The NSS is not anti-European: it explicitly states that ‘Europe remains strategically and culturally vital’ to the US and it wants European allies with ‘economies and militaries strong enough to remain credible allies.’ Here, the Americans have a point. During the Cold War, America’s British and European allies were both far stronger and did relatively more in support of the common defence effort.

As such, the NSS throws down the gauntlet to Europeans. The EU has stagnated – as the Draghi Report itself identified in 2024 – and its share of economic output has declined markedly in recent years. Since 2005, the EU’s share of world economic output has plummeted from almost 30% to approximately 17% – one of the steepest declines of any region in history. It is perhaps a point of irony that the greatest proponents of the old order, European countries, are those who have weakened most under it.

So, far from seeking to undermine Europe, Washington in fact desires meaningful allies and partners, not satrapies and security consumers. While the language is abrasive, the NSS seeks to jolt allies out of their complacency. The positive American approach to Poland, with a growing economy and defence effort, reflects this.

Right, but isn’t it time for Britain to throw its lot in with the EU?

Is that the only option? One British response to the new NSS would be for the UK to double down on the EU and the existing European order. But, many European countries have hardly been dependable allies: Germany was slow to react to Russia’s full-scale invasion of Ukraine, and France has been stubbornly resistant to broadening the EU’s defence industrial base to include British-based companies, despite their centrality to the defence of Europe. Indeed, it was the financial flows and geopolitical complacency of several European states that enabled Russia to modernise its military, fostering the Kremlin’s conviction that a full-scale invasion of Ukraine would go unpunished. Since February 2022, European countries have also sent Russia more than three times as much money in hydrocarbon payments as they have sent to Ukraine in aid.

Would support for this struggling order in Europe serve British interests? In this sense, America’s NSS should be seen as an opportunity for the UK: what Britain needs now is a geopolitical ‘third way’ that dusts off the assertive realism of Ernest Bevin. Of course, as the NSS indicates, Britain can no longer harness America’s awesome power through North Atlantic Treaty Organisation (NATO) to smother geopolitical competition in Europe in the way it has previously.

Instead, the UK should lend its weight to the creation of a new order that it proactively leads. This will require re-imagined coordination with the US, renewed investment in the UK’s instruments of power, and the re-invigoration of the British national powerbase. The AUKUS security partnership should be seen as the perfect template: it draws in the US in a way that is supportive of American interests; benefits the UK’s defence industrial base; and shapes the international order in harmony with British preferences. Could a new vanguard for NATO be fashioned from the Joint Expeditionary Force with a number of additional ‘enhanced partners’?

To sum up, in some ways, America’s NSS echoes Britain’s own National Security Strategy, which calls for ‘a hardening and sharpening of our approach’, as well as for enhanced forms of ‘economic statecraft’. While not entirely on the same page, both powers are increasingly cognisant that their economic and strategic wellbeing requires a more exclusive order – one capable of blunting the ambition of hostile states.

William Freer is Research Fellow (National Security) at the Council on Geostrategy.

James Rogers is Co-founder and Director of Research at the Council on Geostrategy.

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As the United States (US) presidential campaign enters the final week, Donald Trump has a ‌fair chance of winning the presidency. Routinely denounced by his opponents as a fascist and dictator, foreign policy analysts often view Trump as a grave danger to the open international order. His respectful – often appreciative – comments on tyrants in Moscow, Beijing and elsewhere and his unabashed ‘America First’ agenda fuels concerns that a Trump-led America will go ‘rogue’. Much of this critique comes from Europe, which is more vulnerable now than in 2016 and which fears Trump’s impact on trade, green policies, and security – especially the North Atlantic Treaty Organisation (NATO) and Ukraine. But are these trepidations fully justified? Here, we attempt to ‘disrupt’ orthodoxy and ‘reframe’ outmoded thinking about Trump’s approach to foreign affairs.

Does Trump even have a foreign policy ‘doctrine’, or is he simply a loose cannon?

Actually, he does. He laid it out during the 2016 campaign, in several foreign policy speeches (27th April, 13th June, 15th August and 7th September 2016) and interviews (especially the 26th March 2016 interview with the New York Times). In office, he broadly acted in line with the approach he had outlined, and now he is holding to the same philosophy. 

His first priority is economic growth: making America even more prosperous. This imperative subordinates everything else. With a powerful, revitalised US economy, Trump thinks he will be able to pay for a much stronger military and dictate​ terms to everyone else in the world while retaining the option to ‘walk away’ from any negotiation. Domestic economic policy – tax and spend – is one half of the story here. The other comes in the form of reducing overseas costs: allies should ‘pay’ more for US protection, either by serious burden-sharing and/or purchasing American weapons. There is no way around this.

In office, Trump emphatically wanted to rebuild the US military for ‘unquestioned’ dominance – and his administration moved forcefully in that direction, especially during Jim Mattis’s tenure as US Secretary of Defence. The guiding star of Trump and his key advisers is ‘Peace through Strength.’ Building up US space power is particularly high on his agenda, given his attachment to the Space Force he created, and his close ties with Elon Musk. In any case, accelerating US rearmament – while also reforming the Pentagon – will be not just welcome, but essential if the continued aggression of the ‘CRINK’ (People’s Republic of China, Russia, Iran and North Korea) is to be checked.

The third pillar of Trump’s approach is an explicit rejection of ‘globalism’ and endorsement of the nation state. In his words, ‘international unions tie us up and bring America down.’ Trump’s low regard for organisations which are dysfunctional or slow to act – such as the United Nations (UN) or the European Union (EU) – has likely only deepened. With his belief in the primacy of power in international relations, Trump sees multilateralism as a distraction and obstruction from sorting out geostrategic problems by direct US engagement with the key actors. He wants to cut through the thicket of ‘secondary’ allied interests to go straight to the deal with the ‘principals’.

In short, Trump’s foreign policy instinct is to engage in power politics. He represents a revival of Realpolitik, particularly the willingness to negotiate with adversaries and find a stable balance of power, similar to the post-1815 Congress System. It might be disagreeable to some, but it is a coherent worldview.

Would not a Trump victory be a calamity for America’s allies and the world?

Not necessarily. His ultimate aim is restoring clear US dominance in the international system, believing that ‘the world is most peaceful and most prosperous when America is strongest’ – which is true. Contrary to Barack Obama, in particular, who presented America as an ‘ordinary nation’ and took a collegiate approach to allied relations, Trump reverts to an older understanding of American ‘exceptionalism’. In his view, the US has a special licence – and responsibility – for running world affairs, with allies’ supporting this effort.

Trump divides the world into friends and enemies, and wants to keep the order by cutting deals from a position of strength. He has a classic, mid-century concept of the ‘West’ and its values – best articulated in his 2017 Warsaw speech – and therefore of who is on the ‘good’ side and who is on the ‘bad’ side of the foreign policy ledger. Ultimately, he wants America – and his ‘camp’, i.e., the ‘free world’ as he understands it– to win in any negotiation.

The notion that Trump would willingly cede strategic US-held positions to rivals such as Russia, Iran or the PRC, and that he would accept to be the president who ‘lost’ Europe, the Middle East or the Western Pacific, is not credible. Whatever negotiations he will pursue in these three regions, he will want to get a good deal.

In Ukraine, according to a report by Keith Kellogg and Fred Fleitz, two of his closest advisers, that might involve threatening Russia with escalating US support for Kyiv in order to create leverage. Then, Europe will have to step up – but that would be the case in any scenario, Trump or not.

On NATO, Trump’s demands for higher European spending are common sense and hardly unjustified. We have been here before, and in his first term, Trump ended up strengthening NATO by expanding the funding for the European Defence Initiative. He is not against NATO, but he thinks it must prepare to keep Russia at bay.

On Iran and the PRC, again, Trump’s hardline track record is clear and he will likely resume similar confrontational policies – while leaving room for talks – if he returns to office. A maximum-pressure approach on Iran and its proxies, with full backing for Israel’s right to defend itself, is vital for containing the threat in the Middle East. Meanwhile, Trump’s ‘China policy’ is likely to only sharpen, both on the military and on the economic fronts.

Right. So, a Trump presidency means the ‘withdrawal of American leadership’?

Not at all. It certainly did not in his first term in office, when, for example, America led global efforts to expose the reality of Chinese power and to push back against Beijing’s attempts at technological subjugation of other countries in key areas such as 5G. Or when it took drastic action against Iran and destroyed the Islamic State ‘caliphate’. But it does mean the continued transformation of how ‘American leadership’ manifests itself. 

Under a second Trump administration, America might become a much more arbitrary power which will be far less sensitive to allied concerns and will act forcefully when its interests demand it. But these interests – even, or especially, under an ‘America First’ programme – will very likely continue to include the stabilisation and then preservation of global order to the extent possible, and the checking of rivals’ growth.

Gabriel Elefteriu FRAeS is Deputy Director at the Council on Geostrategy, and leads the Council’s Strategic Advantage Cell. Gabriel is also an Associate of King’s College London, an elected Fellow of the Royal Aeronautical Society, and a founding partner at AstroAnalytica, a space consultancy.

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‘We’re confronted by a “deadly quartet” of nations increasingly working together.’ So declared Lord Robertson, Head of His Majesty’s (HM) Government’s Strategic Defence Review, on launching the reappraisal of Britain’s defences on 16th July 2024. The idea that the People’s Republic of China (PRC), Russia, Iran and North Korea might be colluding has been dismissed for years as a fantasy. But the evidence is mounting that this ‘deadly quartet’ – or ‘CRINK’ as it is being called among the British intelligence community – is colluding to usurp and even replace the prevailing international order. Here, we attempt to ‘disrupt’ orthodoxy and ‘reframe’ outmoded thinking in relation to the CRINK.

Isn’t the idea of the PRC, Russia, Iran and North Korea working together just hysteria?

It has been, but it might not be now. For years, certain analysts have forewarned of the emergence of a so-called ‘DragonBear’ or the BRICS to describe the growing alignment of Russia and the PRC, along with their associates, namely Iran and North Korea. Often, these warnings have been premature. Although the four countries are autocratic, their interests have not always been in direct alignment and they have often looked at one another with caution and suspicion. In particular, Russia and the PRC have often competed in Central Asia, especially as Chinese power has grown across the region and Russia’s economic reach has gone into sharp decline, but even there they have begun to see things similarly.

Over the past two years, a genuine CRINK has started to take shape. The summer of 2024 – and October 2024 especially – has been particularly revealing: Iran has delivered missiles to Russia for use against Ukraine; Russia has helped Iran to develop its military ambitions, even in relation to its nuclear programme; the PRC’s support for Russia has become more apparent; and North Korea has sent troops to help Russia in Ukraine. In effect, a country in the Indo-Pacific is now at war with a country in the Euro-Atlantic. Whether these developments can be considered hysteria, they are a marked difference to cooperation between the four powers in previous years.

Fair enough, but isn’t the CRINK simply a consequence of Russia’s desperation?

Yes, to an extent. As Russia has depleted its stockpile or armoured vehicles, ordnance and personnel in Ukraine, it has looked to the PRC, Iran and even the pathetic regime in North Korea for support. While those countries may not feel a particularly strong attachment to the Kremlin, they understand geopolitics well: a weak Russia would leave the United Kingdom (UK), the United States (US) and their allies and partners freer to constrain Chinese, Iranian and North Korean ambitions in the South China Sea and the Arabian Gulf, on the Korean peninsula, and elsewhere.

The very fact that each of the four authoritarian powers is drawn to geographic regions of less interest to the others may be what is drawing them together. What they share in common is their desire to make the world safer for their own political systems. Thus, each of the four regimes – the kleptocracy in Moscow, the Chinese Communist Party (CCP) in Beijing, the Iranian theocracy in Tehran, and the Workers’ Party in Pyongyang – seeks to degrade the power and authority of the liberal democracies, which they see as a threat to their own survival.

Right, so the CRINK will crystallise into a new powerbloc?

Possibly. Although the CRINK may have been born of Russian desperation, cooperation between Moscow, Beijing, Theran and Pyongyang is unlikely to dissipate. Countries do not cooperate because they are friends; they cooperate because they are desperate, or because they have common interests. For the CCP, the CRINK serves as a useful vessel to secure its interests, one of the most important of which is to prevent European powers – Britain and France chief among them – from becoming more involved in the Indo-Pacific. It also serves as a useful tool to strengthen Iran in the Middle East – keeping the US busy – and as a mechanism to prevent the Korean peninsula from being reunified under the flourishing and democratic South Korea.

Whatever; but surely the leading democracies can contain the CRINK?

That remains unclear. True, the leading democracies have inordinate resources at their disposal. The economic might and military strength of the US alone provides them with the means to take on any rival. But they lack strategic vision and remain clouded by outmoded thinking from the post-Cold War era. Throughout the 2010s, wherever the CRINK countries have challenged the leading democracies, the democracies have demurred. When Russia invaded Ukraine in 2014, the leading Euro-Atlantic powers did nothing. In fact, France and Germany lent Russia indirect support through the ill-conceived Minsk process, just as Germany did little to reduce its dependency on Russian oil and gas, transferring over €1 trillion into the Kremlin’s coffers. When the PRC seized control of several islands and low-tide elevations in the South China Sea, the democracies did little other than appeal to international law or send the occasional warship to undertake freedom of navigation operations.

Add to this inadequate defence spending and the political leaders in Moscow and Beijing can only conclude that the major democracies are not serious. This encourages them to work together to secure their common objectives. Unless the leading democracies, particularly Britain, Canada, Germany, France, Japan and South Korea, among others, boost investment in their armed forces, and embrace a more forceful and strategic approach to international relations, it is highly likely that the CRINK will continue to grow in strength. And, make no mistake, Moscow and Beijing, and their friends in Tehran and Pyongyang, will not give up or relent.

James Rogers is Co-founder and Director of Research at the Council on Geostrategy.

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Britain has just shut down its last coal-fired power plant, becoming the first Group of Seven (G7) country to phase out coal. The United Kingdom’s (UK) biggest steelworks – Port Talbot – recently closed its blast furnaces, and will now build electric-arc furnaces instead. Last week, the government announced £22 billion to fund carbon capture and storage projects. The National Energy System Operator (NESO) has just been established by the Department for Energy Security and Net Zero (DESNZ) to oversee the strategic planning and design of the country’s electricity and gas networks. And official data last month showed that Britain has the world’s highest industrial electricity prices.

The UK needs to have a national conversation about its electricity supply, the grid, the nation’s industrial competitiveness, and climate change. In particular, Britain should ensure it can build out the grid quickly and strategically, and for reforms of wholesale power markets to be implemented in time. This ‘Reframer’ reflects briefly on three areas which need to be considered in any discussion about UK electricity – in terms of electricity demand, supply, infrastructure, and implications.

Renewables will make electricity more affordable and the UK more resilient

It depends. Britain is increasingly using solar and wind energy. The cost of such renewable energy technologies has plummeted in recent years, and – with the help of schemes such as Contracts for Difference – they have become competitive with traditional fossil fuels. However, the People’s Republic of China (PRC) has a stranglehold over the solar industry, as well as minerals such as those needed for wind turbines. Unless countries develop alternative supply chains and manufacturing capabilities, an increasing reliance on these technologies for energy will also provide the PRC with economic advantages and leverage.

While renewable energy is a growing segment of the UK’s electricity mix, gas plays an important part in balancing the Britain’s grid because gas is dispatchable and can be switched on at short notice. This is useful when there is lower supply from intermittent energy resources, such as wind and solar. So, at present, flexibility in the electricity grid is predominantly supplied by gas generation, with approximately 50% of its gas being imported from the international market.

The global energy market has been highly volatile, particularly after the Covid-19 pandemic and Russia’s war on Ukraine. These events have disrupted global energy supply chains, pushing gas prices up significantly. The Carbon Price Support and UK Emissions Trading Scheme (UK ETS) have also increased the marginal cost of electricity. At present, gas tends to set the marginal price for the whole power system. While the large role played by gas will disappear if the UK can reach ‘Clean Power’ by 2030, prices will not necessarily go down – because it depends on whether system management costs would stay stable in that scenario, as well as the role of subsidies such as Contracts for Difference.

Britain also needs to be moving faster on nuclear power. At present, Britain is one of the most expensive places in the world to build new nuclear power plants. In the 1950s, Britain was a leader in nuclear power – but that engineering expertise has since been lost, as the nuclear industry atrophied in part through reliance on gas. The green transition is an opportunity for the UK to reinvest in its nuclear energy sector, and small modular reactors in particular should play a key part in the UK’s energy mix.

Okay, but the UK’s infrastructure is in a good position to handle growing demand for electricity

That’s not the case. Demand for electricity is increasing as industries are electrified. There is a small but growing demand for electric vehicles, and HM Government has set plans for 80% of new cars and 70% of new vans sold in Britain to be zero emission by 2030, increasing to 100% by 2035. There are plans to build many more data centres in the UK, but data centre power use may surge six-fold in ten years. In steelmaking, Britain has closed its coal-fired furnaces and will transition to electric-arc furnaces. Heating accounts for about 37% of total UK carbon emissions when including industrial processes, 14% of which is used to heat British households, and efforts are underway to electrify domestic, commercial and industrial heating, centred around scaling-up heat pump installations. 

The UK has made significant strides in renewable energy adoption, but the grid infrastructure struggles to accommodate intermittent and decentralised renewable energy sources, such as wind and solar. Investment and upgrades in the grid are essential to support the rising demand from electric vehicles, heat pumps, and other energy-efficient technologies. Efficient energy storage solutions are crucial for managing fluctuations in renewable output, ensuring a reliable energy supply even during periods of low renewable generation. 

Crucially, if Britain is to meet its Net Zero targets, it will need to either add or upgrade an estimated 600,000 kilometres of electric cables across the UK – something the country is not sufficiently prepared for. Put simply, there is little value in investing in renewables without investing in the grid.

Fine, but consumers will get behind businesses which show ‘green’ credentials

Not necessarily. Some argue that businesses which can demonstrate their ‘green’ credentials will attract consumers, and therefore companies will want to be based in the UK if it achieves Net Zero quickly. But businesses will always put cost ahead of environmental, social, and governance (ESG) concerns. Companies locating parts of their operations in a Net Zero country is a symbolically nice step for public relations, but it doesn’t automatically protect a company from accusations of greenwashing if other aspects of their operations are not sustainable. The UK is also at risk of offshoring the ‘dirty’ parts of its electricity generation, meaning its Net Zero credentials may be questionable. A commonly cited statistic, for example, is that Britain makes up just 1% of global emissions. This number is only true for emissions within the UK’s borders and does not account for things such as imported fossil fuels.

Dr Mann Virdee is a Senior Research Fellow in Science, Technology, and Economics at the Council on Geostrategy and leads the Caudwell Strong Britain project.

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Given that ministers have recently stated that the United Kingdom (UK) is in a ‘pre-war world’, the issue of defence spending continues to grip strategists, officials and legislators. For more than a decade, British investment in defence has slipped from 2.6% of Gross Domestic Product (GDP) in 2003 to just 2.3% today, despite the worsening of the international environment and the rise of geopolitical competition. With the end of the Cold War, the discourse of peace crystalised, which sees defence spending as a wasteful endeavour. In this ‘reframer’, we attempt to challenge such outmoded thinking and reposition appropriate defence spending as a national benefit.

Defence spending reduces economic growth

Does it? That’s clearly not true if you consider the static impact of defence spending. As the global consultancy Bain & Co. showed in March 2024, every £1 billion spent by the Ministry of Defence generates £2.2 billion of GDP, and supports 15,000 jobs. The debate begins when we get to the dynamics: does spending an extra £1 billion give you a positive growth impact or not? One reason economists have focused on this question is that defence, being discretionary and apt to change suddenly, is an excellent case study for the more general question of whether fiscal stimulus actually works. The literature differs over whether the multiplier effects of defence spending are more or less than one-for-one, but the impact of defence spending is positive across all models.

Maybe, but defence spending draws innovators away from the civilian economy

Not really. A better argument would be that a hike in defence spending generates less growth than if the money were spent in the civilian economy. A study of American defence spending at state level, by Van Gemert et al., supports this conclusion. The reasons are: 1. There are limited positive spillovers from defence firms to others; 2. Defence spending hikes tend to make households nervous that they're about to be taxed more, reining in consumption; and 3. Spending with a defence firm does not stimulate as much consumption as, for example, a boost to public services or automobile manufacturing. So yes, there’s a danger that if the state spends more money on defence, it crowds the innovators into a sector where they will create less value.

On the other hand, if a country is in a technological arms race, as the UK is with Russia and the People’s Republic of China (PRC), it also has to price-in the cost of losing it – which could be felt through energy and food security, or handing Vladimir Putin, President of Russia, the ability to hike inflation and therefore borrowing costs at will.

But it is also true that, in the medium term, defence innovation tends to create economy-wide technological change, which is not captured in impact studies like the van Gemert paper. The wider problem is that Britain is having an essentially wartime debate with peacetime economic assumptions: in all defence economics the cost of catastrophic defeat must be factored in – as Duff Cooper did in his arguments against His Majesty’s (HM) Treasury defence ‘rationing’ in the run up to Munich in 1938.

Sure, but money spent on defence would be better spent on schools and hospitals

Wow. Tell that to the schools and hospitals currently being obliterated by the Kremlin’s Kinzhals. No politician, especially from the Labour tradition, comes into politics to think about prioritising warships and tanks over MRI scanners. But given that defence spending is necessary, and that it has to rise because of the threat, the point is to achieve the maximum in terms of growth multipliers. 

The new government says it wants to spread wealth and high quality jobs across the UK – a glance at the 2024 JedHUB figures for defence employment shows there is plenty of scope for that. Two regions – the South West and North West England – account for 48% of the defence hours worked, while North East England accounts for less than 1%. With defence production jobs being among the best paid in manufacturing, one can imagine the positive impact of spreading the workload more evenly as the sector expands in response to global demand.

The unanswered question for HM Government is how it is going to pay for stuff – whether that is schools and hospitals or frigates and drones. Defence is the one area where, even for governments committed to fiscal rigour, one can make the case for borrowing in times of acute threat. That is what HM Treasury had to accept after 1935: there is no way to fund substantial rearmament from increased taxation.

Okay, but it would be more impactful to invest in other instruments of national power

Not today. If you take the ‘DIME’ categories of national power – diplomacy, information, military and economic – one could argue that the ‘securonomics’ methodology being adopted across Whitehall will boost Britain’s strategic advantage systemically.

HM Government’s primary mission is to grow the economy. Spending more on defence would certainly help do that – if executed right. Its second mission is to decarbonise the electricity supply by 2030 – which again would enhance national power by achieving increased energy security.

In defence, it looks like the government will demand more capabilities be built in the UK, and put a greater emphasis on defence exports. 

Given the current status of the threats Britain faces, and the acknowledged hollowness of British military capabilities, it makes both strategic and economic sense to spend more on defence – though on exactly what depends on the outcome of the Strategic Defence Review.

Paul Mason is the Aneurin Bevan Associate Fellow in Defence and Resilience at the Council on Geostrategy and a journalist, author and political researcher.

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Sir Keir Starmer, Prime Minister, will host the fourth meeting of the European Political Community (EPC) tomorrow. Over 45 European leaders will gather at Blenheim Palace to discuss the strategic challenges facing the continent, with discussions focusing on migration, energy and connectivity, and upholding democracy. The new Labour government was elected on a pledge to improve the United Kingdom’s (UK) political and economic relationship by ‘reconnecting’ with the European Union (EU) and other European nations but without fundamentally altering the terms of the current trading architecture, i.e., remaining outside the EU’s single market and customs union.

Instead, Labour has pledged to put an ambitious ‘UK-EU security pact’ at the heart of an improved relationship. Further details are yet to emerge, but this week’s EPC meeting will be the first opportunity Starmer has to communicate his government’s new European agenda. Here, we attempt to ‘disrupt’ orthodoxy and ‘reframe’ outmoded thinking to explain why developing a strategic role for the EPC is a necessary complement to achieving the new Labour government’s ambition of an improved UK-EU relationship.

What has security and foreign policy got to do with the UK-EU relationship?

A lot. During the initial phase of the Brexit negotiations, Theresa May’s proposal for a ‘UK-EU Security Partnership’ was not received enthusiastically by the EU, and London was accused by some in Brussels of using security as a bargaining chip. Boris Johnson’s government then ruled out a security agreement altogether.

Following Russia’s full-scale invasion of Ukraine in 2022, there has been increasing demand from within the EU for more formal and structured security and foreign policy cooperation with Britain. Previous Conservative governments were reluctant to engage in such a strategic dialogue while outstanding issues, such as the status of Northern Ireland, continued to cause political turbulence.

At a working level, agreement on many of the difficult issues surrounding Northern Ireland have now been resolved, and Rishi Sunak’s government quietly rebuilt trust with European leaders, including by accepting the role as host of this week’s EPC summit.

While the UK may not wish to be subject to EU governance, it will still be affected by decisions taken in Brussels, and the situation in Ukraine illustrates that Britain retains a keen interest in its European neighbourhood. Therefore, without reengaging with the minutiae of EU institutional governance, the UK would surely benefit from a substantive dialogue on the key strategic questions – security, economic resilience, climate, migration and asylum – where it can contribute to a wider European effort.

Okay, but what is in it for the UK?

Opportunities! The new government has not outlined what its proposed EU security pact would entail. However, there is a substantive opportunity to boost European security capabilities and the narrower issue of the UK-EU economic relationship, if these issues are approached deftly by Britain. 

On security and defence, the consistent challenge has been to develop European economies of scale in procurement and remove duplication by encouraging greater specialisation. This would enable constrained public finances to stretch defence budgets further and improve European credibility within NATO, helping to address Washington’s concerns about greater burden sharing within the alliance. All would enable the UK to consolidate its position as the umbilical cord binding the two sides of the Atlantic together – a role now missed by many of its European allies post-Brexit.

Clearly, a more integrated and coordinated European security relationship would require much deeper levels of cross-Channel trust than currently exists, as it implies greater interdependence. This cannot be achieved in a single step. And to facilitate meaningful security cooperation, the EU would need to emphasise the ‘open’ in its concept of ‘open strategic autonomy’. For example, this would mean revisiting non-EU members’ exclusion from common defence procurement rules, and wider issues such as cooperation on critical minerals. 

Meanwhile, the new government is committed to improving the economic relationship. The logic of its policy of fostering a closer UK-EU relationship via the lens of security is that strategic discussion around European security and economic resilience should no longer be siloed but be considered in conjunction.

Fine, but will not the EU simply bag the UK’s offer and refuse to engage on commercial issues?

It is certainly a risk – a challenge for the new Labour government to overcome. Developing an ambitious security pact without receiving any concessions on the trade relationship would be an obvious political target for a fiercely eurosceptic opposition. But it would not be in the EU’s interest to enter into new and unbalanced agreements with Britain which create future instability.

Therefore, it would not be unreasonable for the UK to point out that a genuine new ‘geopolitical partnership’ requires a broader rapprochement, including removing unnecessary and mutually damaging trade frictions. On many issues, the EU has granted the UK worse trade terms than its other strategic partners and, in some cases, its potential geopolitical adversaries. These issues could be addressed under Labour’s policy of remaining outside the EU single market.

The challenge facing HM Government is that the European Commission owns the UK-EU trade relationship, whereas EU member states are more likely to see the value of a broader and deeper strategic relationship with Britain. This is why the EPC is a promising vehicle for UK influence, because it provides a broader forum where Britain can draw the undeniable link between security and economics, or in Rachel Reeves’ parlance: ‘securonomics’

Very well, but is not the EPC just another talking shop?

The jury is still out. Yet, if it is to work, the UK, with its intelligence and military strength, will be vital to its success. Previous attempts to establish such an organisation have foundered because most non-EU countries have viewed such initiatives as a pale imitation of full membership. Britain, however, has the scale, profile and the motivation to provide the EPC with a mission clearly outside the confines of the EU. Equally, the composition of the EPC, which includes a wide group of non-EU members, including those on the front line of Russian aggression, such as Ukraine, and Europe’s other major financial centre, Switzerland, reflects the fact that the UK’s interests in Europe are not defined solely by Brussels.

The narrower UK-EU relationship will continue to be governed by the bilateral Trade and Cooperation Agreement. But Britain needs a means of talking to ‘Europe’ which reflects the full range of issues it brings to the table and places the bilateral UK-EU relationship in its proper strategic context. Given time and political energy, the EPC could provide just that.

Stephen Booth is an Associate Fellow in Political Economy at the Council on Geostrategy.

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This week, NATO is holding its 75th anniversary summit in Washington, the city where the original North Atlantic Treaty was signed. Since its foundation, the alliance has seen Russia as the main threat, though the People’s Republic of China (PRC) began to feature in annual summit declarations and communiques from 2019, being most pronounced in 2021. NATO allies now define the PRC as a ‘systemic competitor’ or ‘challenge’ to Euro-Atlantic security. But it is unclear whether Britons and Europeans have come to terms with what this means, and a noisy American caucus would like them to remain focused exclusively on Russia. Here, we attempt to ‘disrupt’ orthodoxy and ‘reframe’ outmoded thinking in terms of strategic geography, the PRC and NATO’s purpose.

We do not need to worry as we have reached ‘Peak China’

Not necessarily. It is true that the Chinese economy has slowed substantially from its rapid growth during the 2000s and 2010s. As early as 2013, Xi Jinping, General Secretary of the Chinese Community Party (CCP), noted that the PRC’s economic and social model was ‘unbalanced, uncoordinated and unsustainable’. The PRC’s export-led growth economy is overly dependent upon other countries’ absorption of Chinese manufacturing surplus. This model is slowly losing its viability. In addition, Xi’s increasingly repressive political environment, combined with American, Japanese, European and British concerns over the CCP’s intent, are deterring foreign direct investment, which has plummeted in recent years.

So far, the CCP – a Leninist autocracy – has failed substantively to address the PRC’s overreliance on exports as doing so would require political reform and a loosening of state control over the economy. Domestically, the long term effects of the one-child policy have led to a shrinking labour force and potential future labour shortages, while rising debt, pollution, demographic decline and water scarcity may impede the CCP’s plans to supplant the United States (US) as the dominant superpower by 2049.

Yet, even if the Chinese economy has entered a plateau, it retains a significant industrial base with which the CCP can pursue its objectives. This means that Beijing will uphold a substantial, even growing, international profile. And mainland China’s geographic location – at the heart of the Indo-Pacific – may facilitate a ‘concentration effect’ distant rivals such as the US will find it hard to overcome.

Fine, but China is not a ‘hostile state’

What? Under Xi’s leadership, the PRC has adopted an increasingly uncooperative stance towards democracies and the existing free and open order. Xi frames the CCP’s actions through the lens of ideological ‘struggle’ against ‘hostile foreign forces,’ portraying the US, in particular, as intentionally seeking to contain the PRC’s rise. This adversarial worldview underpins Xi’s concerted efforts to reshape the international order in line with CCP interests and values, and ensure the survival of its one-party regime.

Xi’s ‘China Dream’ envisions ‘national rejuvenation’ and global leadership by 2049, aiming to make the PRC the world’s pre-eminent power in ‘comprehensive national strength’ and ‘international influence.’ These goals entail: the annexation of a democracy of 24 million people, Taiwan; the ‘reclamation’ of its claimed (and contested) territories in the South China Sea; becoming the world’s foremost scientific and technological superpower by 2030, and configuring global governance to subjugate liberal international institutions and ideals – including electoral democracy, civil society, rule of law, and freedom of the press – under those of authoritarianism. 

Accordingly, the PRC challenges the dominance of free and open countries across multiple interlinked domains – economic, technological, military, and ideological – while cultivating their dependencies upon it. To question further whether the CCP’s vision really is one which is hostile to democracies, one might simply look at the quasi-alliances it has forged with Iran and North Korea or the unwavering support provided to its ‘friend without limits’, Russia, in its full-scale invasion of Ukraine.

Very well, but China demonstrates ‘no military threat’ towards Europe

Hardly. The tentacles of CCP power, manifest through the Belt and Road initiative, the Global Development Initiative, and the Global Security Initiative, as well as the growing strength of the People’s Liberation Army Navy (PLAN), mean that the PRC is pushing west across the Indian Ocean, towards the Middle East and Africa – even the Eastern Mediterranean and the Western Balkans. The Integrated Review Refresh and NATO’s Strategic Concept have already identified the ‘systemic challenge’ the PRC poses to the international order. Part of this involves maintaining trade dependencies, but it also includes driving wedges between the two sides of the Atlantic and fomenting political discord.

Russia is central to the CCP’s ambition. Whether a genuine ‘no limits’ partnership exists between the PRC and Russia is not important. What matters is that it is not in Beijing’s interests for Moscow to fail or suffer defeat. Russia’s routing in Europe would free up NATO allies such as France, the UK and the US to focus their naval and military power beyond the Euro-Atlantic, especially in the areas in which the PRC has the greatest interest. Though he may hold his nose and restrain the Kremlin from excesses, Xi is on Russia’s side.

Whatever, but as a Euro-Atlantic alliance, NATO should ‘stay out of Asia’

Yes, on paper. Without a shadow of doubt, NATO is a Euro-Atlantic alliance. This is written into the North Atlantic Treaty; Article 6 modifies Article 5 to preclude territories outside of Europe, North America and the Atlantic north of the Tropic of Cancer. This excludes British, European and American overseas territories beyond those areas, even non-contiguous parts of the US and France, such as Reunion and Hawaii. The exclusion also applies to critical nodes in the British and American global defence system, including Guam and British Indian Ocean Territory.

For much of the Cold War, it did not matter that NATO focused on Central Europe. But, today, a different approach may be required. In the event of Chinese forces targeting US assets in the Western Pacific (or British and French territories in the Indian Ocean), what action would NATO take? Can it really abandon the alliance’s nuclear custodians to face the wrath of the PRC alone? Would the PRC encourage Russia to widen the conflict? Would the Kremlin use the opportunity to secure its objectives in Eastern Europe?

These are difficult questions, and ones which require careful consideration. Britain has had a ‘Europe-first’ approach since Ernest Bevin established it in 1947; this is not in question. But if NATO is to remain relevant, it has to adapt to new geopolitical realities. Atlantic-Pacific connectivities can no longer be ignored.

Elizabeth Lindley is Policy Fellow in the China Observatory at the Council on Geostrategy. James Rogers is Co-founder and Director of Research at the Council on Geostrategy.

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