Strategic UPDATE 

On 25 July 2022, Taiwan commenced its semi-annual military drill simulating a Chinese invasion of its shores. Tensions across the Taiwan Strait are high after it was leaked that the United States (U.S.) House Speaker Nancy Pelosi plans on traveling to Taiwan in August. Given Russia's invasion of Ukraine, the threat to Taiwan posed by China no longer seems so distant and low probability. A conflict over Taiwan now represents the highest impact downside risk to businesses operating in Asia and to the global economy writ large.

Beijing considers self-ruled Taiwan to be a renegade province and has always maintained its right to use force to reunify. China has historical, economic, and geostrategic imperatives for controlling Taiwan. After witnessing China’s crushing of democracy in Hong Kong, reneging on its “one country, two systems” policy, the Taiwanese people’s desire to unify with the mainland has reached all-time lows – a mere two percent in 2022 polling. The prospects of peaceful unification are all but dead.

China has made generating the military capability to invade Taiwan a decade-long focus, producing some 200 advanced J-16 fighter jets and J-20 stealth jets and building a naval fleet larger than the American Navy in the greatest military build-up since WWII. In lockstep, Beijing has also produced robust anti-access/area denial capabilities designed to prevent Washington from being able to come to Taipei’s defense.

Counter to popular belief, China’s window for action is closing for demographic, economic, and military reasons. In addition, its neighbors have increased their military spending, and some have begun to band together in forums such as the Quadrilateral Security Dialogue (U.S., India, Japan, Australia) and AUKUS (Australia, United Kingdom, U.S.). Estimates from both Taiwan and the U.S. indicate that China may make its move before 2027 when it celebrates the 100th anniversary of the founding of China’s People’s Liberation Army (PLA). Though circumstances may accelerate or decelerate Beijing’s plans.

Possible Flashpoint

The proposed trip by Speaker Pelosi would be the first trip by a U.S. official of her rank in 25 years against a very different geopolitical backdrop than that of 1997. The potential Pelosi trip puts the U.S. in a dangerous catch-22 situation vis a vis the Chinese Communist Party. The trip comes as President Xi is preparing to break conventions and seek a third term at the ruling Communist Party's 20th congress this fall, and the American mid-term election season heats up.

• Abandoning the trip would be seen as cowing to China which would help inculcate the dominant sentiment in Beijing that America is in decline and losing its willingness to use its hard power, further endangering Taiwan. Domestically, it would also offer ammunition to President Biden’s opponents who would like to portray him (and his party by extension) as weak on China ahead of the mid-term elections.
  
  
• Going ahead with the trip, conversely, would dramatically increase cross-strait tensions. The Chinese Ministry of Defense and several other party officials have subsequently issued threats. The U.S. military is taking these seriously with the navy dispatching an aircraft carrier strike group from Singapore to strengthen its force posture and deter any Chinese action ahead of the visit. 

Should the trip go ahead there will be pressure on all sides to demonstrate resolve without taking unnecessary escalatory risks. Yet there is always the potential for miscalculation and human error.

Strategic UPDATE 

After Russian forces secured Lysychansk—marking the completion of its capture of the Luhansk oblast—Russia paused from 04 July to 16 July to regroup and reconstitute its forces. The slow-moving offensive in Donetsk has resumed, yet the Donbas (Luhansk and Donetsk oblasts) is no longer the center of gravity of the conflict.

• On 20 July, Russian Foreign Minister Sergei Lavrov declared that the geographical objectives of Russia have changed from just the Donbas to now include Kherson and Zaporizhia oblasts.
• Since the end of June, Ukraine has deployed between 8-12 U.S.-made High Mobility Artillery Rocket Systems (HIMARS) which have been incredibly effective on the battlefield despite their low number. Ukraine now has the ability to target Russian ammunition, supplies, and command and control centers well behind the front lines. This development has forced the Russians to disperse/decentralize their logistics depots further slowing down the Russian offensive in the east and making it more difficult for Russian defenders in the south to obtain supplies. 
• On 19 and 20 July, Ukraine targeted the Antonovskiy Bridge on the Dnipro River in Kherson oblast. The bridge is one of two key river crossing points, making it a vital supply line for Russian forces in Kherson, Mykolaiv, and Kryvyi Rih regions. Ukrainian forces have been softening Russian positions in Kherson for over a month attacking both frontline defenses as well as command and control centers and logistical nodes. It is possible that the efforts to prevent Russian resupplying of its forces on the west bank of the Dnipro mean that Ukraine will escalate its counter-offensive in the south in the coming days and weeks.
• On 13 July, the European Commission revised its guidance on Russian sanctions, carving out an exception for goods transported from Russia to the Russian exclave of Kaliningrad via Lithuania by rail. Almost a month earlier, Lithuania began to implement EU sanctions on Russia effectively cutting off Kaliningrad from Russia. The solving of this impasse greatly reduces tensions between Russia and the Baltic states, which stood to bear the brunt of Russian intimidation tactics. 

Situation UPDATE 

On 24 June, the United States Supreme Court (SCOTUS) ruled on the Dobbs v. Jackson Women’s Health Organization case, siding with Dobbs (the state of Mississippi). In doing so, SCOTUS overturned Roe v. Wade (federally guaranteed constitutional right to abortion access) and placed the issue in the hands of state legislatures. The ruling on this highly polarizing socio-political issue comes ahead of the November mid-term elections and will be leveraged politically. Protests by pro-choice activists and counter-protesters are likely to occur in major cities across the U.S.

While these protests will likely remain peaceful, some could turn violent as bad actors—lone wolves and domestic extremist groups—seek to take advantage of the situation. There is an increased risk of vandalism and violence against churches, abortion facilities, and pharmaceutical sites. 

Known planned protests for later today include:

• Austin, TX: Outside the Federal Courthouse Plaza located at 501 West Fifth Street
• New York City, NY: Washington Square Park and Union Square
• Washington, D.C.: Supreme Court
• Over the weekend, protests in the following cities are already planned and more are expected: Atlanta, GA; Boston, MA; Chicago, IL; Houston, TX; Los Angeles, CA; New York, NY; Philadelphia, PA; San Francisco, CA; and Seattle, WA.
• Additional protests in other cities across the country are likely. 

Strategic UPDATE 

On 18 June, Lithuania began to impose a ground transit ban on EU-sanctioned Russian goods (steel, wood, coal, oil products, heavy machinery, luxury goods, amongst others) coming from Belarus to Kaliningrad, effectively cutting off the exclave from the rest of Russia. On 21 June, Moscow warned that Lithuania will face consequences "in the near future" unless it allows the trains to pass. The only remaining transit route now is by way of the sea through international waters since Russian planes are banned from EU airspace. Russia has few meaningful response options that both fall short of triggering an escalation with NATO and alleviating the strain on its Baltic Oblast.

• Kaliningrad–which is located between Lithuania and Poland along the Baltic sea–is the home of Russia’s Baltic fleet and around one million people.
• As a preliminary show of force, Russia is conducting provocative maneuvers on Estonia's border, violating the NATO member's airspace with helicopters and simulating missile attacks. 

• The most likely responses from Russia will include any or all of the following:
  • Continued aggressive rhetoric
  • Military drills along the borders of the Baltic states
  • Cyber attacks on the public and private sectors in the Baltics and even EU at large
  • Harassment of commercial vessels in the international waters of the Baltic sea
• Ultimately, Russia will likely opt to supply Kaliningrad by sea as it pushes for a settlement with the EU to resume ground transport of sanctioned goods and oil.
• Meanwhile, the slow tempo battle for the Donbas continues in Ukraine with both sides’ capabilities and manpower continuing to be depleted. Though Russia's capture of Luhansk Oblast looks increasingly likely.

Strategic UPDATE 

Russian forces continue to make incremental progress in the east under the cover of overwhelming artillery barrages. The main fighting is concentrated around the cities of Severodonetsk and Lysychansk in Ukraine’s eastern Luhansk oblast. Overall, the war has slowed and morphed into an artillery slogfest in the Donbas as Russia has changed its tactics. It is unclear how much longer Ukrainian forces will hold their positions before retreating in Luhansk.

• Per the Kremlin, Russian and separatist forces now control 97% of Luhansk oblast, one of the two regions that comprise the Donbas—the current main objective of Russia's campaign. From a public relations point of view, Moscow will undoubtedly claim a victory that will bring them closer to capturing the entire Luhansk oblast. 
• Over the last week, the U.S. and UK have announced that they will provide Ukraine with M142 and M270 multiple-launch rocket systems (MLRS). These advanced rocket systems will give the Ukrainian forces the ability to accurately attack Russian forces and artillery far behind their lines (50mi/80km range). When deployed in-theater, these systems will double the current effective range of Ukraine's artillery corps. If more than a symbolic number is given, these weapons could be very helpful for Ukrainian counterattacks and to destroy Russian artillery.
• On 31 May, President Biden penned a New York Times op-ed to help offset the escalation risk associated with providing Ukraine with long-range artillery systems: "So long as the United States or our allies are not attacked, we will not be directly engaged in this conflict, either by sending American troops to fight in Ukraine or by attacking Russian forces. We are not encouraging or enabling Ukraine to strike beyond its borders..."
• While Ukrainian Forces have already attacked positions in Russia near the border using Soviet-era weapons platforms, a deliberate or accidental usage of the U.S. or UK-supplied rockets against targets on Russian soil would escalate the situation, as Moscow has repeatedly issued threats regarding this scenario that will be difficult to back down from.
• Additionally, multiple countries have re-opened embassies in Kyiv as risks from the conflict shift east. These include the U.S., India, Sweden, South Korea, and others. 

Strategic UPDATE 

Few developments occurred along the front in Ukraine as officials inside of Russia again downsized ambitious goals to push entrenched Ukrainian forces out of the Donbas. Russian leadership has begun to justify long-term conflict and occupation in public statements, potentially preparing for some degree of forced mobilization to replace exhausted forces.

• Officials including Defense Minister Sergei Shoigu have increasingly openly admitted that the Russian offensive in Ukraine is moving slower than anticipated. Foreign Intelligence Service Director Sergey Naryshkin justified the slow pace by affirming that the goal of the operation is to ensure “Nazism” is “100% eradicated”, indicating that Russia is setting conditions for a protracted war in Ukraine to justify slower and more measured advances.
• Putin signed legislation on 25 May to simplify obtaining Russian citizenship for those in Russian-controlled territory in Ukraine's southern Kherson and Zaporizhia oblasts. Known as ‘passportization’, the process mirrors steps Russia took in the aftermath of the Russo-Georgian war in 2008 and signals that Russia is not considering voluntarily returning conquered territory to Ukraine.

 

Strategic UPDATE 

Russia has stepped up missile strikes against Ukraine’s port city of Odesa in the west as the Ukrainian counteroffensive near Kharkiv successfully pushed Russian forces back to the border in the northeast. Elsewhere along the front, Russian troops remained mired in a stalemate, unable to encircle the Ukrainian defense.

Meanwhile, Russia’s Victory Day celebration on 09 May did not turn out to mark a pivotal moment for Russia’s war against Ukraine. Contrary to expectations, Russian president Putin’s annual speech:

• Did not make an official declaration of war or announce a general mobilization of the Russian population to assist in the war effort.
• Avoided details about Russia’s progress in Ukraine and did not acknowledge Russia’s victories in Kherson or Mariupol.

However, Putin’s speech—while covering familiar themes—also did not signal interest in a short-term end to the war, nor did it exclude the possibility of general mobilization in the near future. Instead, several points sought to increase volunteers in the military and inflate the threat posed by Ukraine:

• Putin announced a presidential decree to provide significant government support to military families. This will reduce reservations among young Russian men with families to join the war.
• Direct connections between veterans of the Great Patriotic War (World War II) and current Russian soldiers elevated volunteers in Russia’s war against Ukraine to hero status. Further, Putin emphasized unity and loyalty to Russia as the “highest meaning of life” for true Russians, increasing social pressure for young men of military age to enlist.

Outside of Russia, US intelligence alleged on 10 May that Putin is planning for a long war, hoping to outlast US and European support for Ukraine. In this scenario, martial law in Russia to support the war effort is likely given the current degradation of Russia’s standing force.

Still, Russia’s existing logistics issues would be further complicated by expanding its force size—a difficult task that cannot be accomplished in the short-term. Training new troops would take a minimum of nine months and reducing training time to push infantry out faster would be catastrophic against a well-trained Ukrainian defense.

Strategic UPDATE 

Russian president Putin is expected to make a major announcement on 09 May to mark Russia’s annual celebration of Victory Day. As the commemoration of Russia’s victory over Nazi Germany in 1945, Victory Day 2022 is certain to acknowledge Russia’s “denazification” of Ukraine.

Some analysts fear that Putin will use the moment to formally declare war on Ukraine. This would allow Russia to issue a mass mobilization of forces to overwhelm Ukraine’s defenses with fresh soldiers. However, there are several reasons why this is unlikely to occur:

• Existing logistics and organizational issues in Ukraine would be increased by an influx of new troops that would normally receive months of training.
• Russia’s existing stockpiles of munitions are running low as the invasion enters its third month of operation. Russia cannot reliably both outfit a larger force and commit to a sustained offensive that allows it to hold captured territory.
• Mass conscription would be highly unpopular among the general Russian population, which has so far not been directly affected by events in Ukraine. This could endanger Putin’s historically secure political position at home.
• A formal declaration of war is opposite to Russia’s historic Victory Day celebrations—which are celebrations of peace and victory after war—and would not signal strength to the Russian people. This too could endanger Putin’s domestic appeal, which he is unlikely to risk.

On the contrary, Putin is more likely to announce victory in the second phase of Russia’s “special operation” regardless of the situation on the ground. Russia will signal its intention to defend captured territory from falling back into the hands of “fascists” while seeking a satisfactory, if temporary, end to Ukrainian counter-offensives.

• Russian forces have succeeded at capturing Kherson and Mariupol despite fierce resistance, allowing Russian forces in south Ukraine to establish a land corridor to Crimea.
• Russian forces are making slow but steady progress toward capturing the Donetsk Oblast that comprises the territory claimed by the pro-Russian Luhansk and Donetsk People’s Republics of eastern Ukraine.
• Putin can deflect attention to alleged Western aggression toward Transnistria, where Russian state news sources allege a Moldovan-Romanian alliance, backed by U.S. advisors, is conspiring to reclaim territory occupied by pro-Russian forces.
• Putin can claim that captured territory has been “denazified” and that the remainder of Ukraine will be close behind.
• Putin may announce intent to recognize referendums that will accede Kherson and other occupied territory in the east and south to Russia. Russia is already consolidating control of Kherson, beginning with a transition to the Russian ruble on 01 May and followed by rerouting local internet traffic through Russian-controlled infrastructure the day after.

SITUATION UPDATE - WEEK 9

The newest phase in Russia’s invasion of Ukraine continues to take shape as Russian troops south of Izyum made slow but steady progress toward Slovyansk. Elsewhere, explosions rocked Transnistria—a pro-Russian breakaway state within Moldova—raising fears of a false flag attack on Ukrainian territory originating from the west. In the south, Russian forces defended captured territory from Ukrainian counteroffensives with intense artillery fire.

Tactical Update

• Russian forces likely led the false flag attacks in Transnistria on 25-27 April. Russia may be seeking to lay the foundation for Transnistria to join the war to support Russian troops with reserve forces or as a platform to launch attacks on Ukrainian territory. Transnistria is unlikely to develop into a significant new front in the conflict, but could destabilize Moldova, putting additional pressure on NATO to divert aid from Ukraine. Alternatively, Transnistria could allow a Russian force to stage limited attacks on the Ukrainian city of Odesa to cause panic and potentially benefit Russian activities in southern Ukraine.
• Russian airstrikes continue to target Ukraine’s transport infrastructure to slow down foreign military aid to the front lines in south and eastern Ukraine. Recent strikes targeted a railway bridge connecting neighboring Romania to Odesa and railway facilities in Ukraine’s central Vinnytsia region. As many transport hubs are also passenger hubs, danger to passenger travel remains extreme throughout the country despite ground fighting becoming localized to the south and east.
• The United States announced an extra $332 million of military aid to Ukraine, bringing total U.S. security financing provided to Ukraine since the start of the invasion to more than $3.7 billion. The previous military aid package, which was announced on 14 April, included 18 American 155mm howitzer cannons and anti-artillery radars for the first time. U.S. officials have likewise confirmed that Ukrainian troops are being trained to use the new equipment in an undisclosed location outside of Ukraine.
• Improvements to Ukraine’s artillery capabilities are expected to have a significant impact on the newest phase of the invasion due to Russia’s strategic shift away from assaulting urban centers such as Kyiv toward capturing the wide-open plains of the Donbas.

SITUATION UPDATE - WEEK 8

Russian missiles targeted warehouses and railways in Lviv on 18 April to stall arms shipments from the West as the invasion enters its newest phase. Russia’s offensive is now centered on capturing the Donbas—the region in east Ukraine claimed by pro-Russian separatist republics—in time for Russia’s national Victory Day holiday on May 9. While artillery strikes south of Izyum have attempted to pave the way for Russian ground troops, entrenched Ukrainian forces in the region and poor coordination have so far slowed Russia’s advance.

Tactical Update

• Russian forces are capturing villages as they move south from Izyum toward the town of Slovyansk. Ukrainian forces are fortified in Slovyansk and the fight to take the city is expected to be intense.
• The root causes of poor coordination and low morale affecting Russian operations continue to impact Russian forces, suggesting that this newest offensive will be plagued with the same operational issues that impeded Russia’s offensives around Kyiv.
• On 18 April, Russian missiles struck targets in Lviv in the deadliest strike on west Ukraine since the start of the invasion. Russia cautioned in March that weapons shipments would present legitimate military targets, extending the threat of war far beyond the front lines in the east.
• Czech defense companies will repair Ukrainian military equipment that has been damaged or needs to be serviced in the newest announcement of defense collaboration between a NATO country and Ukraine. The risk that Russia will target infrastructure sending repaired Ukrainian military equipment back into the war and prompt a response from Czech officials is extreme considering the Russian military’s recent strikes against locations of suspected weapons shipments in western Ukraine.