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한국어로 읽기 Leer en español In Deutsch lesen Gap اقرأ بالعربية Lire en français Читать на русском As Israel’s devastating war in Gaza has ground on, the two-state solution to the Israeli-Palestinian conflict was thought to be “dead”. Now, it is showing signs of life again. French President Emmanuel Macron is reportedly pressing other European nations to jointly recognise a Palestinian state at a UN conference in mid-June, focused on achieving a two-state solution. Macron called such recognition a “political necessity”. Countries outside Europe are feeling the pressure, too. Australia has reaffirmed its view that recognition of Palestine should be a “way of building momentum towards a two-state solution”. During Macron’s visit to Indonesia in late May, Indonesian President Prabowo Subianto made a surprising pledge to recognise Israel if it allowed for a Palestinian state. Indonesia is one of about 28 nations that don’t currently recognise Israel. France, Australia, the United States, United Kingdom, Canada, Germany, Italy, Japan and South Korea are among the approximately 46 nations that don’t recognise a Palestinian state.   The UN conference on June 17–20, co-sponsored by France and Saudi Arabia, wants to go “beyond reaffirming principles” and “achieve concrete results” towards a two-state solution. Most countries, including the US, have supported the two-state solution in principle for decades. However, the political will from all parties has faded in recent years. So, why is the policy gaining traction again now? And does it have a greater chance of success? What is the two-state solution? Put simply, the two-state solution is a proposed peace plan that would create a sovereign Palestinian state alongside the Israeli state. There have been several failed attempts to enact the policy over recent decades, the most famous of which was the Oslo Accords in the early 1990s. In recent years, the two-state solution was looking less likely by the day. The Trump administration’s decision in 2017 to recognise Jerusalem as the capital of Israel and move the US embassy there signalled the US was moving away from its role as mediator. Then, several Arab states agreed to normalise relations with Israel in the the Abraham Accords, without Israeli promises to move towards a two-state solution. The Hamas attacks on Israel – and subsequent Israeli war on Gaza – have had a somewhat contradictory effect on the overarching debate. On the one hand, the brutality of Hamas’ actions substantially set back the legitimacy of the Palestinian self-determination movement in some quarters on the world stage. On the other, it’s also become clear the status quo – the continued Israeli occupation of Gaza and the West Bank following the end of a brutal war – is not tenable for either Israeli security or Palestinian human rights. And the breakdown of the most recent ceasefire between Israel and Hamas, the return of heavy Israeli ground operations in May and reports of mass Palestinian starvation have only served to further isolate the Israeli government in the eyes of its peers. Once-steadfast supporters of Israel’s actions have become increasingly frustrated by a lack of clear strategic goals in Gaza. And many now seem prepared to ignore Israeli wishes and pursue Palestinian recognition. For these governments, the hope is recognition of a Palestinian state would rebuild political will – both globally and in the Middle East – towards a two-state solution. Huge obstacles remain But how likely is this in reality? There is certainly more political will than there was before, but also several important roadblocks. First and foremost is the war in Gaza. It’s obvious this will need to end, with both sides agreeing to an enduring ceasefire. Beyond that, the political authority in both Gaza and Israel remains an issue. The countries now considering Palestinian recognition, such France and Australia, have expressly said Hamas cannot play any role in governing a future Palestinian state. Though anti-Hamas sentiment is becoming more vocal among residents in Gaza, Hamas has been violently cracking down on this dissent and is attempting to consolidate its power. However, polling shows the popularity of Fatah – the party leading the Palestinian National Authority – is even lower than Hamas at an average of 21%. Less than half of Gazans support the enclave returning to Palestinian Authority control. This means a future Palestinian state would likely require new leadership. There is almost no political will in Israel for a two-state solution, either. Prime Minister Benjamin Netanyahu has not been shy about his opposition to a Palestinian state. His cabinet members have mostly been on the same page. This has also been reflected in policy action. In early May, the Israeli Security Cabinet approved a plan for Israel to indefinitely occupy parts of Gaza. The government also just approved its largest expansion of settlements in the West Bank in decades. These settlements remain a major problem for a two-state solution. The total population of Israeli settlers is more than 700,000 in both East Jerusalem and the West Bank. And it’s been increasing at a faster rate since the election of the right-wing, pro-settler Netanyahu government in 2022. Settlement is enshrined in Israeli Basic Law, with the state defining it as “national value” and actively encouraging its “establishment and consolidation”. The more settlement that occurs, the more complicated the boundaries of a future Palestinian state become. Then there’s the problem of public support. Recent polling shows neither Israelis nor Palestinians view the two-state solution favourably. Just 40% of Palestinians support it, while only 26% of Israelis believe a Palestinian state can “coexist peacefully” alongside Israel. However, none of these challenges makes the policy impossible. The unpopularity of the two-state solution locally is more a reflection of previous failures than it is of future negotiations. A power-sharing agreement in Northern Ireland was similarly unpopular in the 1990s, but peace was achieved through bold political leadership involving the US and European Union. In other words, we won’t know what’s possible until negotiations begin. Red lines will need to be drawn and compromises made. It’s not clear what effect growing external pressure will have, but the international community does appear to be reaching a political tipping point on the two-state solution. Momentum could start building again.

한국어로 읽기 Leer en español In Deutsch lesen Gap اقرأ بالعربية Lire en français Читать на русском Abstract Why is it that cross-strait tension has been at its highest since the missile crisis of 1996? Why is the USA–Taiwan–China relations so contentious since 2016? This article argues that one oft-neglected factor—nationalism and identity politics—needs to be considered as a contributing factor to the heightened tension in this triangular relationship. In all three states, audience costs have significantly increased as domestic leaders and elites appeal to populist and nationalistic positions and rhetoric. Though studies of foreign policy often claim that ‘politics stop at the water’s edge,’ populist and nationalist rhetoric in the domestic politics almost always spill over to the international arena. The convergence of Trump’s America First and the US’ obsession with its global primacy underpins and drives America’s approach to its strategic competition with China. China’s continual reference to the hundred years of humiliation in the nineteenth century and early twentieth century and Xi Jinping’s ‘China Dream’ are ethnonationalist appeals that drives China’s fight for its ‘rightful place’ in the global pecking order. Taiwan’s deepening national identity and sociopolitical de-Sinicisation while contributing the development of a separate nation-state is a direct clash to the People’s Republic of China (PRC’s) claim of Taiwan as part of its one-China principle. This article will trace and examine the role of domestic nationalism and how it has contributed to make the Taiwan Straits a ‘hotspot’ in global geopolitics and geoeconomics. Introduction The introduction of the phrase ‘Taiwan Contingency’ to the global lexicon in 2020 served to highlight how the temperature of cross-strait relations between China and Taiwan had become a key barometer that the global community was paying attention to (Taylor, 2020). It is also not a coincidence that the increasing attention paid to the Taiwan Strait comes at a time when the USA–China relationship has devolved into great power strategic competition; the Pentagon had long used the term ‘Taiwan Contingency’ in its annual assessment reports on the US military’s ability to implement the Taiwan Relations Act, going as far back as the report from the year 2000, but it was only when USA–China relations worsened and cross-strait tensions created a worry about a flashpoint that the term became widely used (Department of Defense, 2000; Wuthnow, 2020). Much has been said about the increasing tension in cross-strait relations being a result of the overarching competition between the USA and China to define their positions vis-a-viz each other in the global hierarchy. These increasing tensions have often been attributed to the inherent rivalry between an ascending power and a declining one, most notably by Graham Allison in his book Destined for War (Hanania, 2021). The idea of the Thucydides Trap as floated by Allison has become the dominant narrative in the discourse surrounding the USA–China competition and has also contributed to an arguably narrow analysis of the strategic competition. Influenced by the analysis of the Thucydides Trap, China’s actions have been cast separately as being driven by security concerns and imperial aggression, feeding into the narrative of a power struggle in the international arena between the reigning superpower and a surging new power with desires to fulfil its civilisational creed (Mazza, 2024; Peters et al., 2022; Sobolik, 2024). This view seeks to portray China as a disrupting force that seeks to upend the status quo in the international system and thereby overturn the current rules-based international order, while casting the USA as a defender standing up against Chinese aggression, and has led to the USA–China strategic competition also being referred to a ‘new Cold War’ (Brands & Gaddis, 2021; Mazza, 2024). The rising tension in the Taiwan Strait has thus been seen as serving as a frontline to this ‘new Cold War’, and that the three-party relationship between the USA, China and Taiwan serves as some litmus test of American ability to contain a rising China (Lee, 2024). In fact, China hawks in the US and Taiwanese officials have often made use of this ‘new Cold War’ setting to frame the USA–China strategic competition as a competition between autocracies and democracies, and that Taiwan’s democracy makes it worth protecting (Hung, 2022; Lee, 2024). The Taiwanese government has consistently focused on a need to build an alliance of democracies that will support the island against Chinese aggression, highlighting shared values and like-minded partners in their discourse (Ripley, 2024). Yet, a broader analysis shows how framing the rising tension in the Taiwan Strait was a by-product of the greater geopolitical struggle between the USA and China in this ‘new Cold War’ ignores other possible factors. Most notably, the impact of nationalism and identity politics on the domestic sphere needs to be considered as a contributing factor to the heightened tension in this triangular relationship. While there has been increasing attention on nationalism as a characteristic of the international system since the time that scholars like Holsti (1980) brought up the need to emphasise the ‘prominence of nationalist behaviour’ in international relations (IRs) theory, the contemporary analysis of the Taiwan Strait issue shows that most still ignore the impact of domestic pressures on foreign policy choice by the three parties in this relationship; audience costs have significantly increase as domestic leaders and elites appeal to populist and nationalistic positions and rhetoric, and these populist and nationalist rhetoric in the domestic politics almost always spill over to the international arena (p. 25). In the United States, we have the convergence of Trump’s America First ideology and the US’ obsession with its global primacy that underpins and drives America’s approach to its strategic competition with China. While in China, the Chinese Communist Party’s (CCP) continual reference to the hundred years of humiliation in the nineteenth century and early twentieth century and Xi Jinping’s ‘China Dream’ are ethnonationalist appeals that are used to reinforce the Party’s right to guide China to fight for its ‘rightful place’ in the global pecking order. On the island, Taiwan’s deepening national identity and sociopolitical de-Sinicisation while contributing the development of a separate nation-state create a direct clash to the People’s Republic of China (PRC’s) claim of Taiwan as part of its one-China principle. This article thus seeks to trace and examine the role of domestic nationalism and how it has contributed to make the Taiwan Strait a ‘hotspot’ in global geopolitics and geoeconomics. This is done by first analysing the literature on nationalism and its role in IRs, following which, the sections examine the unique nationalisms of the United States, China and Taiwan and their role in increasing audience costs for the political elite, which will allow us to analyse how this clash of nationalism contributes to the Taiwan Strait becoming the global ‘hotspot’ that it is. Understanding Nationalism in International Relations As previously mentioned, the literature on IRs theory mainly focuses ‘on models of international interaction based on rational action and material structural factors, and exogenising the formation of preferences and the actors’ identities’ (D’Anieri, 1997, p. 2). Even theorists who have engaged with nationalism in international relations have admitted that ‘the relationship between the two has never been an especially easy one’ (Cox, 2019, p. 249). Yet nationalism is arguably central to the practice of IRs, given how nationalism is a key factor that makes it possible to conceive of states as coherent agents, as it creates the distinctiveness that allows a nation-state to define itself in its interactions with another (Kowert, 2012; Waltz, 1959). It is almost impossible to ignore the role of nationalism given the presumed equivalence of ‘nation’ and ‘state’ in IRs theories, and how nationalism is embedded in the conceptualisation of sovereignty, which serves as a fundamental factor in the interactions between states (Heiskanen, 2019, 2021). This is especially so given how the era of globalisation has come to an end, giving rise to a period of IRs that is characterised by securitisation and the preponderance of terms like ‘national security’ and ‘national interest’ (Heiskanen, 2019; Posen, 2022). In this contemporary age, there is a heightened awareness of the need to express and protect a state’s sovereignty in its international interactions, which therefore paves the way for nationalism to be the ‘centripetal force’ in driving interactions between nation-states (Kovács, 2022; Waltz, 1959, pp. 177–178). Nationalism can play such a role in defining interactions between nation-states because nationalism at its core is the conceptualisation of the identity of the polity. Modern nationalism in that sense is the expression of the principle that ‘nation = state = people’, with the purpose of binding the people to the state under one ‘imagined community’ to justify the existence of the nation-state as a construct (Anderson, 1983; Hobsbawm, 1990, p. 19). The nationalism that defines the nation-state is neither natural nor inevitable, but rather a by-product of a nation-building effort to craft an identity that will allow the state to distinguish and therefore differentiate itself in a world of nation-states (Connor, 1990; Gellner, 1983; Smith, 1986). This creates the peculiarity of nationalism in which they are essentially all the same, yet at the same time, individually unique by necessity. It is thus the interaction between the individual uniqueness while having the same broad goals that lead to nationalism influencing the interactions of nation-states in the international arena; arguably, it is not just the strength of nationalism that is important but also the content of the national identity that helps dictate the interaction between the states (D’Anieri, 1997). The creation and the make-up of nationalisms and national identities are thus of interests for this article’s analysis of the triangular relationship between United States, China and Taiwan. The literature on nationalism and national identity gives us a breakdown on the creation of nationalism. As a relatively modern phenomenon, the rise of nationalisms around the world is a direct result of the socioeconomic upheaval that marked the progress of modernity (Anderson, 1983; Gellner, 1983). The advent of industrialisation saw the collapse of the previous social structure that separated the agrarian, merchant classes and the nobility, and necessitated the development of a new identity that would bind diverse groups of people together under the banner of a nation-state. In that regard, the creation of nationalism was necessarily top-down, often driven by the needs of the new political elite who now exercised power in these emerging modern nation-states and formed through nationwide tools such as a national language and the national education system (Anderson, 1983; Gellner, 1983). The content of the national identity though could not simply be created out of thin air where the general form of nationalisms is the same and built on a structure of common identity and a sense of belonging to a community, the content of nationalisms needed to be specific to the groups of people living in the nation-state to produce the necessary uniqueness that would engender the desired outcome. As such, nationalisms and national identities were built on the pre-existing myths and histories of the people that inhabited the land or were present at the founding of the nation-state (Billig, 1995; Calhoun, 1997; Smith, 1986). This results in various contents of the nationalism that are part ethnic but also part mythological. The next section will examine the contents of the national identities of the United States, China and Taiwan in relation to this. American Exceptionalism: America the Great Like all nationalisms, American nationalism aims to ‘legitimise, mobilise and integrate the nation, thereby promoting the unity of the national people, and demanding a sovereign state for this nation’ (Trautsch, 2016, p. 291). Yet unlike European nationalism which had existing histories to build upon, American nationalism was ‘a model of nationhood that did not rest on historic claims to antiquity nor on any sense of distinctive peoplehood’, its foundations being very much rooted on mythologising the pilgrims’ journey across the Atlantic on the Mayflower and the nation’s beginnings as a settler nation (Doyle, 2009, p. 79). The pilgrims’ journey on the Mayflower marked the separation between the ‘Old World’ and the ‘New World’, providing dividing line that forms the basis for the conceptualisation of America as unique. While American nationalism does identify its roots with the colonial migration from Europe, the beginnings of this nationalism are tied specifically to the American Revolution and the Declaration of Independence (Doyle, 2009). The War of Independence marked a coalescing of consciousness in the 13 colonies that birthed a new nation, and gave even more credence to the distinction between Europe and the ‘Old World’, and the new American nation in the ‘New World’ (Commager, 1959; Doyle, 2009). This distinction was helped by the colonies’ history as an asylum for religious dissenters, impoverished servants and assorted refugees from Europe, allowing the colonies to divest itself of its British heritage (Doyle, 2009). Yet, certain aspects of British culture did influence the founding fathers of America in the conception of the American nation. While rebelling against their colonial masters, the founding fathers framed their independence as based on the British belief in the institutions of law, liberty and representative government mixed with a healthy dose of religiosity, which, given the lack of a feudal tradition and existing aristocracy, allowed for the creation of a national consciousness that celebrated equality without the necessary social revolution that marked the ‘Old World’ (Lieven, 2012). This allowed for the image of America as a newfound promise land, further playing into the distinction between the old and new, and as scholars from Tocqueville on have noted, birthed the idea of the exceptionalism of the American nation, the ‘shining city on the hill’ (Lieven, 2012). The subsequent expansion of the USA westward that saw the eventual formation of the geographical borders of modern America helped to further this sense of exceptionalism. As the expansion evolved from purchasing land to conflict with both the Native Americans and the Spanish colonial forces, American exceptionalism took on a sense of preordination (Doyle, 2009; Trautsch, 2016). Between the Revolution and the Civil War, American nationalists who recognised the need for strengthening the national consciousness began the enterprise by focusing on the fundamental idea that ‘Americans had a historic mission and that their bond of nationhood lay in their common destiny’; this required the positioning of America’s future place in the history of the world as one that was naturally glorious (Doyle, 2009, p. 86; Trautsch, 2016). To that end, the nationalists pushed the narrative of America’s ‘manifest destiny’, an unstoppable rise for the ‘freest, the happiest, and soon to be the greatest and most powerful country in the world’ (Doyle, 2009, p. 88). The successful expansion and victories in conflict that eventuated in the American nation covering the breadth of continental North America firmly entrenched this sense of preordained greatness for the nation. American nationalism had come to encompass both the civic values of liberty and respect for institutions, and the dreams of imperial grandeur that marked them for greatness; America was free and therefore exceptional, just as America was victorious and therefore exceptional. American exceptionalism, therefore, made the nation’s ascension to the top of the global hierarchy post-1945 easy. To the American nation, having believed in their destined greatness, a seat at the table presiding over global affairs was only to be expected. American nationalism had led the nation to believe in its destiny, and it saw itself as having been chosen, or even, anointed to lead (Lieven, 2012). Such exceptionalism naturally influences modern American foreign policy, as Kristol (1983) points out: Patriotism springs from love of the nation’s past; nationalism arises out of hope for the nation’s future, distinctive greatness…The goals of American foreign policy must go well beyond a narrow, too literal definition of ‘national security.’ It is the national interest of a world power, as this is defined by a sense of national destiny. (p. xiii) American nationalism shapes the way the USA views its interactions with the world, starting with its presumption of its deserved position at the top of the global hierarchy. The mythologising of its ‘historic mission’ and ‘manifest destiny’ helped to create the paradigm that the United States is the natural leader of the world, and its national interests include the protection of its position as the leader of the world. This creates a knock-on effect in its interactions with other states; if the United States is the natural leader, then others must listen and be led, and as the leader, challenges to its primacy cannot be tolerated. However, such conceptualisation brings it into a clash with the rising nationalism of China. Chinese Ethnonationalism: The China Dream Unlike American nationalism, modern Chinese nationalism is a relatively new phenomenon. In fact, the conceptualisation of a Chinese nation did not come about until the nineteenth century, as the Chinese tried to ‘create a modern identity to cope with conditions created by China’s confrontation with the Western world’, forcing the Chinese ‘to deal with foreign concepts, including that of nation, state, sovereignty, citizenship and race’ (Wu, 1991, p. 159). Furthermore, where American nationalism was centred upon its existence as a settler nation, Chinese nationalism could rest on both historic claims to antiquity and a sense of distinctive peoplehood, as Smith (1986) would have identified it, the roots of Chinese nationalism were definitely ethnosymbolic. The 1911 Revolution that saw the collapse of the Qing Dynasty and Imperial China marked the beginnings of modern Chinese nationalism (Townsend, 1992). Where previously the conceptualisation of Chinese identity was grounded in a rich cultural heritage of stories about the ‘abstract idea of the ‘Great Tradition’ of Chinese civilisation’, the encroachment of Western colonial forces in China led to rising discontentment amongst the Chinese public and the rise of intellectual writings about a modern form of Chinese identity which combined Chinese tradition and Western nationalism (Townsend, 1992; Wang, 1988, p. 2; Zheng, 2012). Dr Sun Yat-Sen, who is acknowledged as the father of the modern nation, pushed for the creation of a consciousness of nationhood in his Three Principles of the People, advocating for the creation of modern Chinese nationalism that was centred upon the Chinese people as a unified group, which he categorised as the Chinese ethnic community, ÖлªÃñ×å zhonghuaminzu (Fitzgerald, 2016; Tan & Chen, 2013; Wang, 1988; Wells, 2001). The end of the 1911 Revolution saw the establishment of the Republic of China (ROC) with Dr. Sun as the first president (Zheng, 2012). This marked the transition of China from imperial to statehood and saw the coalescing of the consciousness of Chinese nationhood. The ethnosymbolic roots of Chinese nationalism permeated this consciousness, even the name of the Republic, ÖлªÃñ¹ú zhonghuaminguo, emphasised the belonging of the state to the Chinese ethnic nation as the first three characters of the name represent the ethnic Chinese nation. So, Chinese nationalism can be said to also equate to Chinese ethnonationalism, and as a nationalism that rested on the rich history of the Chinese people and the abstract conceptualisation of the following the tradition of great Chinese civilisations, Chinese nationalism is also beholden to a lot of nostalgia. Where Dr Sun and his fellow intellectuals pushed the creation of Chinese nationalism by appealing to the cultural heritage of Chinese civilisation, they combined this with modern western nationalist ideology that focused on a struggle for sovereignty, in this case against the Western imperial powers and the Qing rulers. As such, this nostalgia is driven by the experiences of the Chinese people during the perceived ‘century of humiliation’ °ÙÄê¹ú³Ü bainianguochi starting from the Opium War till 1945, where China struggled for self-determination only to be invaded by the Japanese prior to the Second World War (Fitzgerald, 2016; Townsend, 1992; Zheng, 2012). China, as the empire-turned-nation and heir to the great tradition of Chinese imperial civilisation, was successively beaten and this was seen as a deep shame to the Chinese people who under successively foreign oppressors, including the Manchus of the Qing Dynasty, longed for freedom and a return to glory for the Chinese nation. As such, when Mao announced the founding of the PRC in 1949, the legitimacy of the CCP in ruling the nation was built on Chinese nationalism and the part that the party played in defeating the Japanese. The CCP’s victory in the civil war was arguably also because they presented themselves as even more nationalist than the nationalist Kuomintang (KMT) that they chased out of the mainland (Gries, 2020). This close connection between the party’s legitimacy and Chinese nationalism has seen the CCP often fall back on nationalistic propaganda to shore up its position of power, most notably after the events of Tiananmen Square (Gries, 2020). With his ascension to the presidency, Xi Jinping has continued the use of Chinese nationalism to firm up the party’s hold on power, having often referred to China’s rise as the country’s national destiny, referencing the country’s glorious past and harping on the ‘century of humiliation’ that denied China its place among the world’s powers (Tan, 2023). In this current form of Chinese ethnonationalism, Xi’s slogan of ‘national rejuvenation’ helps to reinforce the concept that China, once great but humiliated by the predations of Western colonisers, is now reclaiming its previous majesty to fulfil the ‘China Dream’ (Tan, 2023). This creates the sense that China must stand up to Western powers due to their rightful placed in the world while it must also continue to address the humiliations of the past, of which Taiwan serves as a reminder of, and this creates the setting for competition with the United States and rising tensions with Taiwan. Taiwanese Nationalism: De-sinicised and Independent The case of Taiwanese nationalism is an interesting one. Of the three nationalisms examined in this article, Taiwanese nationalism is the youngest one, having come into existence only in recently. Furthermore, unlike the United States and China, there is no continuity and coherence between the nation and the state in Taiwan. The state governing and exerting authority over Taiwan’s population embodies and merges two distinct political visions, each tied to a separate national identity: Chinese and Taiwanese, as the ROC is ‘a product of Chinese history and Chinese nationalism’, having been imposed onto the island when the KMT lost the civil war and fled the mainland (Clark & Tan, 2012; Lepesant, 2018, p. 65). In fact, while the KMT exercised marital rule over the island under the regimes of Chiang Kai-shek and Chiang Ching-kuo, the party tried constantly to impose an essentialist Chinese nationalism that clashed with the memories and experience of most of the island’s population, especially those who were raised under Japanese rule (Lepesant, 2018). This directly restricted the development of a national consciousness that centred on Taiwanese-ness, which explains the relatively late creation of Taiwanese nationalism. While overseas Taiwanese who were exiled by the KMT had started to display ideologies that was a semblance of Taiwanese nationalism, it was not until the 1980s and the gradual democratisation of the island that this nationalism began to take root (Chiou, 2003; Clark & Tan, 2012; Wakabayashi, 2006; Wu, 2004). With the increasing calls for political liberalisation in the 1980s, Chiang Ching-kuo began the initial process of Taiwanisation, allowing for the appointments of Taiwanese who were ±¾Ê¡ÈË benshengren (Han-Chinese who were on the island before the 1949 migration) to political positions even in his own administration (Cabestan, 2005). This kickstarted the process of nation-building, which only moved into a higher gear with the democratisation of the island in the early 1990s as there developed a political imperative to create an identity that could unify the people on the island (Wakabayashi, 2006). Lee Teng-hui, as the president of Taiwan who oversaw the democratisation process, put his support behind the Taiwanisation movement, supporting the development of a nation-building programme that would spur the adoption of Taiwanese nationalism, against the wishes of the KMT old guard. Lee’s action in building up Taiwanese nationalism is best seen in his propagation of the idea of a ‘new Taiwanese’ national identity in his speech to the National Assembly and more concretely, the change in name for the ROC to the ROC on Taiwan (Chiou, 2003; Jacobs, 2007; Wakabayashi, 2006). As such, the content of Taiwanese nationalism cannot be separated from the complex history of the island. The roots of Taiwanese nationalism are traced to the imperial expansion of Japan in the late 1800s, while previously the island had some contact with various Chinese dynasties and a brief colonial period by the Dutch, the Qing had neglected the island which meant that Japanese colonialisation marked the modernisation of the island (Cabestan, 2005; Wakabayashi, 2006). Japanese colonial rule also sparked the development of a pan-Taiwanese identity rooted in a struggle for independence, and distinctly anti-colonial and anti-Japanese (Brown, 2004). This pan-Taiwanese identity covered all the residents of the island who were not Japanese and therefore was not just restricted to the ethnic Han Chinese. With democratisation and the push for the ‘new Taiwanese’ national identity under Lee, this pan-Taiwanese identity was used as the foundation to build a new national identity. However, this also meant that the aspects of this identity that focused on independence were subsumed into the new Taiwanese nationalism, which was further enhanced by the experiences of the Taiwanese people under KMT rule (Wakabayashi, 2006). For Taiwan, both Japanese colonial rule and the experience of the civil war of post-1945 China became the existence of the ‘others’ to the development of the Taiwanese sense of self (Wakabayashi, 2006). This therefore meant that Taiwanese nationalism was first and foremost a nationalism for an independent Taiwan. In 2000, with the election of Chen Shui-bian from the then opposition Democratic Peoples’ Party (DPP) to the presidency, Taiwanese nationalism took another step in its evolution. No longer was Taiwanese nationalism simply about the independent sovereignty of the island whilst maintaining the cultural affinity for the Chinese tradition as espoused by Lee, but now there was a clear de-Sinicised aspect to Taiwanese nationalism and national identity (Hughes, 2013; Wakabayashi, 2006). This was driven by the policies of the Chen administration which included initiatives to rectify Taiwan’s name, changes to institutions designed to promote unification with mainland China, attempts to change the ROC Constitution and most importantly, the re-orientation of the education curriculum to focus more on Taiwan and less on the mainland. This resulted in the evolution of Taiwanese national identity towards one that increasingly sidelined the culturally ethnic Chinese component, instead insisting a cultural makeup that was simultaneously Han Chinese, Japanese and Aboriginal Taiwanese (Brown, 2004; Hughes, 2013; Wu, 2004). Yet such a nationalism brings along issues given the precarious relationship between the island and its cross-strait neighbour. The Clash of Nationalisms This article aimed to examine the role that nationalism played in the rising tensions in the United States, China and Taiwan triangular relationship. The idea that nationalisms can be antagonistic to each other and lead to conflict is not entirely new, despite the lack of IR theories that appropriately accommodate for the impact of nationalism. Samuel Huntington (1996) in his book, Clash of Civilizations, argues that future global conflicts will be driven not by ideological or economic differences but by cultural and civilisational divisions due to the increasing interaction between civilisations as a result of globalisation. Huntington (1996) predicted that a rising and assertive East Asia, on the back of rapid economic development, would increasingly come into conflict with Western civilisation led by the United States, in part due to a difference in cultural values and geopolitical goals. Where some would argue that Huntington’s claims were oversimplified and may broadly reinforce cleavages, especially in the aftermath of 9/11 and the War on Terror, his basic premise provides an interesting starting point to examining the impact of nationalism on the USA–China–Taiwan relationship. While Huntington viewed the incoming conflict as drawn along civilisational lines, assuming that cultural similarities and affinities would be sufficient to create groupings of nation-states around the world that would come into conflict with each other, recent events have proven otherwise. In fact, cases like Donald Trump’s threat to put a 25% tariff on Canadian imports when he assumes the presidency in January 2025 serve as a reminder that nationalism can easily overpower any sense of cultural affinity, even between nations as closely connected and allied as the United States and Canada (Hale, 2024). The advent of modernity brought about the rise of nationalism in the nation-state, and in the bid to give the nation-state’s existence legitimacy, each nationalism was propagated as individually unique. And as such, while cultural civilisations may not be a cleavage that thoroughly defines the world today, nationalism seems to be one that could fit into Huntington’s theory instead. Given the unique nationalisms of the United States, China and Taiwan covered in the sections above, it also appears that what is happening in this triangular relationship is a conflict arising from diametrically opposed nationalisms, a ‘clash of nationalisms’ if you will. Figure 1 summarises the interactions between the nationalisms of the United States, China and Taiwan.  Figure 1. Interaction Between Nationalisms. The United States having built a national identity that centred on a higher calling to being a model nation and leader of the world sees its position at the top of the global hierarchy as sacrosanct. The reason why the concept of the ‘Thucydides trap’ has gained so much attention is because there is an inherent acknowledgement that no matter the ills that may plague the United States, it is unwilling to see the global primacy it has established after the end of the Cold War being challenged (Mazza, 2024). However, China’s ascendency on the back of its rapid economic growth and the fact that it managed to emerge from the 2007–8 Great Financial Crisis relatively unscathed has given life to the belief in the PRC that their anointed time has finally come. Driven by Xi’s desire to push Chinese ethnonationalism as a foundation for the PRC’s assertiveness in the international arena, the world is now witnessing a China that seeks to act like a great power, including a demand for regional hegemony (Mazza, 2024). Yet regional hegemony for the PRC set it in direct conflict with the United States as regional hegemony in East Asia would mean the United States having to pull back on its global primacy and cede control over the region where it has key allies like Japan and South Korea. And this is exacerbated by the anti-West element of Chinese ethnonationalism that holds the West, with the United States being symbolic of it, responsible for the century of humiliation and the country not being the rightful great power it should have long been. As the saying goes, one mountain cannot contain two tigers, the nationalisms of both the United States and the PRC are dependent on the countries fulfilling their self-perceived destiny of greatness which naturally puts them into conflict with each other and is reflected in Figure 1. Similarly, Figure 1 also shows how the nationalisms of China and Taiwan are in conflict. As mentioned above, Chinese ethnonationalism and the ‘China Dream’ are also about washing away the shame from the century of humiliation. Part of this humiliation stems from the losses to the Japanese in the two Sino-Japanese wars, of which the loss of the island of Taiwan serves as a reminder of and it is for this reason that Xi has made clear that reunification between Taiwan and the mainland is a core part of his ‘national rejuvenation’ (Sobolik, 2024). Yet, in Taiwan, the evolution and rise of Taiwanese nationalism have led to a strong Taiwanese national identity that rejects its relationship with the Chinese mainland; increasingly Taiwanese are rejecting the Beijing-led discourse of a common identity between them and the mainland Chinese, and polling shows an increasing majority of Taiwanese no longer identify as Chinese (Fifield, 2019; Wang, 2023). This sets up the two nations in a path for conflict, a worse-case scenario that experts are predicting gets ever closer, as Taiwanese independence is a redline for China that cannot be crossed, but any form of reunification for the island is incompatible with their unique and independent national identity (Kuo, 2022; Wu, 2004). On the flip side, the relationship between American nationalism and Taiwanese nationalism is somewhat complementary, as shown in Figure 1. In examining American nationalism above, we pointed out how much of American nationalism is driven by American primacy in the form of American exceptionalism. This exceptionalism has been shown to have a messianic fervour, with Badri (2024) arguing that this has led to America’s interventionist foreign policy since 1991. Yet this messianic fervour makes American nationalism the perfect complement for Taiwanese nationalism. As Taiwanese nationalism tends towards de-sinicisation and independence, it has also gone through pains to emphasise its democratisation as a key characteristic of its nationalism. This results in America becoming a natural support pillar for the objectives of Taiwanese nationalism, while America’s messianic tendencies lead it to want to support Taiwanese democracy. As a result, American and Taiwanese nationalism become complementary existences. However, that the nationalisms are in conflict do not necessarily explain the existence of the triangular relationship that has seen the Taiwan Strait become the geopolitical ‘hotspot’ that it is. In order to do so, it is important to remember that nationalism is a double-edged sword when used by governments (Gries, 2020; Tan, 2023). Since 2016, we have seen the respective governments in all three countries increasingly turn to nationalism to further their own agendas (Kuo, 2022; Restad, 2020). Trump won his first presidential victory on the back of his ‘Make America Great Again’ slogan, which implied that the greatness of the American nation had been allowed to wane by his political predecessor. In doing so, Trump had unleashed a torrent of populism built upon conservative American nationalism that centred upon how powerful and great the country was perceived at the end of the Cold War and the longing for a return to those days (Renshon, 2021). In China, Xi, as previously mentioned, turned to the concept of the ‘China Dream’ in his bid to secure the legitimacy of the CCP and his hold over power. In his elaboration, it was the preeminent task of the CCP to restore the past glory of the nation and thereby, turn the dream of a great power nation into a reality, which would aid in making life better for the Chinese people (Bhattacharya, 2019). The rise of Chinese ethnonationalism has been successful in legitimising the position of the CCP in the wake of the political turmoil of the early 2010s and increasingly we have seen assertive Chinese expressions of this ethnonationalism, be it in its ‘Wolf Warrior’ diplomacy or cases of Chinese international students in university campuses in places like Australia, United States and the United Kingdom who openly challenge their lecturers and peers who comment on issues like Taiwan and Hong Kong (Tan, 2023). While in Taiwan, the DPP under Tsai Ing-wen latched on to the anti-Chinese sentiment of the 2014 Sunflower Movement and harnessed Taiwanese nationalism and desire to exist as a sovereign people to win the 2016 presidential election from the KMT (Chen & Zheng, 2022; Clark et al., 2020). Since then, the DPP has increasingly relied on Taiwanese nationalism to secure itself electoral victories, as it provides a clear delineation on the Taiwanese/Chinese cleavage between itself and the opposition KMT, while also allowing the government to create a narrative that differentiates Taiwan from the mainland, and therefore rouse support for its cause for international recognition (Lee, 2024). In each of these countries, we have seen political leaders turning to nationalism for their own domestic agendas. However, using nationalism in such manner also means that there is a significant consequence when the desires and dreams of the nationalism cannot be fulfilled, especially for regimes that have built their legitimacy on said nationalisms. To that end, the escalation of tension in the Taiwan Strait becomes understandable. Taiwanese nationalism has led to Tsai and the DPP to insist on Taiwanese sovereignty, even without the need for actual independence, but this has crossed the CCP’s red line and Chinese ethnonationalism necessitates a reaction in the form of increased military activity. The United States, having been bound to support Taiwan due to the Taiwan Relations Act, and in part to reassert its global hegemon status, thus sees it as imperative that it continue to be involved in the situation in the Taiwan Strait, either through freedom of navigation movements or selling of arms. As each side escalates their foreign policy response to the Taiwan Strait issue, audience costs for the political leaders also increase. Having unleashed the forces of nationalism, any semblance that the political leader is contemplating backing down would have serious implications on the stability of the domestic regime. This is even more so given the looming economic challenges in each of the three nations. Conclusion Therefore, the triangular relationship between the United States, China and Taiwan is not merely a product of power struggles or ideological conflicts but a ‘clash of nationalisms’. The interplay of unique national identities, reinforced by domestic pressures, has intensified the geopolitical stakes in the Taiwan Strait, transforming it into a critical hotspot in global politics. In understanding this, we can therefore see how nationalism is in fact an important factor that influences the interactions of states in IRs theories. Declaration of Conflicting InterestsThe authors declared no potential conflicts of interest with respect to the research, authorship and/or publication of this article.FundingThe authors received no financial support for the research, authorship and/or publication of this article.Cite: Tan, O., & Tan, A. C. (2025). 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한국어로 읽기 Leer en español In Deutsch lesen Gap اقرأ بالعربية Lire en français Читать на русском AbstractPurpose The purpose of this paper is to analyse the international political economy of Korea and its effects due to geopolitical tension between China and the USA. Design/methodology/approach Economic war between China and the USA has prolonged longer than expected. Aftermath of the COVID-19 pandemic, reforming the supply chain has been the centre of economic tension between China and the USA. Quite recently, with the rapid expansion of Chinese e-commerce platforms, distribution channels come upon a new economic tension between the two. And now is the time to pivot its pattern of conflict from competition into cooperation. In this end, economic diplomacy could be a useful means to give a signal of cooperation. From the view of economic diplomacy, this paper tries to analyse the projected transition of economic war between China and the USA with its implication on the trade policy of Korea. Findings As an implementation of economic diplomacy, China suggested the Belt and Road Initiative (BRI), enhancing trade logistics among related countries to gain competitiveness. In 2023, the Biden administration suggested the India-Middle East and Europe Economic Corridor as a counter to BRI, which will be a threshold for changing trade policy from economic war into economic diplomacy. As a result, it is expected China and the USA will expand their economic diplomacy in a way to promote economic cooperation among allied states, while the distribution channel war would continue to accelerate the economic tension between China and the USA. Korea has to prepare for and provide measures handling this geopolitical location in its trade policy or economic diplomacy. Originality/value This research contributes to the awareness and understanding of trade environments from the perspective of economic diplomacy. 1. Introduction The advent of globalisation has led to widespread economic integration, creating global production networks and markets. However, the COVID-19 pandemic has acted as a significant setback to this trend. In the wake of COVID-19, an economic war has arisen between China and the USA, centred on the restructuring of global supply chains following widespread disruptions. International political economy (IPE) examines the power dynamics between states and the structures of influence within regional economies. Consequently, economic diplomacy has gained unprecedented attention. Economic diplomacy focuses on government actions regarding international economic issues, distinct from political diplomacy through its market-oriented approach in foreign policy. Putnam (1988) categorises economic diplomacy into two levels: unilateralism and bilateralism. Unilateral economic diplomacy (or unilateralism) often relies on hard power, involving decisions on trade liberalisation or market protection without negotiation. Bilateral economic diplomacy (or bilateralism) or multilateral economic diplomacy (or multilateralism), by contrast, involves negotiation among trade partners, resulting in agreements such as regional or global free trade agreements (FTAs). A vast range of state or non-state actors engage in economic diplomacy, navigating the complex interplay between international and domestic factors. Defining economic diplomacy is extremely challenging, but one useful definition is “the broad concept of economic statecraft, where economic measures are taken in the pursuit of political goals, including punitive actions such as sanctions” (Blanchard and Ripsman, 2008).  Figure 1 Recent trend of economic diplomacy To exert influence internationally, ministers and heads of government strive to demonstrate their capacity for national security through two primary approaches, as shown in Figure 1 (above): economic war (or competition) and economic diplomacy (or international cooperation). In the context of global supply chain restructuring, the economic conflict between China and the USA has intensified, marked by threats of supply chain disruptions. This has led to emerging strategies aimed at “crowding out” the USA from global supply chains (去美戰略) or excluding China through alliances such as the Allied Supply Chain and Chip 4. While economic war is inherently “temporary” due to its painstaking nature, economic diplomacy or international cooperation offer a more “long-term” approach because it is gains-taking. This paper analyses the factors contributing to the prolonged nature of this economic war and explores potential outcomes of the supply chain tensions between China and the USA from the perspectives of IPE or geo-economics. In conclusion, it highlights the importance of preparing for trade policy adjustments and strategic economic diplomacy. 2. International trade war and strategic items2.1 Supply chain The supply chain encompasses a network of interconnected suppliers involved in each stage of production, from raw materials and components to the finished goods or services. This network can include vendors, warehouses, retailers, freight stations and distribution centres. Effective supply chain management is a “crucial process because an optimised supply chain results in lower costs and a more efficient production cycle” [1]. Within the supply chain, a leading company typically holds governance power, enabling it to coordinate scheduling and exercise control across the interconnected suppliers, resulting in reduced costs and shorter production times (Gereffi et al., 2005) [2]. Since the 2000s, forward and backward integration have been key strategies for managing time, cost and uncertainty in supply chains. For example, Toyota’s Just-In-Time (JIT) system demonstrated the efficiency of locally concentrated supply chains until disruptions from the 2011 East Japan Earthquake and the Thailand flood. Following supply chain shutdowns in 2020, many businesses shifted from local to global supply chains, utilising advancements of the information technology (IT) and transportation technologies to geographically diversify operations. As the need for a systematically functioning global supply chain has grown, a leading nation, much like a leading company, often assumes governance power in international trade and investment, as illustrated in Figure 2 (below), by aligning with the leadership of a dominant market competitiveness, which makes this leadership valuable.  Figure 2 Supply chain The COVID-19 pandemic dealt a severe blow to the global supply chain, causing sudden lockdowns that led to widespread supply chain disruptions. To mitigate the risks of future global disruptions, supply chains have begun restructuring to operate on a more regionally segmented basis. In this shift toward regional supply chains, China and the USA are at the centre, drawing allied countries within their spheres of influence. This alignment helps explain why the economic war between China and the USA has lasted longer than anticipated. 2.2 Strategic items China has restricted exports of two rare metals, gallium and germanium, which are critical to semiconductor production. Kraljic (1983) highlighted the importance of managing “strategic items” within the framework of supply chain management, as shown in Figure 3. Kraljic emphasises the need to strengthen and diversify critical items. The Kraljic matrix provides a valuable tool for identifying essential items that require focused management within the supply chain.  Figure 3 Kraljic matrix Kraljic identified the importance of managing “bottleneck items” in strategic supply chain management – items that present high supply risk but have relatively low business value. Due to the potential costs associated with non-delivery or compromised quality of strategic items, these must be closely monitored and controlled. From a risk management perspective, establishing medium-term business relationships and collaboration with suppliers is essential. For example, South Korea imports over 90% of its urea for agricultural and industrial purposes from China [3]. Heavily dependent on China for urea supplies due to pricing factors, Korea faced challenges when China imposed export controls on urea, underscoring Korea’s vulnerability within China’s sphere of influence. The European Union (EU) also faces challenges with critical raw materials (CRMs). China remains the EU’s sole supplier of processed rare earth elements, while Chile supplies 79% of its lithium. In response, the EU introduced the CRM Act (CRMA) to support projects aimed at increasing “the EU’s capacity to extract, process, and recycle strategic raw materials and diversify supplies from the third countries” [4]. 2.3 Resilient supply chain alliance In contrast to China’s approach of leveraging supply disruptions to strengthen its influence, the Biden administration in the USA has adopted a cooperative approach focused on building resilient supply chains (Pillar 2) through the Indo-Pacific Economic Framework (IPEF), which includes 14 member countries [5]. The need for resilient supply chains has been further underscored by the Russia–Ukraine crisis. The IPEF aims to address supply chain vulnerabilities by fostering global efforts to reduce risks associated with concentrated, fragile supply chains [6].  Figure 4 Resilient supply chain alliance In Figure 4, the EU Commission presented the Single Market Emergency Instrument (SMEI) in September 2022, a crisis governance framework designed to ensure the availability of essential goods and services during future emergencies. The SMEI operates on three levels: contingency planning, vigilance and emergency. The contingency planning phase focuses on collaboration among member states to mitigate supply chain disruption and monitor incidents. The vigilance phase can be activated when a significant disruption is anticipated, enabling specific measures such as mapping and monitoring supply chains and production capacities. Finally, the emergency phase is activated in cases of severe disruption to the functioning of the single market [7]. Establishing a resilient supply chain through international cooperation may be appealing, yet the reality often falls short of the ambition. In South Korea, the IPEF took effect on 17 April 2024, after an extended negotiation process, marking the first multilateral agreement on supply chains. As a result, during non-crisis periods, the 14 member countries will collaborate to strengthen international trade, investment and trade logistics. In times of crisis, member countries will activate a “crisis response network”. Conversely, opportunities for negotiation with China, South Korea’s largest trading partner, are essential for building supply chain resilience [8]. China has pursued an industrial policy focused on enhancing its supply chain management capabilities. In the semiconductor sector, the decoupling between China and the USA has become increasingly evident. Contrary to expectations, China has adopted a policy of internalising its supply chains, returning to the integration strategies of the 2000s rather than furthering globalisation. A promising opportunity for transformation between the two countries has emerged recently. Since 2015, China and South Korea have maintained bilateral FTA, and with the second phase of FTA negotiations currently underway, there is an opportunity to strengthen trade and investment ties, fostering positive progress through international cooperation. 2.4 China manufacturing exodus During the COVID-19 pandemic, China imposed sudden lockdowns without prior notice or preparation, halting production and logistics cycles. This “zero COVID” policy may have triggered a shift towards “de-risking” China from supply chain disruptions. Although China still offers significant advantages as “the factory of the world,” with vast market potential, prolonged trade tensions with the USA, intensified during the Trump administration, have prompted global manufacturers with substantial USA market bases to relocate operations amid rising geopolitical uncertainties. For example, Nike and Adidas have shifted much of their footwear manufacturing to Vietnam, Apple has begun iPhone production at a Foxconn in Chennai, India, and AstraZeneca has contracted production with India’s Serum Institute. In the pre-globalised era, defining the Rule of Origin (ROO) was straightforward, as a product’s components were usually manufactured and assembled within a single country. However, with the complexity of global supply chains, particularly since 2012, determining ROO has become a time-consuming and subjective process. ROO are classified as either non-preferential or preferential. The USA applies non-preferential ROO to restrict imports from countries like Cuba, Iran and North Korea, while offering trade preference programmes for others. Preferential ROO are used to determine duty-free eligibility for imports from approved countries [9], whereas non-preferential ROO play a crucial role in “country of origin labelling, government procurement, enforcement of trade remedy actions, compilation of trade statistics, supply chain security issues.” [10] China manufacturing exodus may negatively impact capital inflows into Hong Kong, traditionally seen as the Gateway to China. In 2023, Hong Kong’s initial public offering volume fell to a 20-year low of $5.9bn [11]. While China-oriented business remains in Hong Kong, which returns fully to Chinese control in 2047, non-China-oriented businesses have migrated to Singapore. As the certainty of contract and ownership rights forms the foundation of capitalism, this capital flight from Hong Kong is likely to persist. 3. Trade logistics and economic corridors Globalisation has allowed supply chains to leverage interdependence and interconnectedness, maximising efficiency. However, while these efficiencies have been beneficial, they have also created a fertile ground for friction between trade partners due to a “survival of the fittest” mindset and the principle of “winner takes all.” This interdependence has also highlighted vulnerabilities; the global supply chain struggled to manage the disruptions caused by COVID-19, prompting a shift towards regional integration initiatives, such as Association of Southeast Asian Nations, Regional Comprehensive Economic Partnership, United States–Mexico–Canada Agreement and Comprehensive and Progressive Agreement for Trans-Pacific Partnership. As the global economy seeks stability, collaboration over competition has become increasingly essential, with economic diplomacy emerging as a priority. The prolonged economic war between China and the USA arguably needs to shift towards economic diplomacy. The global supply chain is restructuring into regional supply chains, building resilience by operating in regional segments that can withstand crises. Michael Porter introduced the concept of value chain as “a set of activities that a firm performs to deliver a valuable product or service to the market.” [12] Complex finished goods often depend on global value chains, traversing multiple countries. As shown in Figure 5, the value chain consists of supply chain and trade channel components. While the focus has traditionally been on which country holds lead status within a regional supply chain, the emphasis is now shifting to how these regional segments can be interconnected and relayed. In this context, the supply chain competition may evolve into a “channel war” in international trade, where trade logistics will centre on the internal flow of goods, standardising channel processes and establishing authority over these channels.  Figure 5 Supply chain v. trade channel 3.1 Trade logistics It is natural for governments to seek environments that enhance competitiveness within in their countries. In terms of trade, effective trade logistics are essential for maintaining competitive advantage. As a prerequisite, a strong IT management infrastructure is indispensable. As shown in Figure 6, trade logistics encompass the internal flow of goods to market, integrating physical infrastructure with operating software – such as transport hubs, warehouses, highways, ports, terminals, trains and shipping vessels. Key areas of conflict in trade logistics involve the standardisation of channel processes and determining who holds governance over operation of these logistics systems. This is equally relevant within the digital economy. Recently, Chinese e-commerce – often referred to as C-commerce – has aggressively sought to gain control over digital distribution channels, interconnected delivery networks and trade logistics via digital platforms. Chinese platforms such as Taobao, Temu and AliExpress are actively working to increase their monthly active users (MAUs), positing themselves as counterweights to USA-based platforms such as Amazon and eBay in digital trade [13].  Figure 6 Trade logistics When the agenda of establishing international trade logistics is introduced to relevant trade members across various countries, initial progress and effective responses are often achieved. However, efforts soon encounter obstacles related to standardising logistics processes and establishing operational governance. Greater reliance on international institutions could help resolve these issues (Bayne, 2017). Yet governments frequently prioritise domestic interests, and after prolonged negotiations, the risk of international agreements failing increases. Amid the economic war between China and the USA, China launched a trade logistics initiative known as the Belt and Road Initiative (BRI), or One Belt One Road, in 2013. Often referred to as the New Silk Road, the BRI aims to establish economic corridors for trade logistics. The World Bank estimates that the BRI could boost trade flows by 4.1% and reduce trade costs by 1.1% [14]. In response, the Biden administration proposed the India-Middle East and Europe Economic Corridor (IMEC) in September 2023 to strengthen transport and communication links between Europe and Asia as a countermeasure to China’s BRI. IMEC has been well received by participating countries, with expectations of fostering economic growth, enhancing connectivity and potentially rebalancing trade and economic relations between the EU and China [15]. Both BRI and IMEC are ambitious projects aimed at boosting international trade through substantial investments in trade logistics infrastructure. Each seeks to assert governance over international trade channels, signalling that the supply chain war may soon evolve into a trade channel war between China and the USA. 3.2 Economic corridors Economic corridors are transport networks designed to support and facilitate the movement of goods, services, people and information. These corridors often include integrated infrastructure, such as highways, railways and ports, linking cities or even countries (Octaviano and Trishia, 2014). They are typically established to connect manufacturing hubs, high-supply and high-demand areas, and producers of value-added goods. Economic corridors comprise both hard infrastructure – such as trade facilities – and soft infrastructure, including trade facilitation and capacity-building measures. The Asian Development Bank introduced the term “economic corridor” in 1998 to describe networks connecting various economic agents within a region [16]. Economic corridors are integrated trade logistics networks, providing essential infrastructure for connecting regional segments of supply chains. As supply chains increasingly operate in regional “chunks,” linking these segments becomes ever more important. Economic corridors typically include a network of transport infrastructure, such as highways, railways, terminals and ports. Initiatives like the BRI and IMEC use economic corridors as instruments of economic diplomacy, shifting strategies from hard power to soft power, as shown in Figure 7. Because less-developed or developing countries often lack sufficient funding to invest in trade logistics, they tend to welcome these initiatives from developed countries, which offer international collaboration and support. However, these initiatives usually come with the condition that participating countries must accept standardised trade processes and governance led by the sponsoring developed country.  Figure 7 Economic corridor initiatives as economic diplomacy To succeed, economic corridors must meet three key conditions [17]. First, government intervention is essential, as economic corridor initiatives primarily involve public infrastructure investments beyond the scope of the private sector. In realising these projects, governments must reconcile three tensions to ensure their policies are mutually supportive: tensions between politics and economics, between international and domestic pressures and between governments and other stakeholders. Second, intermediate outcomes should be measured and demonstrated as results of economic corridors, allowing participants to experience tangible benefits throughout these longer-term projects. Finally, economic corridors should deliver broader benefits. Participants need incentives to utilise the infrastructure sustainably. These benefits may extend beyond economic welfare, such as wages and income, to include social inclusion, equity and environmental gains, which support the long-term viability of the infrastructure. 4. BRI vs IMEC4.1 Belt and Road Initiative (BRI) - Silk Road The BRI can be a modern-day realisation of the Silk Road concept, connecting Europe as a market base with China as a production base. Unlike the ancient Silk Road, which connected trade routes across Eurasia, the BRI poses potential challenges due to its extensive connectivity. Firstly, there are social and environmental externalities, such as increased congestion and accidents from concentrating traffic flows through limited links and nodes within trade networks. Secondly, while the connectivity may benefit the production and market bases at either end, regions situated between these hubs, through which highways and railways pass, may gain minimal advantage. Thirdly, there is often a mismatch between where costs and benefits are realised. Transit regions that facilitate network traffic often see fewer direct benefits compared to high-density nodes within the network. 4.2 India-Middle East and Europe Economic Corridor (IMEC) - The Spice Road The ancient Spice Roads once connected the Middle East and Northeast Africa with Europe, facilitating the exchange of goods such as cinnamon, ginger, pepper and cassia, which, like silk, served as a form of currency. The IMEC proposes a modern route from India to Europe through the United Arab Emirates (UAE), Saudi Arabia, Israel and Greece. Since its announcement in September 2023, some regional experts have expressed reservations about its feasibility, particularly regarding the connection between the Middle East and Israel. The project has faced delays due to the Israel–Hamas war. Despite these challenges, IMEC holds potential to drive economic growth and strengthen connectivity, especially as countries like Vietnam and India emerge as alternative manufacturing bases for companies relocating from China. For Saudi Arabia and the UAE, IMEC is not viewed as a challenge to China but rather as an opportunity to diversify their economies and solidify their roles within the Middle East region [18]. 5. Conclusion A new trade war between China and the USA has begun, with the Biden Administration’s introduction of IMEC as a counter to China’s BRI. This shift could soon transform the nature of economic war from a focus on supply chains to one on trade channels. The China manufacturing exodus was further accelerated by supply disruptions during the COVID-19 pandemic. Amidst the economic tensions between China and the USA, the restructuring of global supply chains into regional networks has made significant progress. With China maintaining its stance on export controls for strategic items, South Korea must prepare for resilient supply chain management. In relation to China–Korea FTA, which is currently undergoing its second phase of negotiation, South Korea should seek clarity on the transparency of China’s strategic item controls. The Committee on Foreign Investment in the United States (CFIUS) plays a key role in monitoring the quality of inbound investments; similarly, South Korea is experiencing increased inbound investment due to the manufacturing shift from China and should apply similar standards to evaluate investment quality. This emerging economic war between China and the USA is now marked by the competing initiatives of the BRI and IMEC. The BRI can be viewed as a modern Silk Road, linking China with Europe, while the IMEC seeks to establish a trade logistics corridor connecting Saudi Arabia, the UAE, Israel and Greece. The South Korean Government should take proactive steps to prepare for the evolving dynamics of the trade war between China and the USA. CitationOh, J.S. (2025), "International trade war - Spice Road against Silk Road", International Trade, Politics and Development, Vol. 9 No. 1, pp. 2-11. https://doi.org/10.1108/ITPD-06-2024-0031  Notes 1. https://www.investopedia.com/terms/s/supplychain.asp2. According to Gary Gereffi et al, 5 governance types of a lead company could be categorised as market, modular, relational, captive and hierarchy.3. Korea imports urea from 12 countries including Qatar, Vietnam, Indonesia and Saudi Arabia, in addition to China.4. https://single-market-economy.ec.europa.eu/sectors/raw-materials/areas-specific-interest/critical-raw-materials/strategic-projects-under-crma_en5. IPEF was launched on May 23,2022 at Tokyo. 14 member countries are Australia, Brunei, Fiji, India, Indonesia, Japan, Republic of Korea, Malaysia, New Zealand, Philippines, Singapore, Thailand, Vietnam and the USA. 4 Pillar of IPEF are Trade (Pillar 1), Supply Chain (Pillar 2),Clean Economy (Pillar 3) and Fair Economy (Pillar 4).6. Critics say “lack of substantive actions and binding commitments, instead focusing on process-driven framework building.” https://www.piie.com/blogs/realtime-economics/its-time-ipef-countries-take-action-supply-chain-resilience7. https://ec.europa.eu/commission/presscorner/detail/en/ip_22_54438. As of 2023, the first-largest trade partner of Korea is China (Trade volume of $267.66bn), the second is the US ($186.96bn) and the third is Vietnam ($79.43bn)9. As preferential ROO contain the labour value content requirement in the USMCA, it could increase compliance costs for importers. https://crsreports.congress.gov/product/pdf/RL/RL3452410. USITC(1996), Country of Origin Marking: Review of Laws, Regulations and Practices, USITC Publication 2975, July, pp. 2–411. https://www.barrons.com/articles/hong-kong-financial-center-china-46ba5d3612. Porter identifies a value chain broken in five primary activities: inbound logistics, operations, outbound logistics, marketing and sales and post-sale services. https://www.usitc.gov/publications/332/journals/concepts_approaches_in_gvc_research_final_april_18.pdf13. MAU is a metric commonly used to identify the number of unique users who engage with apps and website. MAU is an important measurement to the level of platform competitiveness in the digital trade logistics or e-commerce industry.14. https://home.kpmg/xx/en/home/insights/2019/12/china-belt-and-road-initiative-and-the-global-chemical-industry.html15. https://www.bradley.com/insights/publications/2023/10/the-india-middle-east-europe-economic-corridor-prospects-and-challenges-for-us-businesses16. The Asian Development Bank (ADB), which first used the term in 1998, defines economic corridors as important networks or connections between economic agents along a defined geography, which link the supply and demand sides of markets. http://research.bworldonline.com/popular-economics/story.php?id=350&title=Economic-corridors-boost-markets,-living-conditions17. Legovini et al. (2020) comments traditional cross border agreements of transport investment focuses only on a narrow set of direct benefits and cost. However, economic corridors can entail much wider economic benefits and costs such as trade and economic activity, structural change, poverty reduction, pollution and deforestation.18. Arab Centre Washington D.C. https://arabcenterdc.org/resource/the-geopolitics-of-the-india-middle-east-europe-economic-corridor/ References Bayne, N. (2017), Challenge and Response in the New Economic Diplomacy, 4th ed., The New Economic Diplomacy, Routledge, London, p. 19.Blanchard, J.M.F. and Ripsman, N.M. (2008), “A political theory of economic statecraft”, Foreign Policy Analysis, Vol. 4, pp. 371-398, doi: 10.1111/j.1743-8594.2008.00076.x.Gereffi, G., Humphrey, J. and Sturgeon, T. (2005), “The governance of value chain”, Review of International Political Economy, Vol. 12 No. 1, pp. 78-104, doi: 10.1080/09692290500049805.Kraljic, P. (1983), “Purchasing must be supply management”, Harvard Business Review, Vol. 61 No. 5, September.Legovini, A., Duhaut, A. and Bougna, T. (2020), “Economic corridors-transforming the growth potential of transport investments”, p. 10.Octaviano, B.Y. and Trishia, P. (2014), Economic Corridors Boost Markets, Living Conditions, Business World Research, Islamabad, October.United States International Trade Commission (USITC) (1996), “Country of origin marking: Review of Laws, Regulations, and Practices”, USITC Publication, Vol. 2975, July, pp. 2-4.Further readingPorter, M. (1985), Competitive Advantage: Creating and Sustaining Superior Performance, Free Press.Putman, R.D. (1988), “Diplomacy and domestic politics; the logic of two-level games”, International Organization, Vol. 42 No. 4, pp. 427-600.USITC (2019), “Global value chain analysis: concepts and approaches”, Journal of International Commerce and Economics, April, pp. 1-29.

한국어로 읽기 Leer en español In Deutsch lesen Gap اقرأ بالعربية Lire en français Читать на русском Abstract Observers have noted that Washington’s policy of ‘strategic ambiguity’ aims not only to deter China from attacking Taiwan but also to keep Taipei from taking actions that may be deemed provocative by Beijing leaders. Remarks and actions taken by former United States President Joseph Biden seem to place America’s long-held ambiguous policy in doubt. It has been argued that a clear security commitment from Washington is likely to bolster Taiwan citizens’ unrealistic expectations of America’s defence support and their calls for independence, which will certainly invite Beijing’s violent responses. Employing the theory of deterrence and survey data collected in Taiwan during the past 20 years, this article examines this argument. The analysis shows that the policy of strategy ambiguity remains crucial for the peace and stability across the Taiwan Strait. As China has increasingly turned itself to become a revisionist, Washington’s policy requires a recalibration, and the adjustment does not have to be a binary choice between ambiguity and clarity. Donald Trump’s return to the White House with his transactional approach to international affairs makes US policy towards the Taiwan issue less predictable, potentially leading to a volatile Taiwan Strait during his second term. Introduction One of the key aspects of US policy towards Taiwan since 1979 has been its ambiguous posture. With an objective of maintaining cross-strait peace and stability, Washington’s policy is based on its version of the ‘one-China’ policy, the Taiwan Relations Act (TRA), the three United States–China communiques and ‘Six Assurances’ (Congressional Research Service, 2024). Under this framework, Washington acknowledges that there is only one China and maintains an unofficial relationship with Taipei. The United States supports Taiwan with weapons of a defensive character and will ‘resist any resort to force or other forms of coercion that would jeopardise the security, or the social or economic system, of the people on Taiwan’ (TRA, Section 2(6)) but it does not clarify what would trigger an American military response. The deliberate uncertainty about whether the United States would intervene in cross-strait conflicts distinctively characterises Washington’s policy of strategic ambiguity. Former United States President Joseph Biden’s repeated security pledges to Taiwan since taking office in 2021 seem to place this policy in doubt. Biden’s response to a reporter of CBS 60-Minutes was unequivocal. When being asked, ‘So unlike Ukraine, to be clear, sir, US forces—US men and women—would defend Taiwan in the event of a Chinese invasion?’ Without hesitation, Biden replied, ‘Yes, if in fact, there was an unprecedented attack’ (Pelley, 2022). Although White House officials later repeatedly indicated that America’s policy towards Taiwan had not changed, Biden’s remarks generated a new round of discussion (e.g., Benson, 2022; Christensen et al., 2022) since this was the fourth time that the President made such a pledge.1 Critics point out that Washington’s deliberate ambiguity about America’s military intervention is not merely designed to deter China from attacking Taiwan. By intentionally being vague on its defence commitment, the policy also intends to keep Taipei from taking actions that may be deemed provocative by Beijing leaders (Bush, 2006). Survey data have consistently shown that few on the island are willing to be ruled by the Chinese Communist government and the majority would opt for independence if a war with China can be avoided (Hsieh & Niou, 2005; Wang, 2017). An unconditional security guarantee from Washington is likely to bolster Taiwan citizens’ unrealistic expectations of America’s defence support and their calls for independence. Because Taiwan is a democracy, the popularly elected Taipei government could take aggressive actions under public pressure, which will certainly invite Beijing’s military attacks and drag the United States into an unwanted war with China. Employing the theory of deterrence and survey data collected in Taiwan during the past 20 years, this article attempts to examine this logic with the following research questions: What is the logic behind Washington’s policy of strategic ambiguity? Why is there a call for clarity in the first place? And, what are the concerns about a policy of clarity? What would Donald Trump’s second term as the President of the United States mean for Washington’s policy on Taiwan? The Functioning of Strategic Ambiguity Fierce fighting broke out between troops led by the Nationalist Party (Kuomintang or KMT) and the Chinese Communist Party (CCP) on the Chinese mainland at the end of the Second World War. Under the weight of corruption, the KMT government suffered a disastrous military defeat and retreated to the island of Taiwan. As geopolitical tension mounted, Washington signed a mutual defence treaty with Taipei to contain the expansion of Communism. Several major battles were fought in the 1950s and 1960s across the Taiwan Strait. With America’s assistance, Taipei thwarted Communist military attacks on offshore islands held by Taiwan. The 1970s saw a shift in China’s strategy away from a reliance on the ‘military liberation’ of the island to a wave of ‘peaceful initiatives’ for China’s unification. However, Chinese leaders continue to regard Taiwan as a renegade province and have refused to recognise it as an equal and legitimate negotiating partner. Attempting to coerce Taipei into acceptance of the unification formula known as ‘one country, two systems’, Beijing has repeatedly warned that it would use ‘any means it deems necessary, including military ones’ (State Council of the PRC, 1993). Taipei’s loss of United Nations (UN) membership in 1971 and the normalisation of relations between China and the United States in 1972 signified Beijing’s decisive diplomatic victory. China’s growing importance in international affairs has led many countries, including the United States, to break diplomatic relations with Taiwan. After the United States and China established official ties in 1979, Washington has maintained an ‘unofficial’ relationship with Taipei. With an aim to maintain cross-strait peace and stability, the policy of strategic ambiguity was gradually articulated in the subsequent years and has become America’s key policy towards the Taiwan issue. In essence, strategic ambiguity is a policy of deterrence aiming to prevent a target state from taking unwanted actions. The deterrent effect is accomplished by the deterring state’s threat of taking actions that will potentially deny the target state’s expected gains or punish it to the extent that the costs of the unwanted acts exceed the gains it hopes to acquire. In order to be effective, the deterring state needs to show that it (a) possesses sufficient retaliatory capability to deny the fruits of unwanted actions; and (b) has the resolve to use the force so that the target state is persuaded that the threats are credible (Chan, 2003; Christensen, 2002; Wang, 2010). As the world’s only superpower, few countries can withstand the weight of American power if it were deployed against them. Washington has also demonstrated that it has the resolve to use force, as the 1995–1996 Taiwan Strait Crisis has shown. Triggered by Beijing’s military exercises and missile tests aiming to intimidate Taiwan voters on the eve of the island country’s first popular presidential election, the Clinton administration responded by dispatching two aircraft carrier battle groups to the vicinity of Taiwan. Although some may question Washington’s resolve due to the perceived decline of American power, wars in Iraq and in Afghanistan still serve as reminders of its resolve of deploying military might. Previous literature has demonstrated that credible threat is not sufficient to deter unwanted behaviour, as an effective deterrence also needs convincing assurance (Christensen, 2002; Christensen et al., 2022; Schelling, 1966). The target state will have little incentive to comply with the deterring state’s demand if it believes that it will ultimately lose its principal values. This is why various United States administrations have repeatedly assured Chinese leaders that Washington does not support Taiwan independence lest Beijing use force to realise its cause of unification for fear of Taiwan’s permanent separation from China. The flip side of this logic is to remind Taipei that America’s security commitment is not without conditions. The goal is to discourage Taiwan from taking aggressive actions towards independence, which will certainly provoke military attacks from China. Thus, the potential of taking actions to impose costs that outweigh the benefits of an unwanted action is a form of deterrence. The prospect of inaction can also exert a deterrent effect as it can raise the expected cost of unwanted acts of the target state. Washington’s ambiguous posture is said to have the effect of ‘dual deterrence’ (Bush, 2006). On the one hand, it deters Beijing from using military force against Taiwan since Chinese leaders are unsure if Washington would be involved militarily. On the other hand, it dissuades Taipei from pursuing de jure independence so that cross-strait military conflicts can be avoided. Through a web of incentives and disincentives, Washington’s strategic ambiguity has been praised as one of the most successful foreign policies as it has maintained cross-strait peace and stability for several decades. Why the Call for Clarity? If Washington’s policy has been effective, why are there calls for change? The answer lies in China’s revisionist behaviours, which have become increasingly assertive and aggressive. Indeed, deterrence diplomacy is effective only when targeted actors are conditional revisionists. Christensen (2002) provides a useful typology of different political actors for analysis. Countries like Japan, France and the United Kingdom (UK) are ‘unprovokable friends’ of the United States. They may be annoyed with Washington’s policies from time to time, like France’s fury over a submarine deal after Australia cancelling a multi-billion-dollar order with a French company and turning to the United States and the UK for a new contract (Sanger, 2021). The governments of these countries have no intention to challenge America’s fundamental national interests. Nor does Washington see them as potential threats. While deterrence diplomacy is not needed for unprovokable friends, there are also ‘undeterrable ideologues’ to whom the threat of deterrence is futile. Political actors like Hitler’s Germany and Osama bin Laden’s Al-Qaeda network are determined to pursue their political objectives and simply cannot be dissuaded. In addition to unprovokable friends and undeterrable ideologues, there is a third type of political actor—‘conditional revisionists’. They are willing to exploit opponents’ weaknesses in order to change the status quo but would refrain from taking action unless opportunities arise. Because the deterring state can hold the target state’s prized possessions hostage while at the same time provide convincing assurance, the latter has the incentive to comply with the former’s demands. This logic underlies the success of strategic ambiguity because, for much of the time since 1979, China did not possess the capabilities to directly or indirectly coerce Taiwan or challenge America’s deterrence policy. The world has witnessed a different China since the end of the twentieth century as the country has experienced rapid economic expansion. Figure 1 shows that China’s annual GDP growth rates between 1981 and 2023 generally ranged from 7.5% to 10%. With its enormous economic resources, Beijing has launched an effort to modernise its military. During the 20-year period between 1989 and 2010, as Figure 2 demonstrates, China’s military expenditures as a percentage of government spending were between 7% and 17%, far exceeding those of Japan, France and the UK. In addition to acquiring new weapon systems, the People’s Liberation Army has also developed anti-access area denial capabilities, raising concerns among American officials (Maizland, 2020; Olay, 2024). Such capabilities aim to neutralise the United States and its allies’ ability to project power in the Western Pacific region, including in the area close to Taiwan. Beijing, in recent years, has aggressively expanded its military presence in the South China Sea (Centre for Preventive Action, 2022), engaged in border disputes with India, and constructed military outposts in Bhutan (Barnett, 2021). China has also built numerous ‘re-education camps’ in Xinjiang, engaged in ‘serious’ human rights violations against Uyghurs and other Muslim minorities in the region (UN Human Rights Office of the High Commissioner, 2022) and imposed repressive responses to the pro-democracy movement in Hong Kong (Wang, 2023). With Beijing’s continuing alignment with Moscow after Russia’s invasion of Ukraine, Chinese leaders have shown to the world that they are willing to defy international opinions and forcefully assert their growing power inside and beyond China’s boundaries.  Figure 1. China’s GDP Growth Rate: 1961–2023.Source: World Bank Group (various years-a).  Figure 2. Military Expenditure by Country as a Percentage of Government Spending: 1989–2023.Source: SIPRI (various years). In this context, aggregated national power has increasingly shifted to Beijing’s favour over the past decades. Figures 3 and 4 juxtapose Taiwan’s and China’s gross domestic product and total military expenditures since the late 1980s. Prior to 2000, as Figure 3 shows, China’s annual GDPs were only two to four times larger than Taiwan’s, but the ratio has expanded to more than 10 times since 2008. By 2010, China overtook Japan to become the world’s second largest economy, far exceeding Taiwan’s economic productivity. Meanwhile, China’s military spending has been 10–20 times that of Taiwan’s since 2009, as Figure 4 demonstrates. After Chinese leaders invalidated their promises of a ‘high-degree of autonomy’ to Hong Kong under the unification plan, observers believe Taiwan is their next target (Lopez, 2022). Since Tsai Ing-wen of the pro-independence Democratic Progressive Party (DPP) was elected Taiwan’s president in 2016, Beijing has furthered its effort of isolating Taipei internationally and escalated its belligerent behaviours by repeatedly dispatching naval vessels and warplanes circulating the island and violating its Air Defence Identification Zone (ADIZ; refer to Ministry of National Defence R.O.C., various years). In recent years, Chinese leaders further heightened their military pressure by repeatedly launched live-fire drills in water close to Taiwan, frequently with a record number of military aircraft and naval vessels (Ng & Wingfield-Hayes, 2024). China’s rapid technological advancement also allows it to infiltrate Taiwan’s IT infrastructure (Lonergan & Mueller, 2022). These developments have led to a warning from United States Navy Admiral John Aquilino in 2021 that China could be prepared to take Taiwan by force by 2027 (Lendon, 2021).  Figure 3. Ratio of China and Taiwan Gross Domestic Productivity: 1991–2023.Source: World Bank Group (various years-b) and National Statistics, R.O.C. (Taiwan) (various years).  Figure 4. Ratio of China and Taiwan Military Expenditures: 1989–2023.Source: SIPRI (various years). Observers, therefore, have noted that China is no longer a conditional revisionist but has turned into a revisionist that has the ability and intention to change the status quo. Some in the United States argue that ambiguity is unlikely to deter an increasingly assertive and threatening China towards Taiwan. Instead, they maintain, ‘[t]he time has come for the United States to introduce a policy of strategic clarity: one that makes explicit that the United States would respond to any Chinese use of force against Taiwan’ (Haass & Sacks, 2020). This is a view that the Biden administration also holds. Characterising China as a revisionist with both the intent and the ability ‘to reshape the international order’, the Biden administration acknowledged that China is the greatest challenger to the United States and its allies (White House, 2022, p. 23). Because ‘we cannot rely on Beijing to change its trajectory’, it is upon Washington to ‘shape the strategic environment around Beijing’ (Blinken, 2022). Thus, supporting Taiwan and strengthening its defence capabilities are crucial for America’s response to China’s growing coercion. Observers also point out that Washington’s ambiguous posture, while aiming to discourage unwanted actions of targeted states, may lead to miscalculation and risky behaviours. Leaders in both Beijing and Taipei have ‘obvious incentives to misrepresent their true perceptions concerning United States resolve’ (Kastner, 2006, p. 662). The tendency is particularly strong for Chinese leaders as the equation that previously made ambiguity a feasible policy has changed. Rather than maintain stability, it is argued, ambiguity may contribute to cross-strait instability and drag the United States into an unwanted conflict with China. In addition, no response to a Chinese military invasion of a democratic Taiwan would damage Washington’s reputation as the guardian of democracy and create the perception that the United States is not a reliable partner (Schmitt and Mazza, 2020). If American allies in the region conclude that Washington can no longer be counted on, they would be likely to accommodate Beijing’s demands as a result. Alternatively, some in the region may band together to balance a rising China, leading to tension and instability in one of the most dynamic areas of international commerce. Both would threaten America’s interests in the region and hurt Washington’s global leadership. Beijing’s forceful takeover of Taiwan would mean that China could then project its naval power beyond the first island chain, directly threatening the maritime security of the United States and its allies. Taiwan’s autonomy has also become a vital geopolitical interest and a national security issue for the United States due to the island’s dominant role in the semiconductor manufacturing market. It is estimated that the United States and other countries would lose access to 85% of all leading-edge microprocessors if China were to invade Taiwan tomorrow (Fadel, 2022). Beijing’s threatening military exercises, after United States House Speaker Nancy Pelosi’s visit to Taipei and the inauguration of pro-independence Lai Ching-te as Taiwan’s president, further underscore the need of revising the policy of strategic ambiguity. There have been a number of developments in the first Trump administration reflecting the growing sentiment that Beijing’s revisionist behaviour needs a robust and unambiguous response, including an unambiguous support for Taiwan. These included dispatching cabinet-level officials and military officers to Taipei and selling a large quantity of advanced weapons to Taiwan. The United States Congress also passed the Taiwan Travel Act of 2018 and the Taiwan Allies International Protection and Enhancement Initiative (TAIPEI) of 2020. The former permits high-level United States officials to travel to Taipei and meet their Taiwanese counterparts, while the latter aims to assist Taiwan in maintaining existing diplomatic relations. After Biden took office in 2021, his administration has further pursued a coherent and comprehensive approach for ‘broadening and deepening’ United States–Taiwan relations. It includes inviting Taiwan’s de factor ambassador to the United States as an official guest to the presidential inauguration (Blanchard, 2021), dispatching a delegation to Taipei sending a ‘personal signal’ of support from the President (Brunnstrom & Martina, 2021), providing large packages of arms sales (Chung et al., 2024), strengthening bilateral economic ties, and re-confirming Taiwan’s status as a major non-NATO ally (US Government Publishing Office, 2022). All of these efforts aim to advance the island country’s security, prosperity and respect in the international community. The Biden administration’s efforts to internationalise the Taiwan issue have been further noted. Wording like ‘the importance of peace and stability across the Taiwan Strait’ was mentioned at the United States–Japan (White House, 2021b), United States–Korea (White House, 2021a), Japan–Australia (Prime Minister of Australia, 2022) and G7 summits (European Council, 2021). For the first time, the issue of Taiwan’s security has been included in the communique of so many major powers’ summit meetings, which shows the Biden administration’s effort of building an international coalition to constrain a threatening China that will benefit Taiwan. In this context, Biden has repeatedly vowed to defend Taiwan, indicating that the United States would intervene militarily in the event of a Chinese invasion, prompting many to speculate if Washington has changed its long-standing policy of strategic ambiguity. Issues with Clarity Critics point out that a policy of strategic clarity involves risks. Chief among those is a clear security pledge like the one given by Biden, which is likely to bolster Taiwan citizens’ unrealistic expectation of America’s defence support, which will then motivate the public’s calls for independence. Under public pressure, the popularly elected Taipei government could take aggressive actions and will provoke a violent reaction from Beijing. Meanwhile, the public’s overconfidence does not match America’s military actions that would support an ally or a friend (Benson, 2022). The Biden administration’s decision to provide Ukraine with security assistance but refrain from putting American boots on the ground clearly demonstrates Washington’s reluctance to undertake direct military intervention in overseas conflicts. Taiwan citizens’ impracticable confidence in the United States’ defence commitment may destabilise the cross-strait relationship and bring harm to the island country. Thus, some pundits consider Biden’s move towards a policy of clarity ‘reckless’ (e.g., Beinart, 2021). The above concern is a valid one. Figure 5 presents the trend of public preferences on Taiwan’s international status during the past two decades. The top two dashed lines show that roughly 15%–35% of Taiwanese citizens prefer the status quo indefinitely, and about one-third of them are ‘undetermined’ regarding the island’s future status in the international community. The middle two solid lines show that there is a small but increasing proportion of respondents prefer to keep the status quo now but move towards independence in the future, and that proportion has increased quite dramatically since 2018. An even smaller and declining proportion of them favour unification as a final goal. The bottom two dashed lines indicate that less than 10% of the island’s residents want to pursue immediate unification or independence. Taken together, the figure demonstrates that very few on the island want to be ruled by the Chinese Communist government as it is now. The vast majority of them want to maintain the status quo and prefer either a ‘kinder, gentler’ version of de facto independence, that is, maintaining status quo forever, or a permanent separation from China in the future.  Figure 5. Taiwan Citizens’ Position on Independence and Unification: 1994–2024.Source: Election Study Center, National Chengchi University (January 13, 2025). While Taiwan’s citizens prefer to preserve their democratic way of life, they understand the pursuit of independence will encounter violent reaction from China. Figure 6 shows that the majority of the public express a preference for de jure independence if cross-strait conflicts could be averted, but support for independence declines substantially if they believe that Beijing would launch an attack on Taiwan.2 Figure 7 also shows that 50%–60% of island citizens consistently believe that the United States will come to Taiwan’s defence if China launches an attack. The level of confidence is particularly high among supporters of the ruling DPP, which has a plank of pursuing Taiwan’s de jure independence. The above figures reveal that the public’s preferences over the island’s future relations with China are consistently conditioned by perceived risks. That is, they will refrain from declaring Taiwan’s independence if it involves such high risks as warring with China. The conditionality of Taiwanese citizens’ preferences indicates that, collectively, they are conditional revisionists; that is, they would refrain from taking actions unless opportunities arise. In addition, the public is highly confident that the United States will come to Taiwan’s aid if there is a cross-strait military conflict. Thus, strategic clarity is likely to further bolster Taiwan citizens’ unrealistic expectation of Washington’s security commitment as well as their support for policies that may be deemed provocative by Beijing leaders.  Figure 6. Support Independence With/Without War With China, 2003–2024.Source: Program in Asian Security Studies (Various years).  Figure 7. Taiwan Citizens’ Confidence in United States Security Commitment: 2003–2020.Source: Program in Asian Security Studies (Various years). The above findings appear to validate the concerns of proponents of strategic ambiguity, but a recent study with panel data collected on the island may alleviate such a concern (Wang & Cheng, 2023). Contrary to our expectations, Taiwanese citizens’ confidence in Washington’s security commitment has not increased but, in fact, decreased after Biden’s security pledges. The decline in confidence was mainly due to the pro-independence respondents’ shifting views. As noted, supporters of Taiwan independence historically have a higher level of confidence in America’s security commitment, which is cognitively consistent with their determination of pursuing the island country’s permanent separation from China. The war in Ukraine may be an awakening call for them as it demonstrates the Western hesitancy to undertake direct military intervention in overseas conflicts. The United States can have similar avoidance in a situation involving Taiwan. Despite Biden’s verbal assurance, actions speak louder than words. Pro-independence citizens’ shifting attitudes thus explain the declining confidence in Washington’s security commitment, which can also soften their calls for aggressive actions towards independence. Because panel analysis has long been considered one of the best ways of examining persistence and change of individuals’ attitudes, the results of the study are worth noting. Another identified pitfall of strategic clarity is that it signals what one ‘is prepared to take a risk for’ and ‘what one would ignore’ (Chang-Liao & Fang, 2021, p. 51). Given the heavy costs and uncertain outcomes, Chinese leaders are likely to avoid launching direct military attacks on Taiwan. Instead, they have employed and may continue to employ such ‘grey zone’ tactics as imposing economic sanctions on Taiwanese products, attacking the island’s information technology infrastructure, violating the island’s ADIZ and conducting military exercises for a de facto blockade. Without embarking on a conventional invasion of Taiwan that a policy of clarity intends to deter, these ‘low-intensity’ tactics can nonetheless have the effect of exhausting Taipei’s resources and eroding its resolve. Rather than discouraging Beijing’s aggressive and threatening behaviours, strategic clarity could undercut the effect of Washington’s deterrence policy. Such a criticism is also a legitimate concern, but it ignores the fact that Beijing embarked on grey zone approaches against Taiwan long before recent calls for clarity. This means that without setting a clear threshold for intervention has not stopped Chinese leaders from taking low-intensity provocations. China’s increasing clout and the perceived decline of America’s relative power seem to be the underlying factors to Beijing’s aggressive behaviour. Chinese leaders are apparently counting on Washington being ‘reactive and risk-averse’ (Sussex & Moloney, 2021). It will be incumbent on the United States to show its determination to confront China with coordinated responses. America’s policy of strategic ambiguity, therefore, remains crucial for cross-strait peace and stability, but it needs to be recalibrated. As China increasingly turns out to be a revisionist power, it is necessary for Washington to adjust its ambiguous posture in order to counter Beijing’s increasingly belligerent behaviour. The recalibration does not have to be a binary choice between ambiguity and clarity. Both policies can be treated as two ends of a continuum and can be adjusted accordingly. Given Beijing’s intense pressure campaign, Washington can step up its commitment to help Taiwan to defend itself for protecting democracy and America’s national interests. These measures include the development of a ‘porcupine’ defence strategy by enhancing Taipei’s asymmetric warfare capability, building military stockpile and forming an effective civil defence. Washington can also expand Taiwan’s integration with the international community lest Beijing employ its grey zone tactics to further isolate Taipei and deepen the island’s economic vulnerability. Ultimately, a successful deterrence policy will also depend on Washington’s convincing assurance that it would not support Taiwan’s pursuit of independence. Chinese leaders have a deep suspicion that the United States has a covert attempt to undermine China’s unification with Taiwan. America’s recalibration of its policy of strategic ambiguity is likely to be interpreted as a confirmation of their suspicion. If Beijing leaders believe that America’s policy will lead to Taiwan’s permanent separation from China, they are unlikely to submit to Washington’s demands. Trump 2.0 Donald Trump’s 2025 return to the White House for a second term as the president of the United States has added uncertainty to the policy of strategic ambiguity. Observers have noted that Trump is sceptical of the value of friends and allies as well as the benefits of international partnerships and alliances (Bush & Haas, 2024). Under the slogan of ‘America First’, he removed the United States from the Trans-Pacific Partnership (Lobosco, 2018), the Paris Climate Accord (White House, 2017, 2025a), the Intermediate-Range Nuclear Forces (INF) Treaty (Pompeo, 2019) and the UN Human Rights Council (White House, 2025b) and has mandated a comprehensive review of all international organisations to determine if the United States should withdraw its membership from or end its support for these organisations (White House, 2025b). He repeatedly admonished members of NATO, South Korea and Japan for not paying enough for United States protection (Reuters, 2024). His contempt for alliances and security partnerships has upended decades of American international engagement. In this context, two developments have direct implications for Taiwan. First, Trump has expressively suggested that the United States acquire Greenland (Erlanger & Smialek, 2025), take control of the Panama Canal (New York Times, 2025), and annex Canada as the 51st state of the United States (Colvin, 2025). His ambition for territory expansion has alarmed the world community3 and undermines an international principle that borders should not be changed through force or coercion. Trump’s threat regarding Greenland, the Panama Canal and Canada could potentially embolden Chinese leaders to consider taking Taiwan by force (Sacks, 2025). Second, unlike Biden’s emphasis on the defence of democratic values in his support for American allies, Trump has taken a transactional approach to international affairs. His dealing with the Russo–Ukrainian conflict is a case in point. The Trump administration has placed heavy pressure on the Ukrainian government to sign over a huge portion of its mineral wealth to the United States in exchange for helping the country to defend itself (Taub, 2025). Some speculate that Trump’s alignment with Russia represents a strategy of ‘reverse Kissinger’ aiming to counter China’s rise (Editorial Board, 2025). Though such a strategy may potentially benefit Taiwan, many on the island are nevertheless alarmed by the Trump administration’s approach to the conflict, questioning if they can continue to count on American support (Buckley & Chien, 2025). Because Trump has expressed his desire to negotiate a broad economic deal with Beijing (Swanson, 2025), the Chinese government may offer concessions on a trade deal in exchange for Washington’s positions on Taiwan without Taipei’s involvement. Indeed, Trump has expressed scepticism about Taiwan’s value compared to China (Llorente, 2024). He previously also questioned America’s ability to defend the island country (Bolton, 2020). Even though the State Department recently removed the long-standing phrase that ‘[w]e do not support Taiwan independence’ from its Taiwan factsheet (US Department of State, 2021), leading some to speculate if it represents a strategic shift (Tao, 2025), Trump’s dubious attitude about the island country was fully displayed in a previous interview. Speaking in a transactional tone, Trump argued that ‘Taiwan should pay us for defence’ because ‘we’re no different than an insurance company. Taiwan doesn’t give us anything’. He also complained that Taiwan had taken ‘almost 100%’ of the chip industry from the United States (Kharpal, 2024). In response to Trump’s inimical demands, by displaying Taiwan’s tangible value to the United States, the Taipei government has pledged to increase its defence spending to 3% of Taiwan’s gross domestic product (Office of the President, Republic of China [Taiwan], 2025). The Taiwan Semiconductor Manufacturing Company (TSMC)—the world’s largest chip manufacturer that produces the most advanced semiconductors—also announced plans to invest an additional $100 billion to expand its operations in the United States (Tang & Price, 2025).4 While the investment announcement was viewed favourably by Trump (Chung & Lee, 2025), it may be interpreted by Chinese leaders as a lack of resolve on the part of his administration due to Trump’s scepticism and versatile mindset. Given that credible threat is key to deterrence policy, the future and effectiveness of strategic ambiguity in Trump’s second term will be uncertain.ConclusionThe Taiwan Strait has been described as ‘the most dangerous place on Earth’ (Economist, 2021). A military conflict between China and Taiwan will have significant consequences. In addition to causing damage and human suffering on both sides, such a conflict could escalate into a direct confrontation involving two nuclear powers, threaten regional stability in East Asia, and undermine the prosperity of one of the most dynamic regions in the global economy. Washington’s policy of strategic ambiguity has been effective in maintaining cross-strait peace and stability for several decades, but a recalibration is necessary due to an increasingly powerful and assertive China. Instead of changing to a policy of strategic clarity, the United States can adjust its ambiguous posture through strengthening Taiwan’s defence capabilities and advancing its international integration. By assuring that Washington seeks regional peace and stability, not Taiwan’s independence, the effects of the deterrence policy can be maintained, and risks of cross-strait military conflicts can be minimised. Trump’s return to the White House nevertheless has disrupted America’s traditional foreign policy of promoting freedom and democracy. Although he has not clarified the administration’s position on America’s support for Taiwan, his transactional approach suggests that he might use the cross-strait relationship as leverage over Beijing. Washington’s policy towards Taiwan is expected to be less predictable, potentially leading to a volatile Taiwan Strait during Trump’s second term. Declaration of Conflicting Interests The author declared no potential conflicts of interest with respect to the research, authorship and/or publication of this article.FundingThe author received no financial support for the research, authorship and/or publication of this article.Footnotes1. Biden previously provided such an assurance in May of 2022 (Kanno-Youngs & Baker, 2022), October of 2021 (Hunnicutt, 2021) and August of 2021 (ABC News, 2021). 2. The attempts to explore the conditionality of Taiwanese residents’ policy preferences include Hsieh and Niou (2005), Niou (2004) and Wu (1993, 1996). 3. There have been strong public reactions in Canada to Trump’s threats to make Canada the 51st state of the United States. 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한국어로 읽기 Leer en español In Deutsch lesen Gap اقرأ بالعربية Lire en français Читать на русском The plan for an advanced missile defence shield over the US offers no guarantee of success and risks undermining global security. Last week, US President Donald Trump unveiled his $175 billion plan to build the ‘Golden Dome’: a coast-to-coast missile defence shield designed to protect the US against hypersonic, ballistic, and space-based weapons. But far from enhancing US national security, the initiative risks exacerbating global instability and accelerating strategic competition. The concept for the Golden Dome is ambitious. The proposal envisions a multi-layered defence architecture involving hundreds or even thousands of satellites in orbit, equipped with advanced sensors and interceptors, including space-based lasers. These would detect, track, and neutralize incoming missiles and other threats at various stages of flight. In both vision and rhetoric, the plans echo Ronald Reagan’s 1983 Strategic Defence Initiative, often referred to as ‘Star Wars.’ Like the Golden Dome, the SDI proposed a layered defence system that would rely on cutting-edge, and largely untested, technologies to intercept incoming missiles before they could reach US territory. But despite years of investment, the SDI never produced a workable system and was eventually cancelled, exposing the gap between ambition and capability that still exists today. The plan also draws inspiration from Israel’s Iron Dome system. But this comparison is misleading. Israel is much smaller than the US, and its Iron Dome protects the country from short-range, unguided rockets – threats that are limited in number, speed, and direction. Trump’s plan, by contrast, seeks to defend the entire US homeland from far more advanced and numerous threats, including long-range ballistic missiles, hypersonic glide vehicles and orbital delivery systems. The scale, complexity, and technical sophistication required are of a completely different order. Costs – and risks Despite Trump estimating that the system will cost $175 billion and could be built in just three years, the Congressional Budget Office has warned that the space-based components alone could cost as much as $542 billion to deploy and operate over the next 20 years. Fundamental questions remain unanswered: what the system will look like, who will build it, and whether it will function as intended. Investing the necessary resources to develop such an advanced system would require significant trade-offs that could come at the expense of other defence priorities.  The US does not currently have the full spectrum of technology it needs to intercept hypersonic or ballistic missiles in space, which would require interceptors or lasers capable of operating over vast distances with near-instant precision. Pursuing the Golden Dome risks prioritising an expensive and unproven system over more immediate and achievable capabilities, such as improving regional missile defences and cyber resilience to countering emerging threats like drones. The plan also has potentially dangerous strategic consequences. A system that aspires to make the US invulnerable to missile attack would almost certainly be seen by its adversaries as an attempt to undermine the logic of nuclear deterrence. If Washington is perceived to be developing a shield that could one day neutralize a retaliatory nuclear strike, it risks triggering a dangerous global arms race. Beijing and Moscow have already criticized the Golden Dome project as ‘deeply destabilizing’ and could respond with a range of countermeasures, including expanding their offensive arsenals or developing new delivery systems. This arms race could also incentivize the deployment of space-based weapons at a time when space remains dangerously under-regulated. The Golden Dome could therefore undermine global security, making the world a more dangerous place – including for the US. Leverage for diplomacy? Given these risks, the US should instead use the Golden Dome plan as leverage to launch renewed arms control diplomacy. Washington should use the proposal to reinitiate dialogue with other major powers, including Russia and China, on mutual restraint, transparency, and the governance of emerging missile and space-based technologies.  This is especially urgent given the deterioration of existing arms control frameworks. The last major arms control agreement between the US and Russia, the New START Treaty, was suspended by President Vladimir Putin in 2023. It is set to expire in 2026 with no successor in place. Despite China’s growing arsenal, arms control talks between the US and China were also suspended in July 2024 over US arms sales to Taiwan. Meanwhile, rapid advances in missile technology, space systems, and artificial intelligence are outpacing the rules and norms designed to manage them. As geopolitical tensions rise, so does the risk of miscalculation and escalation. The need to revive strategic dialogue is therefore more pressing than ever. While China and Russia may be sceptical of US intentions, the Golden Dome’s space-based elements could create a rare opportunity for renewed arms control dialogue on space security. This might not necessarily focus on warhead reductions, but on more immediate and achievable areas of shared concern.  Space security Space security is one of the most promising and necessary avenues for engagement. As nuclear-armed powers become increasingly reliant on space-based systems for both military and civilian purposes (from early warning systems and communications to navigation and surveillance), the risks of miscalculation or unintended escalation in orbit are growing. A pragmatic and urgently needed step would be to launch dialogue on the norms that should govern behaviour in space, including avoiding close approaches to satellites, limiting the deployment of certain space-based systems, or improving transparency. Even modest measures, such as agreeing to share notifications of satellite launches or discussing dual-use capabilities, could help to build trust and reduce the likelihood of conflict in orbit. By focusing on space, where interests overlap and mutual vulnerabilities are clear, the US could help to re-establish the foundations for wider future strategic dialogue.  Avoiding past mistakes In the 1980s, Reagan’s SDI consumed vast resources, heightened international tensions, and failed to deliver a functioning defence system. It also contributed to an arms race that left the world more divided, not more secure. The Golden Dome risks repeating those same mistakes, but with more players, faster technologies, and fewer guardrails in place. At a time when arms control frameworks are crumbling and global tensions are rising, the announcement of the Golden Dome should be seen as a strategic opportunity to initiate renewed discussions on space security. Framing the proposal as a starting point for dialogue, rather than a signal of unilateral ambition, could help to stabilize a dangerously volatile moment. Otherwise, the project risks pushing the world one step further towards a more contested, militarized, and insecure future.

한국어로 읽기 Leer en español In Deutsch lesen Gap اقرأ بالعربية Lire en français Читать на русском Introduction On 24 February 2022, Russia launched a full-scale invasion of Ukraine, following the military actions that began with the annexation of Crimea in 2014. The conflict is having devastating consequences, including widespread death and displacement, destruction of infrastructure, and a global energy crisis, also heightening geopolitical tensions (Kurapov et al., Citation2023). Pertiwi (Citation2024) contended that since the crisis in Eastern Ukraine and Russia’s annexation of Crimea in 2014, the European Union (EU) has adopted sanctions as the key policy response targeting Russia’s aggressive behaviour. These restrictive measures were applied by the EU in multiple rounds and packages and gradually became the cornerstone of the EU’s policy towards Russia. (p. 61) There is extant literature studying the direct consequences of the war, such as humanitarian crises, economic impacts and geopolitical instability. Numerous countries have experienced food shortages and rising prices due to disruptions in supply chains, worsened by the crisis in Ukraine and the closure of airspace (Hellegers, Citation2022). Concurrently, the war has caused an unprecedentedly volatile energy market, as many European countries were obliged to seek alternative energy sources to Russian imports, demanding more oil and natural gas from alternative suppliers (Liadze et al., Citation2022). The invasion has also fuelled inflation across the EU, not only affecting energy, which is essential in all the sectors of the economy but also other sectors like food, for example, as Ukraine is a major global grain producer (Ozili, Citation2024). The added value and main contribution of this paper is based on the use of grounded social scientific methods like the Fuzzy Hybrid TOPSIS and the Ordered Probit, to analyse the EU citizens’ support of the sanctions against Russia, providing more nuanced insights on what factors are the most important to be in favour and against the sanctions. Thus, in particular, our study contributes to filling one of the important gaps mentioned by Pertiwi (Citation2024) in the analysis of the literature on the EU’s approach to sanctions on Russia. Concretely, our study fills in part the fifth gap in the analysis of causal mechanisms that examine the sanctions, including relevant actors like the EU citizens. Thus, we first provide an in-depth analysis of European citizens’ views on EU sanctions to weaken Russia and support Ukraine. And then, we analyse the main factors that affect the EU citizens’ support of the sanctions taken by the EU against Russia and in favour of Ukraine. The study includes data from 26,461 respondents across the 27 EU Member States, collected through the 98th Eurobarometer survey (Winter 2022–2023), which examined the EU’s response to the war in Ukraine. The paper is organised as follows: Section 2 provides a brief overview of the literature review. Section 3 presents the dataset used, and the methodological approach. In Section 5, the results are presented, followed by Section 5, which offers a thorough discussion of the findings. Finally, Section 6 concludes the paper by summarising the main conclusions drawn from the study, identifying implications, limitations of the study, and potential directions for future research. Literature reviewAttitudes towards EU’s sanctions against Russia war in Ukraine Public sentiment for the EU is a complex phenomenon to study and needs to be approached from different angles, including identity, governance, security and the economy. How the public perceives the EU as a guardian of democratic values and good governance directly influences support for its policies, including sanctions on Russia. Boomgaarden et al. (Citation2011) argue that if the people believe that the EU is going to safeguard democratic principles, then they will identify sanctions as a proper means of safeguarding such principles. However, if there is a lack of trust in the EU to defend such values, there will be little support for such sanctions. The purpose of European identity is primarily to determine people’s views on the EU’s actions. Kende et al. (Citation2018) believe that European identity can have a profound impact on solidarity with common EU policies, such as sanctions. This would imply that the framing of a common European identity can become the most important factor in eliciting public consent for EU programmes, especially in the midst of geopolitical crises. Thus, public opinion on sanctions is also based on perceptions of the EU’s ability to act in the interests of citizens. According to McLean and Roblyer (Citation2016), if citizens perceive the EU as doing the best it can for its citizens, particularly in terms of economic stability and governance, they are more likely to support sanctions against Russia. However, if the EU is perceived as wasteful, or its policies are perceived as economically harmful, then the potential for support for sanctions will be low. This explains the need to ensure that EU action is consistent with shared perceptions of political effectiveness and economic benefit. The imposition of economic sanctions is one of the highest prioritised tools in the modern world, especially against threats to stability and security. The EU sanctions on Russia, especially after the annexation of Crimea and the invasion of Ukraine, have stimulated an immensely wide public discussion (Karlović et al., Citation2021). An important question is: What is the role of perceived security threats in shaping public opinion about these sanctions? It has been made known through investigation that subjective security risk strongly predicts public opinion regarding EU sanctions against Russia. Frye (Citation2019) argues that sanctions are not always supported but vary depending on how people view security threats. Public support is higher when sanctions are framed as protection against an external threat. When sanctions are perceived as a threat to national or economic security, they can generate opposition. The EU’s collective response to the Russia–Ukraine conflict also shows that public opinion on sanctions is shaped by both security interests and normative expectations of justice and self-determination (Bosse, Citation2024). This mutual influence can lead to mixed public responses, with some seeing sanctions as an ethical necessity, while others withdraw their support due to perceived economic and national security risks. The way EU sanctions are proposed and implemented also influences public opinion. According to Sjursen (Citation2015), citizens will be more supportive of sanctions if they see EU institutions as representative and transparent. Conversely, an image of bureaucratic distance or lack of public participation in decision-making can undermine trust and lead to opposition. Thus, in line with this background, we pose our first research question as follows: (1) How do European values and security threats influence the intensity of public support for EU sanctions against Russia?Socioeconomic factors in shaping attitudes towards EU sanctions Support for economic sanctions against Russia is widespread among the EU, varying according to socioeconomic status, demographic characteristics and political engagement. As Frye (Citation2017) has noted, economic prosperity is a key predictor of support for sanctions. Those who are financially ‘safe’ are more likely to support EU-imposed sanctions, as they are less directly affected by the economic burden. Previous studies have shown that those in more affluent income groups or with stable household finances are more likely to support foreign policy actions, such as sanctions, that represent broader European values, even if they are economically costly (Alexandrescu, Citation2024). This is consistent with the findings of Lepeu (Citation2025), which recognises that citizens who rate their own economic situation as ‘very good’ are far more likely to support sanctions than those facing financial hardship. On the other hand, citizens facing economic hardship are less likely to be sanction-supportive if they believe that sanctions will negatively impact inflation, increase unemployment or suppress national economic stability. Onderco (Citation2017) found that economic hardship is associated with higher scepticism towards foreign policy decisions that lack tangible personal benefits. This means that the economic price of sanctions is likely to disproportionately affect support among lower-income individuals. Generational differences also play a role in shaping public opinion on sanctions. Older individuals (over 55 years) are more supportive of EU sanctions, as they have a historical perspective on European security and are more politically engaged (Alexandrescu, Citation2024). On the other hand, younger people (15–34 years) have weaker support, possibly because they have different priorities, such as financial stability and employment, which could be considered more pressing than geopolitical concerns (Onderco, Citation2017). Alexandrescu (Citation2024) also suggests a new generational divide in attitudes towards coercive diplomacy, suggesting that efforts to build popular support for sanctions must consider young Europeans’ concerns and values about economic consequences and political transparency. Political interest is a second important predictor of support for EU sanctions. Politically knowledgeable and engaged citizens tend to be more supportive of EU foreign policy decisions, including sanctions (Alexandrescu, Citation2024). Thus, there is political ideology duality: left and centre-left voters support sanctions if they are anchored in a broader vision of upholding international law and human rights, while centre-right and populist voters are likely to be more sceptical if sanctions are perceived as infringing on national sovereignty (Onderco, Citation2017). As in the literature, the likelihood of being a strong supporter of EU sanctions depends on several socioeconomic and demographic factors, our second research question builds on the following: (2) Do socioeconomic characteristics influence the likelihood of being a strong supporter of EU sanctions against Russia?Dataset and methodology The dataset of the study is based on the Standard Eurobarometer 98.2 (EB98) survey Winter 2022–2023 which was conducted from 12 January to 6 February 2023 in 39 countries or territories. In the study, we only use the dataset from the 27 Member States of the EU, without considering the data from the other twelve additional countries included. The dataset was collected about a year after the start of the Russian invasion of Ukraine, covering the following five topic areas identified by the European Commission (Citation2024): (1) The EU’s response to the invasion of Ukraine; (2) the actions taken as a unified EU response to the invasion; (3) the consequences of the war in Ukraine; (4) the European security threat; and (5) the future EU actions in the wake of the war., and aims to analyse the solidarity of European citizens with the Ukrainian people. The sample size for each country was around 1000 respondents except for Malta with 503, making a total of 26,461 respondents. The endogenous variable of the study is obtained by applying the Fuzzy Hybrid TOPSIS approach to the items of the survey included to measure the degree of support of the respondents towards the measures taken by the EU in response to the Russian invasion of Ukraine. The following five items were included in the analysis: (1) financing the purchase and supply of military equipment to Ukraine; (2) imposing economic sanctions on the Russian government, companies and individuals; (3) providing financial support to Ukraine; (4) providing humanitarian support to the people affected by the war; and (5) welcoming into the EU people fleeing the war. The question introduction was the same for all the items: The EU has taken a series of actions as a response to Russia’s invasion of Ukraine. To what extent do you agree or disagree with each of these actions taken? The responses to the question for each item were given using a complete 5-point Likert scale, where: 1 = totally agree; 2 = tend to agree; 3 = do not know; 4 = tend to disagree; and 5 = totally disagree. The scale was reversed to enhance interpretability, ensuring that higher values are aligned with those citizens who expressed higher support for the measures taken by the EU. The analysis of the variables affecting the citizens’ support was based on the selection of 14 exogenous variables, including age, gender, political interest, perception of the situation in the country, employment personal perception, financial household perception, the labour market perception of the country, the provision of public services perception, the overall image of the EU, the perception of the threat posed by the Russian war in Ukraine to security in the EU and the country itself, the personal perception that standing against the Russian invasion of Ukraine, the EU is defending European values, and the political orientation. More information about the exogenous variables can be found in Table A1 in the appendix. The Ordered Probit model will provide interesting and nuanced results of whether some exogenous variables affect the support of the EU sanctions taken by the EU in response to the Russian invasion. For example, for each of the variables included in the analysis, it will be possible to analyse to what extent some of the categories support more or less the sanctions. Similarly, it will be possible to determine if some of the variables have a significant effect on the level of support. Methodology Opinion surveys are affected by the subjective judgments of respondents, leading to potential inaccuracy in interpreting response categories (Disegna et al., Citation2018). For instance, ‘totally agree’ for one respondent could be equivalent to simply ‘tend to agree’ for another. For this reason, Fuzzy Set Logic methods are becoming very popular in social sciences to manage the uncertainty associated with survey responses effectively (Cantillo et al., Citation2021; Indelicato & Martín, Citation2024). The study uses the Fuzzy Hybrid TOPSIS Approach to calculate the endogenous variable that measures the support (sup) of the respondents towards the sanctions taken by the EU against Russia. The method is grounded in the fuzzy set theory proposed by Zadeh (Citation1965), which was introduced for handling the inherent uncertainty and vagueness of information provided by answers to social surveys (Carlsson & Fullér, Citation2001; Disegna et al., Citation2018; Mamdani & Assilian, Citation1999). There are multiple fuzzy set representations that can be used to associate the categories of the answers given in the survey (Nguyen et al., Citation2005). In the study, we use the Triangular Fuzzy Numbers (TFNs), which are the most used fuzzy sets (Anand & Bharatraj, Citation2017; Wang, Citation2017). The final representation of the answers from the dataset is as follows: (1) totally disagree is represented by (0, 0, 30); (2) tend to disagree by (20, 30, 40); (3) do not know by (30, 50, 70); (4) tend to agree by (60, 70, 80); and (5) totally agree by (70, 100, 100). The hybrid nature of the method is based on the application of the Technique for Order of Preference by Similarity to Ideal Solution (TOPSIS), which calculates the synthetic indicator (Hwang & Yoon, Citation1981). We omit the mathematical formulation of the method for simplicity and ease of exposition. Interested readers can consult many existing papers, such as (Cantillo et al., Citation2023; Indelicato et al., Citation2023; Martín et al., Citation2020; Martín & Indelicato, Citation2023). We will use sup which provides relative support for the sanctions on Russia taken by the EU after invading Ukraine, as the dependent variable for the econometric model. The variable will be categorised into five quintiles according to the ranking of the indicator in order to use an ordered probit model. The marginal effects of the results will be used to analyse the main determinants that explain the highest support of EU citizens. In the study, we use the Daly normalisation for all the categories that act as exogenous variables in the model. Thus, it is possible to determine the marginal effects of each category with respect to the sample-weighted average. We omit the discussion of the technicalities of the model and exogenous variables normalisation. Interested readers can consult Daly et al. (Citation2016), Greene and Hensher (Citation2010), Hensher et al. (Citation2015) and Martin and Roman (Citation2021). Results Figure 1 shows the kernel density of the exogenous variable that measures the support of EU individuals for the sanctions against Russia taken by the EU for the whole sample (panel a) and for those who totally agree and totally disagree with the EU imposing the sanctions to defend European values (panel b). The results indicate that a small number of respondents do not support the sanctions imposed by the EU at all, with 170 citizens giving a score of 1 to all survey items included in the scale. Conversely, a significant portion of the population holds a more neutral position, as shown by responses falling in the range of 0.3–0.6. Additionally, a substantial number of citizens – specifically, 6430 – express their strong support for the sanctions by responding with a score of 5 to all items.  Figure 1. Support kernel density. Panel (b) of the figure clearly distinguishes between the two categories of respondents. It shows that those who strongly support the defence of European values are more in favour of the sanctions compared to those who strongly oppose them. Similar figure patterns are obtained for the categories of those who have a positive or negative image of the EU, and for those who think that the Russian invasion of Ukraine is seen as an important threat to the security of the EU. Nevertheless, this will be further discussed with the results of the ordered probit model. Table 1 shows the main drivers to support or not the sanctions taken by the EU against Russia. The table is obtained from the marginal effects obtained from the ordered probit model, which is in the fifth quintile of the support distribution, and refers to the citizen group of the strong supporters (Table A3, in the appendix). It can be seen that the main drivers to support the sanctions are totally agreeing that by standing against the Russian invasion, the EU is defending European values, having a very good or rather good image of the EU, totally agreeing that the EU security is under threat with the Russian invasion, and to have a very good financial situation in the household. All the coefficients are significant at 999 per thousand. The results of the ordered probit model, as well as the complete table of the marginal effects, can be consulted in the appendix. Table A2 shows that all the exogenous variables affect the support level except the area in which the respondent resides, so the support is transversal to whether the European lives in a rural, middle town or large town. It is also interesting to observe that all the threshold parameters of the ordered probit model result significant, i.e. the five different quintiles of the distribution can be allocated without the need to collapse some of the categories used in the estimation.  Table 1. Main drivers to be or not a strong supporter of the EU sanctions. Interestingly, the main drivers to be in the population segment of those who do not strongly support the EU sanctions are the opposite categories of supporting the sanctions: totally disagreeing or tending to disagree with the defence of European values, totally disagreeing or tending to disagree with the fact that the invasion of Ukraine is a security threat to the EU and having a very bad image of the EU. The coefficients of Table 1 have been extracted from Table A3, and need to be interpreted as follows: the coefficients are the marginal effects of the category to be or not a strong supporter of the EU sanctions. For example, the coefficient of 0.105 for individuals who totally agree that the EU is defending European values by standing against the Russian invasion of Ukraine indicates that this group has a 10.5 per cent higher likelihood of being strong supporters of EU sanctions compared to the average citizen in the overall sample. In a similar manner, the coefficient of −0.225 for the category of total disagreement indicates a 22.5 per cent lower probability of being a strong supporter. Other interesting results that can be seen in the complete marginal effects table (Table A3, in the appendix) are that the type of urbanisation where the respondent lives, namely rural village, small and mid-size town or large town, is the only variable of the twelve under analysis which does not have any significant effect on being a strong supporter of the sanctions. For the rest of the variables, there is always a category with more odds of being or not in the category of strong supporters. It is interesting to note that the younger generations (between 15 and 24 and between 25 and 34) are less likely to be in the category of strong supporters than those over 55, who are significantly more likely to be in this category. Similarly, those who have a strong political interest, have a good personal job situation, think that the economic situation of their country is rather good, are leftist or left-centre, think that the employment situation of the country is rather good, are males, or have a rather good financial situation have a higher probability of being in the category of strong supporters. Conclusions In a recent speech by Jens Stoltenberg, former Secretary General of NATO, the following assessment was made: In just a few weeks, NATO leaders will meet in Madrid. We will make important decisions. To continue to strengthen and adapt our Alliance to a new security reality and protect our people and our values. I look forward to the day when we can welcome both Finland and Sweden into our Alliance. This will make Finland and Sweden safer. NATO stronger. And the whole Euro-Atlantic area more secure. (NATO, Citation2022) Although NATO’s strategic decision affects the entire geopolitical landscape, public perceptions of EU sanctions need to be addressed through a more nuanced, evidence-based approach. Public opinion on sanctions is driven not only by security concerns but also by economic and political factors that underpin individual belief systems. To measure the determinants of support for such policies, this study applies both the fuzzy hybrid approach and the ordered probit model. The first method calculates the endogenous variable that measures the level of support of each respondent. The second method is used to find the main factors of a set of 14 exogenous variables or covariates that affect the support. Our results reveal that there are four important drivers to be a strong supporter of the sanctions taken by the EU against Russia after the invasion of Ukraine in early 2022: (1) totally agreeing that by standing against the Russian invasion of Ukraine, the EU is defending European values, (2) having a very good overall EU image, (3) totally agreeing that Russia’s invasion of Ukraine is a threat to the security of the EU, and (4) having a very good household financial situation. Other factors, such as age, gender, or political orientation, among others, are less determinant in explaining the strong support category. The dataset for the study was obtained from the 98th Eurobarometer, covering winter 2022–2023, providing a solid foundation for the objectives pursued in the study. Our results imply that, at least in the salient category of being a strong supporter of the EU sanctions, European Parliamentarians and the political parties involved should promote a triad: the defence of European values (Anghel & Jones, Citation2023), a more integrated security defence system that will permit the EU to be more independent from NATO and US (Del Sarto Citation2016; Howorth Citation2018), and a solid campaign of improving the EU image, highlighting the benefits of being in the union (Elmatzoglou, Citation2020). The European values of human rights and dignity, as well as the principles of living in liberal democracies, should not be undermined by misinformation campaigns from autocratic regimes. The invasion of Ukraine constitutes the biggest security threat in Europe since the end of the Cold War, fostering a wave of fear and real politics about the necessity of increasing the military budget. Europeans have seen more closely how the lives of human beings are worth almost nothing when their homes are bombed, and they have to leave with just the bare minimum, stopping their daily lives and becoming refugees in countries that may not welcome them with open arms. There is a need for effective communication campaigns that change the focus from generic issues such as ‘Europeanness’ fostering a common national identity or sense of belonging to a pragmatic branding strategy that achieves a power actor in the new turbulent geopolitical battlefield. Recent developments, in the light of newly elected President Donald Trump’s views on NATO and US foreign aid, have added uncertainty to the EU’s strategic calculus on sanctions. Trump’s concerns about NATO’s burden-sharing and his ambivalent stance on continued US military aid to Ukraine have set off alarm bells among EU policymakers and underscored the need for a European security policy that is less dependent on US leadership (Sorgi, Citation2025). Thus, it is the time for a more than-less European Union mentality that decreases Euroscepticism, a time to strengthen public support for the EU. This shift requires an emphasis on the tangible benefits that EU membership brings to member states, including economic stability, enhanced security, and the promotion of shared values like democracy and human rights. By fostering greater awareness and understanding of the EU’s role in addressing cross-border challenges, citizens can better appreciate the advantages of unity over division. Engaging with local communities, encouraging open dialogues, and actively involving citizens in EU decision-making processes can further bridge the gap between the EU and its citizens, reinforcing a sense of belonging and shared purpose. This study has some limitations that can be addressed in future studies. First, the dataset is a point-in-time measure of public opinion, surveyed in the winter of 2022–2023. Due to the dynamic nature of the geopolitical environment, longitudinal studies are needed to examine how public support for EU sanctions may change over time in response to political, economic and military events. Second, other external factors can also be examined to gain a better picture of how other factors could shape people’s opinions. These range from cultural equivalence with Ukraine to geographical proximity to the war zone, exposure to social media narratives, and interaction with Ukrainian refugees. The role of media frames and disinformation campaigns in determining views on EU sanctions is another area that would require more work. Third, latent variables such as societal resilience, institutional trust, geopolitical affinity, and adherence to European values could provide a better understanding of the reasons for support or opposition to EU sanctions. Such variables could also explain the differences in public opinion between EU member states and between different demographic groups. Furthermore, as previous studies on public support (Onderco et al., Citation2023) have also shown, a comparative analysis with previous surveys, for example, in 2008 (Russia-Georgia war), 2014 (annexation of Crimea and Donbas war) with the full invasion of Ukraine in 2022–2023, could also be very useful. Although not directly compared in the current study, future research would benefit from a historical analysis component to explore the continuities and shifts in public opinion during these major geopolitical events and how they change in different EU countries. This would provide a better insight into how threat perceptions, economic concerns and EU identity evolve in response to Russian aggression and EU foreign policy initiatives. Supplemental Material Supplemental data for this article can be accessed online at https://doi.org/10.1080/23745118.2025.2476484. Additional informationFunding Dr Alessandro Indelicato research is funded by the research fellowship “Catalina Ruiz,” provided by the Consejo de Economía, Conocimiento y Empleo of the Gobierno de Canarias, the Agencia Canaria De Investigación Innovación Y Sociedad De La Información (ACIISI), and Fondo Social Europeo of the EU, through the Universidad de Las Palmas de Gran Canaria (Spain). Martín, J. C., & Indelicato, A. (2025). 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I. Introduction Since October 7, 2023, when the Hamas attacked Israel, the Gaza war has entered its third year. Palestinians continue to endure an unprecedented level of violence, trauma, economic hardship, and uncertainty. The war has resulted in a staggering number of casualties and widespread displacement, in addition to massive destruction of physical assets in Gaza, significant reduction of economic output, increased violence in the West Bank, and widespread collapse of basic service provision across the entire Palestinian territories.  As of May 7, 2025, according to Wikipedia and Gaza’s Ministry of Health, 55000 fatalities (53,253 Palestinians and 1,706 Israelis) and more than 110,00 injuries have been reported in Gaza. More than half of the casualties are women, children, and the elderly. An estimated 1.9 million people, approximately 90 percent of Gaza’s population, are currently internally displaced. Seventy percent of Gaza’s Road network, more than 80 per cent of commercial facilities, and close to 90 percent of housing units in Gaza have either severely damaged or have been destroyed.  Since October 7, 2023, the UN has documented over 1,500 clashes between Israeli settlers and Palestinians in the West Bank, resulting in property damage, casualties, and displacement. Over 1,600 Palestinians, half of whom are children, have been displaced due to increased settlers’ violence and access restrictions. Additionally, existing fiscal constraints and growing security concerns have disrupted service provision in the West Bank.  On the macroeconomic front, the Gaza and West Bank face a collapse, which is unmatched in recent memory. The Palestine economy has faced significant contraction, evidenced by a reduced production, sharp decline in gross domestic product (GDP), and soaring unemployment rates. On the other hand, the Gaza war has had significant negative impacts on Israel. The economic and financial costs of war consist of the direct cost of military operations as well as the indirect losses that extend over the medium and long term. One of the most direct costs of the Gaza war was the recall of about 300,000 reservists in the early days, which meant that the Israeli government would bear the cost of conscription, and the Israeli economy would bear loss of output due to their absence from the workforce.Given these situations, this paper analyzes the economic effects of the Gaza war on Palestine and Israel. II. Literature on the Effects of Wars Wars have the potential to alter the parties and “transform the future” of belligerents (Ikle 1991) and they also bring about fundamental changes to the international system (Gilpin 1981).  Scholars in Economics have provided considerable analysis of the macroeconomic effects of a conflict across spatial levels: locally, nationally, regionally, and internationally. Some studies have examined the effects of specific wars such as the Syrian civil war (Kešeljević and Spruk, 2023) or the Iraq war (Bilmes and Stiglitz 2006). For example, an analysis estimated that the Russian invasion of Ukraine had an economic cost of 1% of global GDP in 2022 (Liadze et al. 2023) Others have examined the effects of war in general. For instance, Reuven Glick and Alan Taylor (2010) examine bilateral trade relations from 1870 to 1997 and find large and persistent negative impacts of wars on trade and hence on national and global economic welfare. Similarly, Vally Koubi (2005) investigates the effects of inter- and intrastate wars on a sample of countries and finds that the combined prewar, contemporaneous, and postwar effects on economic growth are negative.  A “war ruin” school emphasized that the destruction caused by wars is accompanied by higher inflation, unproductive resource spending on the military, and war debt (Chan 1985; Russett 1970). By contrast, a “war renewal” school argued that there can be longer-term positive economic effects from war because war can lead to increased efficiency in the economy by reducing the power of rent-seeking special interests, triggering technological innovation, and advancing human capital (Organski and Kugler 1980).  III. Economic Effects of the Gaza War1. Casualties  As Table 1 shows, since the Hamas attacked Israel on October 7, 2023, 55,000 people (as of May 7, 2025, 53,253 Palestinians and 1,706 Israelis) have been killed in the Gaza war according to the Gaza Health Ministry. Scholars have estimated that 80% of Palestinians killed are civilians. A study by OHCHR (The Office of the United Nations High Commissioner for Human Rights) found that 70% of the Palestinians killed in residential buildings or similar housing were children and women.  The majority of casualties have been found in the Gaza Strip. The Gaza Health Ministry’s total casualty count is the number of deaths directly caused by the war.  The 7 October attacks of the Hamas on Israel killed 1,195 people, including 815 civilians. A further 806 Palestinians have been killed in the occupied West Bank (including East Jerusalem).  2. Economic Effects of the Gaza War on Palestine  As Figure 1-1 shows, since October 7, 2023, Palestine’s economy has significantly contracted as a result of continued warfare. As Figure 1-2 shows, economic downturn started from the fourth quarter of 2023. In 2024, Palestine's GDP contracted by 27% compared to the previous year. The decline was driven by a 27% drop in industrial output in the Gaza Strip due to the ongoing Israeli occupation and attack. Especially, economic contractions were recorded in construction (-14.5%), services (-11.0%), financial and insurance activities (-5.3%), information and communication (-3.2%). However, Palestine’s economy began to recover in the fourth quarter of 2024, although it still marked a negative growth.   Figure 1-1: Palestine economic growth rate  Figure 1-2: Palestine economic growth (quarterly) As Figure 2 shows, industrial production in Palestine significantly decreased in 2024 as war has continued between Israel and Hamas. Industrial production in Palestine has been low, averaging -7.62 percent from 2012 until 2025. However, it reached a record low of -29.77 percent in June of 2024. Then industrial production in Palestine increased to 2.1 percent in March of 2025 over the same month in the previous year.   Figure 2: Industrial production in Palestine As Figure 3 shows, inflation rate in Palestine has significantly increased in 2023 and 2024, reaching all time high of 88.93 percent in November of 2024. High inflation resulted from resource shortages as a result of continued warfare and significant production decline. And then inflation rate in Palestine dropped to 1.88 percent in March and -2.51 percent in February of 2025. Inflation rate in Palestine averaged 4.95 percent from 1998 until 2025.   Figure 3: Inflation rate in Palestine As Figure 4-1 shows, unemployment rate in Palestine significantly increased after October 7, 2023, as economy continued to shrink and industrial production fell. Unemployment rate in Palestine increased to 35.20 percent in the first quarter of 2024 from 24.1 percent in the third quarter of 2023. It then dropped to 31.1 percent in the second quarter of 2024 and 28.8 percent in the fourth quarter of 2024. Unemployment Rate in Palestine has been remarkably high, averaging 24.07 percent from 1995 until 2024, reaching an all-time high of 35.60 percent in the third quarter of 2002 and a record low of 8.80 percent in the second quarter of 2000.    Figure 4-1: Unemployment rate in Palestine As Figure 4-2 shows, youth unemployment rate in Palestine increased from 38.40 percent in the first quarter of 2023 to 45.70 percent in the first quarter of 2024 and then slightly dropped to 42.60 percent in the third quarter of 2024 and 38.6 percent in the fourth quarter of 2024. Youth unemployment rate in Palestine has been remarkably high, averaging 41.85 percent from 2009 until 2024, reaching an all-time high of 49.90 percent in the second quarter of 2018 and a record low of 32.90 percent in the first quarter of 2011.   Figure 4-2: Youth unemployment rate in Palestine As Figure 4-3 shows, full-time employment in Palestine plunged to 628000 persons in the first quarter of 2024 from 1143800 persons in the third quarter of 2023. Then it increased to 705700 persons in the fourth quarter of 2024. Full-time employment in Palestine averaged 888133 persons from 2010 until 2024, reaching an all-time high of 1143800 persons in the third quarter of 2023 and a record low of 67900 persons in the first quarter of 2010.   Figure 4-3: Full-time employment in Palestine Despite the continued warfare in Gaza, as Figure 5 shows, exports in Palestine did not significantly decrease. On the contrary, exports in Palestine increased from 148.3 USD Million in August 2023 to 164.20 USD Million in December of 2024. Exports in Palestine averaged 68.15 USD Million from 2001 until 2025, reaching an all-time high of 164.20 USD Million in December of 2024 and a record low of 15.92 USD Million in April of 2002. Exports in Palestine maintained pre-war level in 2025, recording 140.70 USD Million in January of 2025. Top exports of Palestine in 2023 were scrap iron ($68.6M), tropical fruits ($53.8M), pure olive oil ($10.9M), and building stone ($7.56M).  Figure 5: Exports in Palestine Figure 6 shows, imports in Palestine significantly dropped in 2024 as warfare continued in Gaza. Imports in Palestine decreased to 420.30 USD Million in April 2024 from 747.20 USD Million in August 2023. Imports in Palestine averaged 370.00 USD Million from 2001 until 2025, reaching an all-time high of 750.60 USD Million in November of 2022 and a record low of 82.71 USD Million in April of 2002. According to media reports, there are severe food shortages in Gaza, but there is no information about the imports of food after 2023.   Figure 6: Imports in Palestine As Figure 7 shows, since October 7, 2023, government spending in Palestine has significantly declined in 2023 and early 2024, hitting a record low of 461.20 USD million in the first quarter of 2024. And then government spending in Palestine increased to 666.70 USD million in the fourth quarter of 2024 from 616.50 USD million in the third quarter of 2024. Government spending in Palestine averaged 797.95 USD million from 2011 until 2024, reaching an all-time high of 974.90 USD million in the fourth quarter of 2016 and a record low of 461.20 USD million in the first quarter of 2024.   Figure 7: Government spending in Palestine 3. Economic Effects of the Gaza War on Israel  As Figure 8 shows, since October 7, 2023, when the Hamas attacked Israel, government spending in Israel significantly increased as Israel government conducted massive military operations against the Hamas. Government spending in Israel increased from 84100 ILS (Israel new shekel) Million in the third quarter of 2023 to 97973 ILS Million in the fourth quarter of 2023 and 97018 ILS Million in the fourth quarter of 2024. Government Spending in Israel averaged 58676 ILS Million from 1995 until 2024, reaching an all-time high of 97973 ILS Million in the fourth quarter of 2023 and a record low of 39524 ILS Million in the third quarter of 1995.   Figure 8: Government spending in Israel As Figure 9 shows, as Israel government conducted massive military operations against the Hamas, military expenditure in Israel increased to 46505.30 USD Million in 2024 from 27498.50 USD Million in 2023. Military expenditure in Israel averaged 7742.87 USD Million from 1951 until 2024, reaching an all-time high of 46505.30 USD Million in 2024 and a record low of 57.60 USD Million in 1954.   Figure 9: Military expenditure in Israel As Figure 10 shows, Israel recorded a government budget deficit of -33793.00 ILS Million in December of 2023 from 14100 ILS Million in January 2023 because government spending, in particular military expenditure significantly increased. Government budget value in Israel averaged -3405.71 ILS Million from 2005 until 2025, reaching an all-time high of 22839.00 ILS Million in January of 2025 and a record low of -33793.00 ILS Million in December of 2023.   Figure 10: Budget Balance in Israel As Figure 11-1 & 11-2 show, Israel's economic growth plunged to -4.32 percent in the fourth quarter of 2023 from 3.44% in the third quarter of 2023. Israel experienced consecutive negative growth until the third quarter of 2024 as the ongoing conflict with the Hamas had taken a significant toll on economic activity. This marked the weakest growth since 2020, when the covid-19 pandemic severely impacted the economy. However, the Gross Domestic Product (GDP) in Israel expanded 5.46 percent in the fourth quarter of 2024 over the same quarter of the previous year. GDP annual growth rate in Israel averaged 3.73 percent from 1996 until 2024, reaching an all-time high of 16.27 percent in the second quarter of 2021 and a record low of -8.37 percent in the second quarter of 2020.  Figure 11-1: Israel's economic growth rate  Figure 11-2: Israel's GDP growth (quarterly) As Figure 12 shows, industrial production in Israel decreased 7.4 percent in December of 2023 and 9.8 percent in March 2024 and then increased 15.9 percent in December 2024. Industrial production in Israel averaged 5.66 percent from 1960 until 2025, reaching an all-time high of 62.70 percent in June of 1968 and a record low of -29.20 percent in June of 1967.   Figure 12: Industrial production in Israel As Figure 13 shows, unemployment rate in Israel decreased from 4.30 percent in January 2023 to 2.80 percent in November 2023 and 2.60 percent in December 2024. This decline seems to result from the fact that Israeli government called up tens of thousands of reservists to replace conscripts and active-duty soldiers. And then unemployment rate in Israel slightly increased to 2.9% in March 2025. Unemployment rate in Israel averaged 5.89 percent from 1992 until 2025, reaching an all-time high of 11.40 percent in March of 1992 and a record low of 2.60 percent in August & December of 2024.  Figure 13: Unemployment Rate in Israel As Figure 14 shows, the number of unemployed persons in Israel decreased to 119200 in December of 2024 from 184000 in January 2023. Unemployed persons in Israel averaged 192800 from 1991 until 2025, reaching an all-time high of 305400 in September of 2003 and a record low of 119200 in December of 2024.  Figure 14: The number of unemployed persons in Israel As Figure 15 shows, after October 2023, exports in Israel fluctuated between 4470 USD Million in October 2023, 5330 USD Million in March 2024, 4320 USD Million June 2024 and 5250 USD million in December 2024. Exports in Israel averaged 1836.30 USD Million from 1959 until 2025, reaching an all-time high of 6276.70 USD Million in March of 2022 and a record low of 10.80 USD Million in July of 1959.   Figure 15: Exports in Israel As Figure 16 shows, imports in Israel fluctuated between 8090 USD Million in August 2023, 7590 USD Million in December 2023, 7010 USD Million in August 2024, and 8318.70 USD Million in March 2025. Imports in Israel averaged 2500.72 USD Million from 1959 until 2025, reaching an all-time high of 10372.30 USD Million in May of 2022 and a record low of 33.10 USD Million in November of 1959.   Figure 16: Imports in Israel As Figure 17 shows, inflation rate in Israel decreased from 5.40 percent in January 2023 to 3.70 percent in October 2023 and 2.50 percent in February 2024. It then increased to 3.60 percent in August 2024 and 3.80 percent in January 2025. Inflation rate in Israel averaged 26.75 percent from 1952 until 2025, reaching an all-time high of 486.20 percent in November of 1984 and a record low of -2.70 percent in March of 2004.   Figure 17: Inflation rate in Israel As Figure 18 shows, despite on-going warfare in Gaza, gasoline price in Israel did not rise significantly. It increased from 1.82 USD/Liter in September 2023 to 1.98 and 2.14 USD/Liter in January and May 2024, respectively and then dropped to 2.06 and 2.04 USD/Liter in August 2024 and February 2025, respectively. Gasoline prices in Israel averaged 1.78 USD/Liter from 1995 until 2025, reaching an all-time high of 2.30 USD/Liter in June of 2022 and a record low of 0.73 USD/Liter in December of 1995.   Figure 18: Gasoline price in Israel IV. Conclusion The Gaza war has had negative impacts on both Palestine and Israel, but the negative effects were much bigger in Palestine than in Israel. The number of casualties was much higher in Palestine. Especially the war brought down Palestine economy, lowering economic growth, reducing industrial productions, and increasing inflation & unemployment in Palestine. The Israeli economy has also slowed down, and budget deficit increased. However, unemployment went down, and inflation has been stable between 2 and 5 percent. Trade has maintained a pre-war level, although there have been some difficulties. References Bilmes, Linda, and Joseph E. Stiglitz. 2006. The Economic Costs of the Iraq War: An Appraisal Three Years After the Beginning of the Conflict. Cambridge, MA: National Bureau of Economic Research. Chan, Steve. 1985. “The Impact of Defense Spending on Economic Performance: A Survey of Evidence and Problems.” Orbis 29 (2): 403–434.CIA Factbook. 2024. “Ukraine.”Gilpin, Robert. 1981. War and Change in World Politics. New York: Cambridge University Press.  Glick, Rouven and Alan Taylor. 2010. “Collateral Damage: Trade Disruption and the Economic Impact of War.” The Review of Economics and Statistics 92(1): 102-127.Iklé, Fred C. 1991. Every War Must End. New York: Columbia University Press.Kešeljević, Aleksandar, and Rok Spruk. 2023. Estimating the Effects of Syrian Civil War. Empirical Economics.  Koumi, Valley. 2005. “War and Economic Performance.” Journal of Peace Research 42 (1): 67-82. Liadze, Iana, Corrado Macchiarelli, Paul Mortimer-Lee, and Patricia Sanchez Juanino. 2023. “Economic Costs of the Russia-Ukraine War.” The World Economy 46: 874–886.Organski, A. F. K., and Jacek Kugler. 1980. The War Ledger. Chicago: University of Chicago Press. Russett, Bruce. 1970. What Price Vigilance? The Burdens of National Defense. New Haven: Yale University Press.

China relies heavily on Malaysia as a bridge for cooperation, dialogue, and coordination with the Gulf Cooperation Council (GCC) countries and China in confronting the economic and political challenges imposed by the United States on China and many countries around the world after President “Trump” increased US tariffs on China. To this end, China seeks to coordinate with Malaysia during its presidency of the (ASEAN Summit) this year 2025, and its concurrent presidency of the (ASEAN-GCC Cooperation Summit), a situation China is keen to capitalize on through its distinguished partnership with Malaysia. In addition, Chinese President Xi Jinping's visit to Malaysia in mid-April 2025, during which they issued a joint statement on support for Gaza and the Palestinian cause in the face of Israeli violations.  Malaysia's meetings and its current hosting of the (ASEAN Summit and the ASEAN-GCC Cooperation Summit) come after important trade talks between the United States and China in Switzerland in May 2025, the same month as the ASEAN and ASEAN-GCC Cooperation Summits with China. The ASEAN-GCC Summit may be a real opportunity to lay the foundation for deeper negotiations between the world's two largest economies after a period of escalation in the trade war between the two sides.  Given the importance of the ASEAN region to Southeast Asia, which represents China's vital backyard, it is at the heart of the strategy for managing major events between Washington and Beijing in the Indo-Pacific region. To this end, Washington and Beijing signed a strategic partnership agreement with ASEAN, given its critical importance to both countries.  Former US President Joe Biden signed a new Comprehensive Strategic Partnership agreement between the United States and the Association of Southeast Asian Nations (ASEAN), describing it as a decisive step toward addressing the biggest issues of our time. Meanwhile, Beijing emphasized strengthening the Comprehensive Strategic Partnership agreement it signed with ASEAN in 2021, with China keen to jointly build the world's largest free trade area.  The most prominent complex global issues on the agenda of ASEAN countries, China, Malaysia, and the Gulf Cooperation Council (GCC) in their confrontation with Washington and Russia include (the war in Ukraine, climate change, regional tensions around the Taiwan Strait and the South China Sea, North Korea's missile launches, the recent Gaza war, and US tariffs), among others.To this end, China officially confirmed Chinese Premier Li Keqiang's visit to Malaysia in late May 2025 to attend a summit coordinated by China with a newly formed group of Southeast Asian and Arab countries, through which Beijing hopes to garner support in the face of Washington's tariffs. China also launched a campaign to mend relations with the European Union, Japan, and South Korea, after US President Donald Trump imposed a series of tariffs on numerous countries on April 2, 2025, before abruptly suspending them for dozens of countries except China.  Chinese Premier “Li Keqiang” will also be in Kuala Lumpur, Malaysia, to attend the (ASEAN-GCC-China Summit) on May 27, 2025, which will be held one day after the ASEAN Summit scheduled for May 26, 2025. China has not publicly confirmed the names and number of Chinese officials who will comprise the Chinese delegation it will send to Malaysia before the summits in Malaysia.  From my analytical perspective, this may stem from China's fear that the United States and its ASEAN allies will exert pressure on those Chinese figures who will participate in the (ASEAN-GCC Summit) in particular.  In my view, Chinese President Xi Jinping's visit to Malaysia in mid-April 2025 is linked to the role Malaysia will play, along with its ally China, in confronting US protectionist policies. This follows President Xi Jinping's visit to three Southeast Asian countries (Vietnam, Malaysia, and Cambodia) to win them over to China's side in its trade war with the United States. To this end, China is seeking to win Malaysia over, particularly at this time, as Beijing intensifies its current efforts to secure partnerships to protect its economy from the escalating trade war with the United States. While the three countries (Vietnam, Cambodia, and Malaysia) will benefit from Chinese President Xi Jinping's visit in mid-April 2025 to diversify their Chinese supply chains, it also places them in a challenging position with the US, and in the crosshairs of US President Trump as he seeks to restrict the reshipment of Chinese goods to its regional neighbors and then transport them through them to the world.  In anticipation of all stages of US escalation against China, Chinese President “Xi Jinping” convened and chaired the Central Working Conference on Diplomacy with Neighboring Countries in early May 2025. This conference highlighted China's increasing focus on strengthening regional relations, particularly with its neighbors, most notably Malaysia and its ASEAN partners.  On the other hand, there is competition between the United States, China, and Europe to enhance economic presence at the joint summit between the Malaysia-led ASEAN and the Gulf Cooperation Council (GCC) in Kuala Lumpur, Malaysia. The GCC countries are in fierce competition with the United States, Russia, China, and Europe to strengthen their economic presence in the vibrant ASEAN, which holds promising opportunities in multiple fields for the Gulf community. The ASEAN summit with the Gulf states and China represents an important milestone that reflects the growing interest of the leaders of the Gulf Cooperation Council (GCC) in strengthening relations with the ASEAN countries and China, in the face of economic and geopolitical challenges that require deeper coordination and more flexible cooperation. This is especially true given the unbalanced nature of Trump's personality, from the perspective of the Gulf states, even his closest allies. Many GCC leaders fear a sudden Trump coup against his closest allies, which is one of the reasons for the Gulf's move towards rapprochement with the ASEAN and China, led by Malaysia. The geopolitical transformations and escalating international competition between China and the United States over the Asian region and the Association of Southeast Asian Nations (ASEAN) in East and Southeast Asia, on the part of Russia, Europe, the United States, and China, have highlighted the efforts of the Gulf Cooperation Council (GCC) countries to strengthen their economic and political presence in this vital region through strategic partnerships that transcend traditional considerations and are based on mutual interests and commonalities. ASEAN countries represent emerging economies that hold promising opportunities in multiple fields for China and the Gulf countries, such as energy and infrastructure. This is why all GCC countries are currently investing in it. Furthermore, there are important commonalities, including that these countries, like the Gulf states, are also seeking to distance themselves from geopolitical polarization in their regional environment, especially after the recent Gaza war. The GCC countries are currently unwilling to enter into economic alliances against other parties. This provides common ground for fruitful cooperation between all, led and coordinated by Malaysia as a bridge for communication, dialogue, and coordination between the GCC countries, primarily with China.  There is also a mutual desire to strengthen Sino-Gulf relations with ASEAN countries through Malaysia at various levels, including cultural cooperation, based on a shared history spanning hundreds of years, particularly through the Chinese Belt and Road Initiative, which represents numerous cultural and civilizational aspects, in addition to its economic, commercial, and investment importance for all.  The secret to ASEAN's success and the encouragement of GCC countries to cooperate and coordinate with it and with China through Malaysia is its focus on economic objectives, transcending ideology and non-interference in the internal politics and affairs of other countries, while giving priority to development and investment. The new and vital area of coordination between ASEAN, China, Malaysia, and the GCC countries is the Maritime Cooperation Mechanism, recognizing the importance of oceans and seas as a key factor in driving growth.  Therefore, there is a working agenda for a framework for maritime cooperation among all concerned countries, to ensure the security of maritime and logistical straits, achieve the principles of maritime safety and security, and ensure freedom of navigation and air traffic without obstacles that limit the movement of legitimate maritime trade. It also promotes peaceful resolution of disputes in accordance with the principles of universally recognized international law.   The Gulf's move toward cooperation with ASEAN countries and China, through Malaysia's coordination of the Gulf Cooperation Council (GCC) summit with ASEAN and China, has several fundamental reasons. These include the United States' imposition of tariffs on several countries, including the GCC itself, at varying rates. This will impact their exports to the US market. This move will inevitably push them to seek alternative markets, enhancing opportunities for cooperation between ASEAN and China, led by Malaysia, with the Gulf countries. This comes amid Chinese efforts to leverage these changes to strengthen its negotiating position vis-à-vis the Americans. Perhaps the positive thing is that Washington announced the suspension of these tariffs on China for 90 days, but I most likely expect it to impose other tariffs on China and the Gulf countries and set other conditions. This will make economic relations between the GCC countries, ASEAN, and China vis-à-vis Washington more tense in the short and long term, as their exports to the US will inevitably be affected in the near future. Therefore, we note that these common challenges facing the Gulf Cooperation Council (GCC), ASEAN, China, and Malaysia together in the face of these American pressures, even after Trump's visit to the three Gulf states (Saudi Arabia, Qatar, and the UAE) in the same month as the (ASEAN-China-GCC summit) in Malaysia in May 2025, open the door to new economic dialogues between all parties and help form regional blocs between ASEAN, China, Malaysia, and the GCC countries. There is clear enthusiasm from all parties to make this happen on the ground. Suffice it to mention the keenness of the concerned parties to hold real summits at the level of heads of state, in addition to ongoing ministerial and technical meetings. This reflects the existence of a genuine political will that seeks to translate all these aspirations into practical partnerships on the ground.  In this context, China, ASEAN, and Malaysia welcomed Saudi Arabia's bid to host Expo 2030 in Riyadh, highlighting the importance of organizing regional and international exhibitions to revitalize economic and cultural exchanges between the Gulf and ASEAN regions, including Southeast Asian countries, China, and Malaysia. They also emphasized the importance of conducting consultations to explore cooperation on implementing the “ASEAN Integration Initiative Action Plan” (2021-2025) and integration programs in the Gulf Cooperation Council (GCC) countries with China and Malaysia. This is what the ASEAN-GCC Joint Summit with China and Malaysia seeks to explore and achieve.  The ASEAN-GCC-China Joint Summit, led by Malaysia, is expected to discuss the Joint Action Plan until 2028 and enhance cooperation between the two organizations, particularly political, economic, security, and cultural aspects, as well as investment, tourism, agriculture, halal products, education, and training.  Coordination between these parties, through Malaysia's presidency of the current ASEAN-GCC summit with China, is focused on key economic partnership priorities, namely enhancing regional market integration and integrating them through cooperative partnerships among all, while strengthening the multilateral trading system. This summit also aims to strengthen existing relations between the Gulf states, ASEAN, and China, given the current circumstances, regional conditions, and rapid international changes. The summit will also enhance the dynamics of relations between ASEAN, the GCC, China, and Malaysia, by discussing the path forward and strengthening cooperation across a number of existing areas of cooperation, including combating international crimes and terrorism. It is also an opportunity to identify new areas of cooperation in security, politics, economics, and cultural pillars. The most important aspect, from my perspective, is that the currently emerging multipolar international order requires middle powers such as the Gulf states, ASEAN, China, and Malaysia to stick together and reach a joint dialogue to support multilateral relations, particularly political aspects, and to coordinate their common positions, especially after the recent Gaza war and the American pressures that have become openly exerted on everyone. In general, the relationship between the Gulf and ASEAN sides, along with China and Malaysia, is considered primarily economically important for all, but it has also evolved due to circumstances in the political dimension. ASEAN countries enjoy a reputation for great neutrality and flexibility regarding international positions, with a greater focus on the economic dimension, while Gulf leaders are placing greater importance on developmental aspects alongside the economy.

한국어로 읽기 Leer en español In Deutsch lesen Gap اقرأ بالعربية Lire en français Читать на русском The United States and Vietnam, former adversaries but now significant trading partners, are in their second year of the comprehensive strategic partnership, further improving their ties. In 2025, the comprehensive strategic partnership makes a major two-year milestone as both America and Vietnam are thirty years into normalization, as five decades ago, both countries were intertwined in one of the most deadly wars in modern history. The comprehensive strategic partnership is a significant counterbalance in international relations in the Indo-Pacific region against China’s rising soft power and naval force projection into the South China Sea. In its second year, questions remain: Will the partnership hold up, and is there still room to grow between Washington and Hanoi? On September 10th, 2023, then-U.S. President Joe Biden and the late General Secretary Nguyen Phu Trong of Vietnam signed the comprehensive strategic partnership, which is a major turning point in Southeast Asia. The elevation of relations between Hanoi and Washington puts America along the same bilateral status as Russia and China in Vietnam’s hierarchy, signifying a major diplomatic breakthrough between the former two countries. Under the upgraded relations, Vietnam and the United States will further strengthen cooperation in trade, investments, science, technology, and climate action, with more opportunities in other sectors. Southeast Asia is an emerging global supply chain hub for not just the United States but the entire world, and Hanoi is a top ten major trading partner of Washington. The opportunity to grow supply chains in the Indochina region with Vietnam as a starting point would be an essential step toward digressing from the People’s Republic of China, which the United States government looks to do, especially as the latter two superpowers now compete for global hegemonic status. The United States and Vietnam share the ideals of growing their technological and economic sectors. The growth of semiconductors in Eastern Asia continues to grow not only in Taiwan, China, Japan, and South Korea but also in Vietnam. Amkor, an American firm, is opening a $1.6 billion firm in Vietnam for this endeavor. Furthermore, Reuters reported in January 2024 that fifteen American firms are vying to invest $8 billion in semiconductors in Vietnam. American companies and business owners currently heavily invest in Vietnam, such as Intel, Apple, Nike, Amkor, Marvell, and First Solar, and the list can continue to grow in the comprehensive strategic partnership. Simultaneously, Vietnamese companies such as VinFast and VGN Corporation are increasing investments in the United States. VinFast’s growth in North Carolina is helping the local economy by creating more manufacturing opportunities. Though Vietnam and the United States have reached new peaks in upgraded relations, it is vital to mention that the comprehensive strategic partnership is not a mutual defense accord including direct military assistance. During the joint signing, neither Washington nor Hanoi mentioned ‘containment’ of Beijing’s ambitions, even though the South China Sea continues to grow into a potential regional powder keg. Vietnam’s upgraded partnership with the United States correlates with India’s current strategy of not fully aligning to one side to trigger ire or retaliation from the People’s Republic of China but strategically keeping full diplomatic cohesion with all regional powers while maintaining its sovereignty. Vietnam is also a close ally of Russia as the United States ignored the original requests for their self-determination post-WWII. Though they do not supply the Russian military’s illegal aggression in Ukraine, it is tantamount for the U.S. government not to push or strong-arm Hanoi closer to Moscow. Nevertheless, in the future, the U.S. and Vietnamese Armed Forces could establish backchannels to warn each other of any potential military threat by the People’s Liberation naval movements around the South China Sea without openly engaging in military cooperation that could draw strong actions from China and Russia. Hanoi looks to advance its interests amidst rising economic and technological competition in the Indo-Pacific and growing American investments will only push Vietnam’s marketing further. Simultaneously, Washington gains a growing economic and diplomatic presence in Southeast Asia. To promote a growing relationship, the United States can also further reconciliation efforts in the aftermath of the Vietnam War, as many of Vietnam’s demographic majority and elderly still remember the American aggression in the Indochina conflicts. In its second year, Hanoi and Washington continue to grow ties through several key sectors that advance both country’s national interests and further open opportunities between the East and West. Rebuilding and rewriting the wrongs of the past, the United States reached out to Vietnam to solidify a comprehensive strategic partnership, which is decades in the making and a landmark agreement long envisioned by Ho Chi Minh. With opportunities to expand into the technology, economic, and trade sectors, Hanoi and Washington continue to grow bilateral ties in year two of the partnership. The text of this work is licensed under  a Creative Commons CC BY-NC 4.0 license

한국어로 읽기 Leer en español In Deutsch lesen Gap اقرأ بالعربية Lire en français Читать на русском Last week, the Trump administration signed a deal with Ukraine that gives it privileged access to Ukraine’s natural resources. Some news outlets described the deal as Ukrainian President Volodymyr Zelensky “caving” to US President Donald Trump’s demands. But we see the agreement as the result of clever bargaining on the part of Ukraine’s war-time president. So, what does the deal mean for Ukraine? And will this help strengthen America’s mineral supply chains? Ukraine’s natural resource wealth Ukraine is home to 5% of the world’s critical mineral wealth, including 22 of the 34 minerals identified by the European Union as vital for defence, construction and high-tech manufacturing. However, there’s a big difference between resources (what’s in the ground) and reserves (what can be commercially exploited). Ukraine’s proven mineral reserves are limited. Further, Ukraine has an estimated mineral wealth of around US$14.8 trillion (A$23 trillion), but more than half of this is in territories currently occupied by Russia. What does the new deal mean for Ukraine? American support for overseas conflict is usually about securing US economic interests — often in the form of resource exploitation. From the Middle East to Asia, US interventions abroad have enabled access for American firms to other countries’ oil, gas and minerals. But the first iteration of the Ukraine mineral deal, which Zelensky rejected in February, had been an especially brazen resource grab by Trump’s government. It required Ukraine to cede sovereignty over its land and resources to one country (the US), in order to defend itself from attacks by another (Russia). These terms were highly exploitative of a country fighting against a years-long military occupation. In addition, they violated Ukraine’s constitution, which puts the ownership of Ukraine’s natural resources in the hands of the Ukrainian people. Were Zelensky to accept this, he would have faced a tremendous backlash from the public. In comparison, the new deal sounds like a strategic and (potentially) commercial win for Ukraine. First, this agreement is more just, and it’s aligned with Ukraine’s short- and medium-term interests. Zelenksy describes it as an “equal partnership” that will modernise Ukraine. Under the terms, Ukraine will set up a United States–Ukraine Reconstruction Investment Fund for foreign investments into the country’s economy, which will be jointly governed by both countries. Ukraine will contribute 50% of the income from royalties and licenses to develop critical minerals, oil and gas reserves, while the US can make its contributions in-kind, such as through military assistance or technology transfers. Ukraine maintains ownership over its natural resources and state enterprises. And the licensing agreements will not require substantial changes to the country’s laws, or disrupt its future integration with Europe. Importantly, there is no mention of retroactive debts for the US military assistance already received by Ukraine. This would have created a dangerous precedent, allowing other nations to seek to claim similar debts from Ukraine. Finally, the deal also signals the Trump administration’s commitment to “a free, sovereign and prosperous Ukraine” – albeit, still without any security guarantees. Profits may be a long time coming Unsurprisingly, the Trump administration and conservative media in the US are framing the deal as a win. For too long, Trump argues, Ukraine has enjoyed US taxpayer-funded military assistance, and such assistance now has a price tag. The administration has described the deal to Americans as a profit-making endeavour that can recoup monies spent defending Ukrainian interests. But in reality, profits are a long way off. The terms of the agreement clearly state the fund’s investment will be directed at new resource projects. Existing operations and state-owned projects will fall outside the terms of the agreement. Mining projects typically work within long time frames. The move from exploration to production is a slow, high-risk and enormously expensive process. It can often take over a decade. Add to this complexity the fact that some experts are sceptical Ukraine even has enormously valuable reserves. And to bring any promising deposits to market will require major investments. What’s perhaps more important It’s possible, however, that profits are a secondary calculation for the US. Boxing out China is likely to be as – if not more – important. Like other Western nations, the US is desperate to diversify its critical mineral supply chains. China controls not just a large proportion of the world’s known rare earths deposits, it also has a monopoly on the processing of most critical minerals used in green energy and defence technologies. The US fears China will weaponise its market dominance against strategic rivals. This is why Western governments increasingly make mineral supply chain resilience central to their foreign policy and defence strategies. Given Beijing’s closeness to Moscow and their deepening cooperation on natural resources, the US-Ukraine deal may prevent Russia — and, by extension, China — from accessing Ukrainian minerals. The terms of the agreement are explicit: “states and persons who have acted adversely towards Ukraine must not benefit from its reconstruction”. Finally, the performance of “the deal” matters just as much to Trump. Getting Zelensky to sign on the dotted line is progress in itself, plays well to Trump’s base at home, and puts pressure on Russian President Vladimir Putin to come to the table. So, the deal is a win for Zelensky because it gives the US a stake in an independent Ukraine. But even if Ukraine’s critical mineral reserves turn out to be less valuable than expected, it may not matter to Trump.