“Episode #1 Boardrooms’ Best,” Jack Devine in discussion with Nancy May, January 1, 2018

“Boardrooms’ Best” featured TAG President Jack Devine as their guest on the very first episode of the podcast hosted by Nancy May, CEO of The BoardBench Companies, LLC. Drawing upon his experience serving on a number of boards as well as his work in the private business intelligence industry, Jack discussed the importance of companies and their boards doing their due diligence ahead of a deal – whether it’s due diligence on a potential business partner, an acquisition target, an industry, or a country. According to Jack, companies and their boards need on-the-ground information to mitigate potential risks. Jack argues that ultimately, tough questions need to be asked to protect the company, and it’s best when boards develop a culture that accepts this as part of doing business.

Episode #1 Boardrooms’ Best Interview with Jack Devine

“Episode 309: Jack Devine on his three decade career in the CIA,” interview with Ian Scotto on SOFREP Radio, December 14, 2017

TAG President Jack Devine went on SOFREP Radio in December 2017 to talk about his long career in the CIA. SOFREP Radio focuses on special operations military and intelligence news, hosted by Army Ranger/Green Beret Jack Murphy and New York Festivals award winning radio producer Ian Scotto. In his conversation with Ian Scotto, Jack talked about his work for the Agency, debunked some of the myths of the CIA, and discussed his current work in the private business intelligence industry and his recent book Good Hunting: An American Spymaster’s Story.

Episode 309: Jack Devine on his three decade career in the CIA

“CIA Vet Devine: Korea Still Number One Existential Threat to US,” Jack Devine on Bloomberg Markets AM, October 2017

Speaking on Bloomberg Markets AM with Pimm Fox and Lisa Abramowicz on October 25, 2017, TAG President Jack Devine noted that North Korea remains “the number one existential threat to all of us” as Kim Jong-Un gets closer and closer every day to being able to deliver a nuclear weapon to the United States. He also noted, however, that North Korea’s Kim Jong-un is trying to figure out how far he can press his agenda and is stumped by President Trump. Asked if President Trump might decide on his own that Kim Jong-un has crossed a line and take action, Mr. Devine commented that, “there are checks and balances on the President and the President’s ability to take a unilateral decision.”

CIA Vet Devine: Korea Still Number One Existential Threat to US

Jack’s Fall 2017 Intelligence Report

TAG President Jack Devine provides his Fall 2017 Intelligence Report covering Trump, the Russia probe, the Iran Nuclear Deal, the threat of North Korea, and more.

Jack’s Fall 2017 Intelligence Report

Trump Normalcy

Despite President Trump’s lackluster congressional record to date, his administration is getting stronger. The White House staff, cabinet members and the government career professionals are slowly but surely settling into running the government. Likewise, foreign leaders, while still concerned, are starting to size up Trump, and are learning how to deal better with him. No matter how one judges Trump’s performance, the unending flow of national and international issues has provided, and will continue to provide, opportunities for Trump to play the powerful role of President. On this stage, he has cut a deal with the Democrats on the debt, arm wrestled with North Korean leader Kim Jung-un over nuclear weapons, and grappled with hurricane disasters and the shooting in Las Vegas. Moreover, the American public at large is getting used to a tweeting President who makes regular outspoken sharp-edged remarks about friend and foe alike. The prospect for a truncated first term is growing dim even among his biggest critics. Perhaps the biggest obstacle to sound decision-making and progress on the issues Trump cares about is this tendency to publicly criticize senior officials and Congress. This may result in a cabinet that is either afraid to speak up on critical issues or unwilling to stay, as well as create recalcitrant partners in Congress. This is worth keeping an eye on since it could become Trump’s Achilles heel.

Russia Probe

The Russia investigation is throwing up ample evidence of Russian Intelligence involvement in the 2016 election. Their use of social media platforms is now sparking the necessary soul-searching among the major social media companies. But, as stated in the previous forecast, the Mueller investigation is not likely to tie Trump to the charge of collusion, though some of Trump’s former colleagues could well get nicked for other transgressions.

Steep Climb for the Dems

With the Trump Administration gaining strength, the Democrats have their work cut out for them to recapture the Senate in 2018 and the Presidency in 2020. In the aftermath of the Hillary defeat, the party appears to be moving leftward, coalescing around single payer healthcare and immigrant rights. However, it still lacks a coherent message and compelling messengers, making electoral gains at the state and national level a steeper climb than many are prepared to accept just yet.

Economic Upswing Continues

The U.S. economy continues to grow, with the stock market making strong gains and manufacturing output hitting a 13-year high. There are conflicting views on what Trump’s tax plan would do to economic growth in the long term and whether a cut in corporate taxes would result in a significant upswing. I’m siding with the optimists on this issue. However, given the doomed GOP health care effort, it’s not at all certain that tax reform legislation will go through. But, the Trump Administration will muster all the muscle it can to get it done. Trump needs this victory for a whole host of reasons, including maintaining the influence of the Presidency. Still, the U.S. economy appears on solid footing, particularly as compared to other global markets.


Given President Trump’s campaign remarks and long-standing beliefs about the Obama Nuclear Deal, it is no surprise that he didn’t certify that Iran is adhering to all of the requirements of the deal. That said, he now has been exposed to extensive and deep intelligence reports and think pieces that highlight the considerable downside impact of abrogating the deal. This and the fact that virtually all key advisors and allies are against scuttling it, likely has tempered his decision to walk away altogether and instead hand it off to Congress. Congress now has 60 days to decide whether to impose stronger sanctions which it is unlikely to do. There are enough combined Democratic and Republican Party votes to stop this from happening. Iran will respond with negative rhetoric about the non-certification, but will not take any action that will imperil foreign investment and renewed economic activity. If Congress somehow pulls together enough votes to impose new sanctions, Iran will have no choice but to walk, and we will be off to the races with two rogue nuclear powers-Iran and North Korea-and no good military options.

North Korea

With military postures heightening on both sides, there is ever-diminishing space for error in the conflict between Washington and Pyongyang. The chances for misinterpretation are high with potentially devastating consequences. Despite Trump’s chiding of Secretary of State Rex Tillerson, it is time to negotiate since there is no realistic military solution for stopping Kim Jong-un from expanding his nuclear arsenal and ability to deliver it. China seemingly is exasperated and has taken a harder line with North Korea than ever before. With some prompting from the U.S., China may now be open to bringing Kim to the negotiating table for revived “Six Party” talks. We should not be overly optimistic that the talks will lead to a meaningful deal or to North Korea dismantling its nuclear program. At a minimum, however, these talks could yield a more cohesive alliance among the five parties in dealing with North Korea, and stall the testing of bombs and missiles while the alliance tries to organize a more muscular response to Kim Jong-un.


The fall of Raqqa to the Syrian Defense Forces (SDF) has put a stake through the heart of the ISIS Caliphate, ending its naive idea of creating its own Islamic state as well as ending its use of traditional armed forces. Like al-Qaeda before it, ISIS is now a terrorist organization in decline, although still a dangerous force to be reckoned with. It has lost the base from which it launched operations against the West, and will move to a post-territorial strategy. Some fighters will attempt to regroup, while others will join other global terrorist groups or return quietly to the West. For sure, ISIS will try to maintain its relevance and influence by attempting to stage bold attacks against Western targets as well as encouraging its global sympathizers to conduct attacks of opportunity. It will have its successes, and Western intelligence organizations must remain vigilant.


Despite Presidents Trump and Erdogan’s warm statements after their September meeting in New York, U.S.-Turkish relations have continued their precipitous descent. Both countries recently suspended visa services in the wake of an arrest of a U.S. consulate (Turkish) staffer on trumped up espionage charges. A symptom of President Erdogan’s increasing authoritarianism, the arrests are also widely regarded as an attempt to leverage the extradition of Pennsylvania-based Turkish cleric Fethullah Gulen, who Erdogan holds responsible for the 2016 failed coup attempt. Erdogan’s relations with Germany are similarly frayed as Chancellor Angela Merkel recently called for scrapping Turkey’s EU accession bid.

While Ankara and Washington still share common security goals, they are decidedly at odds in the war against ISIS as Washington leans heavily on local militias, particularly the Kurdish YPG, whom Erdogan views as linked to Turkey’s domestic Kurdish separatist force. Now that YPG and allied forces have retaken the ISIS stronghold of Raqqa, Kurdish influence in Raqqa will no doubt remain a bone of contention. The Kurdish loss of oil rich Kirkuk to Iraqi forces in northern Iraq will be a relief to Ankara, but a headache to Washington because we have relied so heavily on Kurdish forces in the fight against ISIS. Washington will need to work to prevent a protracted battle over the issue between Kurdistan and Iraq. In Turkey as well, Washington continues to have an enormous stake in keeping relations on track, if for no other reason than to protect its Turkey-based Incirlik Airforce base. The Trump Administration will likely take this moment to look for incentives to bring Erdogan back on the reservation.


Voters across Europe are continuing to challenge or upend traditional parties and governing coalitions in response to ongoing economic and social dislocations and immigration fears. Austria’s centrist coalition was the most recent to fall at the hands of an anti-immigrant 31-year old political wunderkind, Sebastian Kurz, who may govern in coalition with the far-right Freedom Party. In Germany, Merkel’s center is still holding, but the recent election saw the unthinkable, an ultra-right party pass the vote threshold to make it into Parliament.

In Catalonia, fed up voters have turned Spanish politics on their head when they voted for independence under the leadership of firebrand Carles Puigdemont. Prime Minister Rajoy’s arrest of Catalan politicians and violent crackdown on voters and protesters only serves to fan the flames in Catalonia. But Rajoy is likely to prevail as Puigdemont’s independence bid has gotten the cold shoulder from the EU and foreign governments. Puigdemont is calling for dialogue, but Rajoy is so far having none of it and has been given him until tomorrow to back down or risk a take-over of the regional government. Puigdemont will likely be forced to accept a compromise that keeps Catalonia in Spain, but provides some meaningful, if limited, concessions toward increased autonomy – and Rajoy would be wise to accommodate some of the most reasonable ones. Both must seem to have “won,” even though many of their constituents will feel otherwise.


Unfortunately, but as predicted, months of protests in Venezuela did nothing to remove President Nicolas Maduro from power or alleviate the economic and humanitarian crisis. Surviving the wave of protests, Maduro consolidated power by jailing opposition figures and calling a sham election for a constituent assembly to rewrite the constitution. The recent regional elections, which may have been substantially rigged, were a further blow to the opposition. Maduro’s actions have been met with U.S. sanctions on Venezuela and government officials. Even so, the opposition is on for a protracted and uncertain struggle for the foreseeable future. In addition, the Venezuelan people continue to suffer, living without basic goods and services, and seeking to escape to the U.S. or Colombia. A default on debt payments coming due soon could worsen the crisis and create chaos for the only industry bringing in any money to Venezuela – oil.

If you or your firm would like individualized consultation or information, please contact Jack Devine at The Arkin Group.

“Former CIA Acting Director Devine: ‘Very Concerned’ About Korea” Jack Devine on Bloomberg Markets AM, August 2017

In an interview with Bloomberg Markets AM with Pimm Fox and Lisa Abramowicz on August 14, 2017, TAG President Jack Devine talks about why it’s time for negotiation – not military action – with North Korea. Devine said, “It’s been a long, long time since I thought we were in a situation where it’s conceivable that we could have a military confrontation that could end up in some sort of nuclear incident.” Given the serious threat, Devine argues that “one way or the other, we have to get back to the table.”

Former CIA Acting Director Devine: ‘Very Concerned’ About Korea

“It’s time for negotiation with North Korea, not military action,” Jack Devine & Yoshi Yamamoto, Houston Chronicle, August 10, 2017

Neither President Donald Trump’s “Fire and Fury” nor Kim Jong-Un’s most recent threat about Guam provide a path to sensibly resolve the growing North Korea nuclear crisis, according to TAG President Jack Devine and Japanese policy analyst Yoshi Yamamoto. In an article published August 10, 2017 in the Houston Chronicle, Devine and Yamamoto argue that South Korea’s new President, Moon Jae-in, and overtures to its neighbors to hold direct military talks is a much-needed opportunity to change the course of our dealings with North Korea. They believe that ultimately, the end goal is a treaty with Kim Jong-Un that includes the incremental denuclearization (or at a minimum a cessation on further development of its program) based on a robust verification protocol – in exchange for diplomatic and economic reintegration with the world.

It’s Time for Negotiation with North Korea, Not Military Action

Afghanistan: America’s Longest War

The United States has been at war in Afghanistan since October 2001 – making this America’s Longest War. The challenges in Afghanistan are not new, but the Trump administration is looking for a new approach and currently weighing the options for US engagement in Afghanistan going forward. In this context, TAG Senior Director Amanda Mattingly moderated a panel on the war in Afghanistan at the August 8th Members Forum at the World Affairs Council of Atlanta. Speaking on the panel were Ken Keen, Retired Lieutenant General, U.S. Army, Senior Mentor, Joint Staff J7 and Jon Keen, Former Infantry Officer, U.S. Army – two generations of a military family who were able to provide insight from personal experience on the ground in Afghanistan and Pakistan as well as their views from a tactical and strategic perspective.

Jack’s Summer Intelligence Report, July 2017

TAG President Jack Devine provides his Summer Intelligence Report, including his take on Trump politics, relations with Russia, global dynamics, security, and North Korea.

Jack’s Summer Intelligence Report

Trump Politics
Trump has been President for over five months and will remain so for at least the next 43 months, failing impeachment, which is very unlikely. As a country, we are conspicuously more divided and politically agitated than at any time since the 1960s and the Vietnam War. It is hard to see what will alter this political environment for the foreseeable future, other than a unifying major economic or national security crisis.

That said, the Russian investigation as well as the possible criminal and “obstruction of justice” investigations by the Special Counsel Robert Muller will plod forward at the expense of the Trump Administration’s domestic and foreign policy ambitions. All of Trump’s major objectives are slow in coming, and will remain so, including tax, health care and immigration reform, as well as infrastructure spending and job creation. While the road map for how Trump will govern has started to take shape, it remains blurry on all fronts.

Relations with Russia
In the meantime, a reset with Russia will be much harder given the strong indications from the Intelligence Community that the Russians hacked the 2016 U.S. Presidential Election. Despite the media’s obsession with the Russia story, including the recent news of Trump Jr.’s meeting with Russians during the campaign, I am sticking with my earlier Forecast that evidence of collusion between the Trump campaign and the Russian government will remain elusive. That’s not to say that the Special Counsel won’t find indications of murky contacts and business dealings and won’t feel compelled, especially after such a major investigation and cost, to bring a few lesser charges such as falsifying official documents and making false statements to law enforcement officials. But, ultimately no one will go to jail. The Administration will see it as vindication, and the Democrats will see it as fodder for the 2018 mid-term elections, (if the investigation is completed by then!).

The most important result in the long run will be the conclusion that the Russian Government, at its most senior levels, authorized the interference in the 2016 Election. This is a sea change for how Russia and the US deal with each other. During the Cold War, “Moscow Rules” were at play in which there was an unwritten understanding that neither side would meddle in the internal politics of it adversary. Putin’s seeming willingness to deviate from this principle has exposed a higher appetite for risk and a greater lack of political sophistication than I originally believed. It also demonstrates that Russia is seeking to challenge many of the geopolitical gains after the end of the Cold War, most notably the expansion of NATO and the EU and how much Putin wishes to undermine the general standing of democracy in the global order.

The recent Trump-Putin meeting at the G-20 was the first face-to-face opportunity for Trump to press the point of a mutual agreement not to use our cyber capabilities in each other’s internal elections. Despite Putin’s denials on intervening in the 2016 elections, it is unlikely that he missed the core of the message. Now we will have to wait to see how he responds. Russia’s continued cyber-attacks against Ukraine are providing a clear proving ground for their developing capabilities. We are on the doorstep of a Cyber Cold War that has manifold dimensions. Hopefully, the personal relationship established at the G-20 meeting will produce materially beneficial results in this regard.

Global Dynamics: More Status Quo that Upheaval
Prognostications of waning U.S. influence in the world are far overblown, including the description of the G-20 as being 19+1. While Trump may be disliked and even distrusted in Europe and parts of Asia, don’t expect European or Asian nations to rush into the embrace of a dominant Germany or China any time soon. Moreover, while Trump may make his point too crudely, it has been past time to shake the cobwebs off the NATO alliance. As I have said before, Europe will bend to accommodate Trump, and the historic alliance won’t break.

2% growth will remain the trend line for the U.S. economy in 2017. Despite global consternation over Trump’s foreign and trade policies, global investors continue to see the United States as a good bet as compared to many other markets. I don’t see this changing in the near term, no matter how low Trump’s approval ratings might sink. The World Bank continues to forecast a modest uptick in global growth while warning of global protectionist impulses.

Look for Trump to move forward with his intention to renegotiate the North America Free Trade Agreement (NAFTA) and to continue to press China hard over trade, although seasoned trade negotiators operating behind the scenes will search for every opportunity to implement a measured approach to a trade deal. For example, the preliminary deal on sugar between the United States and Mexico, which will help both sides avoid high tariffs, can be seen as a positive sign ahead of NAFTA talks. Trade in goods and services between the United States and Mexico was estimated at $579.7 billion in 2016 – so there is a lot at stake here.

A slowdown in China (or a trade war) would of course impact global markets, especially the commodity producing countries that have fueled China’s growth. In order to manage China’s fundamental economic fragility and ensure political stability, watch for further consolidation of power by Xi Jinping ahead of the impending Party Conference later this year. Xi has taken notes from Putin and is placing allies across China’s entire political, financial and economic infrastructure.

Oil prices have recently slid to a nine-month low due to oversupply in the market from OPEC members like Libya, Nigeria, and Iraq and an excess of supply from the United States. We could be looking at oil prices of $40 a barrel or even the mid-$30s in the near term. Political instability in countries heavily dependent on oil revenues such as Russia, Saudi Arabia, or Mexico could be the result. Look no further than Venezuela to see a prime example of a country on the verge of economic and political collapse. Still, don’t expect President Nicolas Maduro to resign willingly or for the military to step in just yet: Venezuela will continue to limp along and protests will subside as ordinary Venezuelans go back to the business of everyday survival.

Though Iranian President Rouhani’s reelection will provide general political stability, Iran will be reeling for a while from its recent domestic ISIS attack, which will fan the flames of sectarian tensions within Iran and across the entire region. And, we should expect even less restraint from the Iran-Russia-Syrian coalition in Syria as a result. Turkey’s cooperation has never been more tenuous since we decided to directly arm the Kurds. Turkey may well relax its cooperation on fighting ISIS, and will be harder to deal with going forward. We should expect the unexpected there.

The sporadic terror attacks in Europe will continue. It’s the inevitable cost of squeezing ISIS out of its territory in Iraq and Syria, and the flow of Muslim refugees into Europe. In response to waning strength, terrorist organizations have decentralized their efforts, motivating and recruiting supporters to carry out attacks in their own backyard. Expect to see more low-tech truck, small arms, automatic gun, and knife attacks. Police and security forces are improving their anti-terrorism capabilities quickly, but still lag behind in developing a more rigorous threat monitoring capability to stem the threat.

The U.S. will not be immune from terrorist attacks, either, including conceivably a spectacular terrorism event, as we continue to keep the heat on ISIS, al-Qaeda and their affiliates. It is hard to imagine that we will not see another incident soon. Terrorist attacks here and abroad probably will strengthen the Trump Administration’s hand, given the probable forceful response to them.

North Korea
North Korea will continue its saber rattling until the Trump Administration finds a way to engage it directly. “Left of launch” and other countermeasures are an insufficient deterrent, and China cannot be relied on to reign in Pyongyang on its own. Progress can best be made through the resumption of six-party talks, which would have the positive effect of bolstering the new Moon government in Seoul as well. But, there doesn’t seem to be much movement in this direction now. So, saber rattling will continue in the months ahead.

The Summer will be no less turbulent politically than the previous quarter. If you or your firm would like individualized consultation or information, please contact Jack Devine at The Arkin Group.

“North Korea Will Be Producing 8-10 Nukes A Year” Jack Devine on Bloomberg Markets AM, March 2017

In an interview with Bloomberg Markets AM with Pimm Fox and Lisa Abramowicz on March 28, 2017, TAG President Jack Devine talks about his Spring 2017 Forecast for global risks including North Korea and its nuclear program.

Jack Devine: North Korea Will Be Producing 8-10 Nukes A Year

Jack’s Spring Forecast, March 2017

TAG President Jack Devine provides his Spring Forecast, including his predictions for the Trump administration, U.S. foreign policy, threats to national security such as North Korea and Iran, and key issues related to trade, health care, oil, and ISIS.

Spring 2017 Forecast

As anticipated, Trump is controlling the political agenda at home and abroad. It is no surprise that he continues to tweet, nor that the media and political world are still having great trouble dealing with his unorthodox approach to presidential politics. What we haven’t seen yet is any sign of self-discipline which would take the edge off his populist approach in dealing with the electorate. If this doesn’t change, Trump should expect to get burnt regularly by his open-ended use of Twitter, and face a commensurate drop in popularity ratings. Over time, this will compel him to moderate his tweets, especially those that have a direct impact on national security matters.

In the meantime, the media pundits will remain in high dudgeon. The growing frustration with the lack of objectivity across the political spectrum and the press, as well as a heightened skepticism about what is news and what is “fake news,” will gradually push Americans to tune out the perpetual partisan thunder. Already political fatigue is setting in, and a “Spring Break” is needed to unwind from the election and to focus on other less politicized national and international issues. Unfortunately, it is hard to see this resetting this spring.

Reinstate Moscow Rules
The recent political storm about the Trump team’s alleged collusion with the Russians in the U.S. political process, and the countervailing accusation that Obama tapped the Trump campaign for political reasons, will produce in the end goose eggs on both sides. With more smoke than fire on these alleged conspiracies, and no prosecutions or lasting political benefits flowing from them, the public will be left scratching its head and asking why so much time was wasted on these issues, instead of tackling the more serious geopolitical and economic issues America is really confronting. This doesn’t mean there isn’t a very serious problem with Russian hacking. The use of cyber tools to penetrate the military, political and economic infrastructure of potential adversaries is universal. What is new in the case of the Russians is a violation of the “Moscow Rules;” namely, using these breaches to directly influence internal political elections. This is a potentially dangerous game-changer that has to be walked back behind closed doors in Moscow and Washington. Hopefully, this is being done.

Because of the FBI investigation and the overall dust-up about Russia, Trump’s plans for a reset with Putin are going nowhere fast.

Foreign Policy Team Will Steady
The good news for Americans unsettled by the divisive 2016 presidential election and a tumultuous transition is that we have likely seen the low watermark of the Trump Administration’s management of national security issues. No doubt there will be periodic snafus on specific issues, but the longer arc of government will become better organized and focused as the pragmatists take charge at the NSC, State, Defense and the Intelligence Community. As anticipated, the internal struggle between the ideologues and pragmatists will continue for months to come, but the early departure of NSC Director Flynn has put the wind at the pragmatists’ back. Also, as Trump’s team gets its sea-legs and begins to line up with the career professionals within the respective departments and agencies, the White House will become more grounded on the key national security issues. Also, through the inevitable osmosis process of continuous briefings, Trump will become more knowledgeable and less prone to substantive slip-ups. This is a process that all presidents experience, whether they like it or not.

Despite the many global problems confronting the Administration, there are relatively limited parameters within which it will be able to work. This will be particularly true in our dealings with Russian aggression in Ukraine and Crimea, Chinese military expansion in the South China Sea and ISIS-driven terrorism. For the most part, the policy will likely reflect a continuation of the post-WWII “containment strategy” which was designed primarily to keep in check our adversaries. Whether it is robust or soft containment remains to be seen, but it is a good bet that on many issues Trump’s foreign policy will retain the same general outline as his predecessors. It will be hard to embark on a genuine game-changing strategy, with the exception of Iran and North Korea, where the Administration may be forced to act boldly despite an inclination not to do so.

North Korea Will Remain Intractable
North Korea may be the toughest national security issue that the Trump administration will have to face this year. The nuclear genie is out of the bottle in North Korea, and it will be extraordinarily difficult to get Chairman Kim Jong-un to cease and desist from exploiting it to the fullest. The “strategic patience” strategy we have pursued over the past several years has had no impact. North Korea already has over 20 nuclear weapons in its arsenal, and is fairly quickly developing a ballistic missile capability to deliver these weapons against our allies, particularly South Korean and Japan. And, in the next five years, if not stopped, these missiles will be able to reach the continental U.S.

Many policymakers and Asia experts believe China is the best pressure point on North Korea. While that may be true in the abstract, we definitely should not count on China, especially in light of its response to the March 5, 2017 firing of four missiles into the Sea of Japan. Instead of showing outrage and calling North Korea on the carpet, the Chinese Government lashed out at the U.S. and South Korea. It blatantly criticized the U.S. decision to move forward with installing the anti-ballistic missile defense system (THAAD) in South Korea and has put increased economic pressure on South Korea to reject THAAD. Even if China weighs in to help, the U.S. needs to keep hardening our military position in the region, working existing diplomatic channels, maximizing economic sanctions on North Korea, acting covertly to undermine North Korea’s nuclear program and even consider positioning tactical nuclear weapons in South Korea. The threat of tactical nuclear weapons in South Korea may be one way that China can be brought around to support us on this existential threat. But, it will take more President Xi visits to Mar-a-Lago and Secretary of State Tillerson trips to Beijing to do it.

Iran Heading Toward Treacherous Waters
Running nip and tuck for the top thorny issue for Trump on national security will be the nuclear deal with Iran. Trump and the Republicans will try to modify the agreement, and in the process apply more sanctions. Iranian internal politics will not allow a rewrite of the deal or significantly increased sanctions. It is very likely they will feel compelled to tear up the agreement and press ahead with the development of nuclear weapons. The big question: Now what? We certainly can increase sanctions on Iran and squeeze its economy hard, but this won’t lead to a regime change or a step back in its nuclear policy. The Europeans will strongly resist an increase in sanctions, but it’s a 50-50 bet that in the end they may sign up in solidarity, and to avoid triggering negative economic consequences for themselves. Hanging in the balance is the reelection bid of “moderate” President Hassan Rouhani in Iran’s May election, which is staked in large part on economic benefits from the nuclear deal. If Trump follows through on further sanctions and challenging the agreement, realistically we are back to the drawing board with covert action programs and war planning as our only options. Not a good place to be.

Going It Alone on Trade
Notwithstanding these national security issues, arguably the biggest Trump international initiative to watch in the months ahead is the coming policy changes on trade, which will not only have major consequences on the economy, but also on our international relationships. The two hottest points of friction will be Mexico and China. While the NAFTA agreement won’t be abrogated, it will be revised enough to sour the relationship with Mexico and uncap nationalistic sentiments which would be economically unhealthy and unproductive for both sides of the Rio Grande. It certainly will compel all of Mexico’s likely presidential candidates in 2018 to run on an outspoken nationalistic platform with anti-American undertones. Look out for the potential rise of leftist leader Andrés Manuel Lopez Obrador as a consequence. It will take great diplomatic and political finesse by all to avoid this problem. Much like Mexico, future trade policies will rankle the Chinese, put a chill on the overall relationship and nudge Chinese nationalism upward. Now that the United States has officially pulled out of the Trans Pacific Partnership (TPP), China already has increased its efforts to lead on trade initiatives and negotiate multilateral agreements that leave the U.S. out. This will be especially tricky considering that China’s economy is contracting more than admitted publicly. As with Mexico, great diplomacy and artful maneuvering will be required to keep the relationship on a positive track. Hold on tight to your seat on trade issues.

Health Care, Oil and ISIS
Democrats are still reeling and not coming to terms with the long-range implications of their defeat last November. However, the Republican plan to reform Obamacare gives the Democrats a good whipping boy to keep the fight fair. Many a politician has broken his/her pick on health care, and House Speaker Paul Ryan and President Trump won’t be an exception. It’s hard to see how the Republicans can craft a plan which doesn’t cost them part of their constituency. The struggle over health care also will likely push tax reform and infrastructure spending further down the road on the congressional agenda. And, at least in the short term, it will give the Democrats a powerful issue to stake out a clear position and possibly refocus itself in the process. It will also reveal more clearly Trump’s relationship with Congress going forward, which is muddled at this point. Aches and pain lie ahead for the Republicans on this issue.

Keep an eye on oil prices. It is unlikely prices will move much above $55 for the foreseeable future due to the dramatic improvement in recent years in U.S. energy capabilities and technology, and because of China’s shrinking economy over the long run. Recent suggestions that the Chinese economy is improving will be short-lived. On the geopolitical front, low oil prices will have a particularly significant political and economic impact on Saudi Arabia and Russia. They both need oil prices above $50/barrel to meet their budget minimum requirements and to keep a lid on political dissent. If the prices fall below $50 a barrel for a protracted period, you can count on internal tensions in Russia and Saudi Arabia. Continued low prices will also have a worsening impact on Venezuela’s instability. Venezuela is already in deep economic and political turmoil and this could become an even more urgent crisis for the hemisphere.

ISIS will continue to weaken in the months ahead. But, remain alert for a terrorist event at home or in Europe designed in desperation to attract new recruits to the ISIS cause.

If you or your firm would like individualized consultation or information, please contact Jack Devine at The Arkin Group.