TAG President Jack Devine’s Summer 2019 Intelligence Report includes his current assessment of domestic politics, Iran, North Korea’s missile tests, China, Putin’s use of power to stay in control in Russia, the rise in risk of terrorist attacks in India, the Brexit situation, the deteriorating relationship with Turkey, and Mexico.

Domestic Politics

When Congress returns from its summer recess and election season begins in earnest, President Trump will view virtually all political, economic, military and foreign policy issues almost exclusively through the lens of the 2020 Presidential Elections. While there is too much time between now and election day to predict the outcome with certitude, the Democrats are likely to put forth a candidate with a very pointed progressive agenda, and President Trump will respond with a rigorous attack against that agenda and its candidate. Starting in the new year, we can expect that Trump will use in an unprecedented fashion the full power of the presidency to try to shape the economy and foreign affairs in his favor. If the economy remains strong, the electoral college outcome will be close, with most states almost predestined to replicate their 2016 outcome. Currently, a recession is further off in the future than media commentary suggests. The three states most likely to make the difference in the electoral outcome are Michigan, Wisconsin and Pennsylvania. For those watching the early returns, how Pennsylvania goes at the polls, so will the Presidency! It is the bellwether state this time around, and no doubt will be hotly contested.

On the foreign policy front, China and the United States will continue to arm wrestle over trade, and relations with Russia will remain largely unchanged. There won’t be a major breakthrough on the North Korean nuclear front, and we won’t go to war with Iran, despite a lot of expected posturing and activity, including by proxies in the region. While the European Union could well see Britain leave in October, either way the outcome will be less stark than many observers suggest. There will be plenty of flak around all these issues, including the continued global trend of eroding support for democracy. However, in the end they are unlikely to have a significant impact on the US election.

Iran

The current US posture toward Iran is designed to exert the greatest amount of financial pressure and diplomatic isolation to undermine the country’s nuclear ambitions and, in all likelihood, to force regime change. The result is an ever more desperate Tehran, who is abandoning its wait-and-see policy with regard to the nuclear agreement and instead has deliberately breached agreed enrichment limits and escalated its saber-rattling in the Strait of Hormuz. With a quick series of alarming incidents from seized tankers to burning pipelines and downed drones, there is an ever-increasing risk of direct conflict with Iran and its proxies in the region. Neither Trump nor Khamenei seems predisposed to temper their policies and rhetoric, and we shouldn’t expect help from Israel, Saudi Arabia, or the UAE, whose interests seem aligned to marginalize Iran as much as possible, eclipsing other areas of discord. What’s more, it is doubtful the Europeans will be able to make meaningful progress in ameliorating the issue. Looking forward, this means that for the foreseeable future a military conflict with Iran, especially in the Persian Gulf remains a real, but unlikely, possibility.

North Korea

Kim Jong-un has brashly followed his brief meeting with President Trump in the demilitarized zone with a series of missile tests – the latest on 6 August 2019. The tests were a protest of joint US-South Korean military exercises, and they indicate that Kim will continue to push the envelope to advance his military capabilities as much as possible, short of provoking conflict with the US. What’s more troubling is that the security environment in the Korean Peninsula has degraded significantly because of a flare in a historical spat between Seoul and Tokyo over WWII reparations. The resulting trade war between the two countries and Seoul’s decision today to withdraw from a 2016 intelligence-sharing agreement with Japan, provides opportunities for China and Russia to exploit the perceived rift within a longstanding security pact between these countries and the US. Further, these tensions undermine any US leverage to move forward with a North Korean nuclear deal that must include security guarantees for both Seoul and Tokyo.

China

Peaceful protests in response to Hong Kong Chief Executive Carrie Lam’s extradition initiative have grown into a wider, and at times more defiant, movement for a return to the “one country, two systems” principle that formed the basis of Britain’s exit from Hong Kong. Beijing has ratcheted up the nationalist rhetoric, comparing the protesters to terrorists, and is staging troops near the border, clearly hoping this will intimidate protesters into vacating the streets. At the same time, Beijing is exerting economic pressure on vital Hong Kong businesses like Cathay Pacific to bring Hong Kong employees back into line. While Beijing wants to avoid direct intervention and the inevitable bloodshed and international black eye that would follow, China won’t let the situation fester indefinitely. Once the dust settles, it is highly likely that Hong Kong’s civil liberties will be more restrained going forward. But Beijing must tread carefully in its response. A harsh crackdown on Hong Kong could trigger severe capital flight, crippling the island’s capacity to serve as an international financial hub and source of offshore financing for Chinese companies, and derail any progress toward a trade deal with the US.

Russia

As Russia’s economy continues to falter and blatant corruption continues unabated, Putin appears more resolved than ever to stifle any sort of dissent and to quash any opposition. Protests denouncing the disqualification of scores of opposition candidates at the end of July were met with a very heavy hand, including the attack on opposition leader Alexei Navalny. Many Russia observers see this as part of an ongoing strategy to degrade the opposition in order to make it easier for Putin to stay in power when his fourth and supposedly last term is up in 2024. On the international stage, Russia appears uncowed by its domestic troubles. Following the United States withdrawal from the Intermediate-Range Nuclear Forces (INF) Treaty, Russia has said that any deployment of short and intermediate-range missile in Europe would trigger a deployment of Russian hypersonic nuclear missiles on ships or submarines near US territorial waters. Based on the mysterious incident on 8 August at a Russian missile testing facility, it appears that Russia is moving full speed ahead on its ambitions to develop a new and innovative arsenal. Without immediate efforts to construct a new international treaty, there are very few barriers to a new arms race.

Finally, if we are to take anything away from Special Counsel Mueller’s testimony, it is that Russia’s efforts to interfere in our political system continue unabated. Without a significant and resolved response from the US, Russia will persevere to our detriment.

India

In a surprise move, on 5 August Prime Minister Narendra Modi stripped Jammu and Kashmir of their seven-decade-old special constitutional status of autonomy. In so doing, Modi has fulfilled a long-standing Hindu nationalist goal and garnered widespread popular support for the move, but he has also further destabilized an already volatile region. To head off a likely uprising, Modi has placed the region on lock-down, cutting all communications, putting local politicians under house arrest and sending in thousands of security forces who have quelled protests with a heavy hand. Pakistan’s call for mediation has been rebuffed. In the short and medium term, the risk of terrorist attacks has increased throughout the whole of India, as has the possibility of armed conflict with Pakistan. In the longer term, Modi’s vision to “colonize” majority-Muslim Kashmir with ethnic Hindus raises the question of what Indian democracy will look like and suggests that volatility will remain for some time in Kashmir and possibly other areas of India, with minorities politically and socially marginalized.

Brexit

Anti-Brexit lawmakers will return from their holidays on 3 September, determined to stymie Downing Street’s autumn Brexit agenda. Labour leader Jeremy Corbyn plans to call a no-confidence vote against Prime Minister Boris Johnson who holds the slimmest of majorities, in order to form an interim government that will seek from the EU an extension of the 31 October deadline, and then call for elections and run on a platform of holding a new Brexit referendum. The minefields are many, starting with Corbyn’s own unpopularity with critical factions. For his part, Johnson plans to urgently lobby European leaders to renegotiate the withdrawal agreement, particularly the Irish backstop provision. He is unlikely to succeed. With Johnson holding fast to the 31 October deadline, a full break from the EU becomes more likely, although Johnson, like his predecessor, could well end up kicking the can down the road.

Turkey

What was once a difficult but stable relationship with Turkey has now badly deteriorated. Turkey’s recent acquisition of Russian surface-to-air missiles is alarming because in the past, pressure exerted by us and other NATO members would have caused Turkey to reconsider. However, President Erdogan-having fully consolidated power at home-seems less interested in pursuing democratically-minded agendas domestically and abroad and has his eye directed toward Russia and China. The country’s dwindling economy will ensure that Turkey doesn’t gain the regional prowess it craves. However, the US and other NATO members have hard decisions ahead on how to treat Turkey’s role in the alliance.

Mexico

Mexican President Andrés Manuel López Obrador continues to stoke fears in the Mexican business community, but he has maintained his high approval ratings among average Mexicans. López Obrador has also cleverly managed to appease President Trump with his decision to send Mexican troops to the southern border with Guatemala and with the “Remain in Mexico” plan to keep Central American migrants in Mexico as they await immigration proceedings in the United States. The United States and Mexico exchange approximately $671 million in goods and services every year. With the USMCA trade agreement not passing through the US Congress this year, López Obrador does not want to risk border closures, tariffs, or problems in Congress. The problem for López Obrador is that tensions with the Mexican people are likely to rise as the Central American asylum seekers waiting to get into the United States eventually start to compete for jobs and resources in a weakening Mexican economy.

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