Korean Exports Skyrocket Thanks to AI

Two Korean flags in front of a building

Korean exports are up roughly 70% year over year, surpassing $100 billion in a single month. So, what’s causing this extreme growth?

It’s all thanks to AI. Korea dominates the global market for advanced DRAM, accounting for ~90% of global high-end memory. As long as the globalized supply chain supporting the AI ecosystem holds, countries like Korea will continue to reap the benefits.

Between chip design, manufacturing, raw materials, packaging, and testing, there is a fragile international AI network that won’t last forever. And no single country can do all of this alone.

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Transcript

Hey everybody, Peter Zeihan here come to you from smoky, Colorado. We are at the 1st of July, and we just got good data out of the Koreans for their exports. And they set not just a record, but an insane record topped $100 billion for country with 150 million people in one month. And that is a 70% increase from just a year earlier. 

You heard that right, seven 0% increase. And really, almost all of the increase has to do with artificial intelligence, as everyone who’s not brain dead is aware, there is an AI boom going on around the world, most notably in the United States, China and Southeast Asia. And there are three big components that go into the hardware that makes AI work. 

The first, the most famous, the one that gets the most press time, is the graphics processing unit. These are high end chips that are typically etched with extreme ultraviolet technology comes out of a company called ASML that’s based out of the Netherlands. And most of these high end chips are fabricated in Taiwan. About 80% of global supply. 

I’d argue right now the balance is mostly the United States. This is where the happens. 

This is the processing that is the core of what makes a large language model. And AI models like Llms work. So number one. Number two, you’ve got something called Nand, Nand which is cold memory. And so when you’re not using your computer or your data center is not using whatever the memory is, things are stored in Nand even if the power is off, Nand will keep its memory. 

And you have a lot of that sitting on the board in the general vicinity of the GPU just to absorb things that are not an act of play. And then third, you’ve got something called Dram, Dram, dynamic random access memory. And this is the hot memory. And so as data is going back and forth and back and forth and back and forth from the GPUs to other things, it’s usually the Dram that holds it temporarily. 

And it can be in two forms. You have your independent Dram stacks off to the side, and you have something called high bandwidth memory, which is basically a stack of Dram right next to sometimes even attached to the GPU. Anyway, the Koreans don’t do much, if anything at all with the GPUs, and Nand is an old technology where they’ve discovered because it doesn’t generate heat, you can stack the chips on top of one another. 

And so it’s not particularly advanced. The Koreans do a lot of it, but that’s not the groundbreaking stuff. What the Koreans excel at is the Dram, the dynamic access memory, the the hot memory, and they produce about 90% of the world’s high end dram. So three things from this. Number one, if you want to dominate your own computer supply chain system GPUs, which is what the Biden administration of the Trump administration are obsessed about, or only one part of the process. 

Computing is a lot more complicated than rocket surgery, and there are thousands more pieces that go into it than in any other manufacturing sector. So I would say it’s a fool’s errand to try to concentrate it in your country. But if you’re going to, you have to throw a lot wider net that we have in so far. Number two, memory is every bit as important as GPUs and especially the architecture of the memory and integrating it with the GPUs. 

And this is something that Chinese can’t do and the Taiwanese can’t do and the Koreans can’t do. This is something the US already does. So I’d argue that from a value added point of view, the United States already dominates the part that’s most important designing the system. So the geometry of the chips actually does what we need it to do. 

Third, and most important, I think in the midterm is that the same technologies that I have identified over and over and over again, the silicon processing, the carpet processing, the EUV system itself, all of the logistics and the supply chains and the inputs and the testing and the packaging, all of these things that require 50 odd countries in order to get the GPUs also, for the most part, applies to the Dram. 

So we’re existing in this little window where the world is technologically advanced enough and integrated enough that we can get the designs out of the United States and the logistics managed by the United States, and the photographs managed by the Japanese, and the copper out of Chile, and the rare earths out of China and the silicon out of North Carolina, and the GPUs out of Taiwan and the Dram out of Korea. 

And all just works right now. But you lose even one of those pieces, and this all stops. So if you’re into AI or you like the Koreans, enjoy this moment. It’s a good moment. Build everything you can, because very soon that’s not going to work. And we’re going to have to take a decade or three off from AI and its sister technologies. 

And till such time as we can rebuild the bulk of the supply chain in a more geopolitically sustainable manner.

China No Longer Controls North Korea

Monument of hammers raised in North Korea

To simply call North Korea a Chinese puppet state doesn’t capture the complexity of that relationship. To fully understand it, we must look back at three generations of the Kim dynasty, the current partnerships with other powers, and Kim Jong Un’s aspirations.

However, the biggest takeaway from Xi’s meeting in Pyongyang is that North Korea is becoming more of a geopolitical wild card. China and the rest of the region must now deal with greater uncertainty from a nuclear power right at the doorstep.

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Transcript

Hey everybody. Peter Zeihan here, coming to you from Colorado. Today is the 8th of June. And the big news is that chairman, XI Jinping of the People’s Republic of China is in the Democratic People’s Republic of North Korea. Who summits. Fun stuff. Anyway, I thought it might be useful to give you the rundown of what’s brought us to this point and what the status of Chinese North Korean relations are, because it’s not what most people think. 

If you go back in time to the early Cold War years, we had a guy by the name of Kim IL sung who was kind of the grandfather, well, literally the grandfather of the current Kim who’s in charge, and Pyongyang. Anyway, Kim IL Sung is the guy who founded North Korea as a state. He fought the Japanese during World War two, had lots of gravitas, good military leader. 

But then he ran this hermit kingdom, as people like to call it, with a ideology called, which basically translates into self-reliance. And so while the entire world advanced into the industrial age, North Korea just kind of stalled, really famously. Pyongyang is really the only city in the country until recently that has even had electricity. And if you were an affiliate of the Kim dynasty, you got food. 

And if you weren’t, life kind of sucked. That continued on until the Cold War ended and when the Soviet Union collapsed. Kim IL sung realized the writing was on the wall, and that the Jewish ideology just wasn’t going to work in a world that was globalizing. Without the ongoing payments that came in from the Soviets. So, according to the best collective guesses of the world’s intelligence agencies, and by that I mean American, Japanese, Chinese, South Korean, British, French and others. 

Kim IL sung had invited himself to Seoul to meet with the then South Korean leader, Another Kim, and to talk about reunification in a practical sense, as the story goes. Within a couple of days, the generals who had fought with Kim IL sung back during World War Two killed him. And because they knew that in any version of a reunified Korea, their jobs would be gone. 

Because if you’re not fighting the South and the Army doesn’t need to be as big, and if the South and north and integrate, you don’t need as many generals. And the southern generals certainly had more military expertise with better equipment. So they off the guy. And that left Kim IL Sung sun, Kim Jong IL. He’s the crazy one. 

The one always looks like this. Yeah. Left him in charge and Kim Jong IL was best way to phrase this. Well, he was batshit crazy. He had been educated in North Korea, grew up drinking the Kool-Aid in the ideology, and didn’t really understand how the rest of the world worked. So he’s most infamous for leading a series of agricultural reforms that ended up triggering mass famine and killing 2 million people and gutting what little hydropower of the country had. 

And as the story goes, the generals who had offed his dad were like, oh shit, that’s totally not what we meant to happen. We’ve got to make sure that the next generation isn’t like this. So they sent the third generation of kids who were only now teenagers, out into the wider world to learn how the world actually works. 

And Kim Jong UN, who is the current leader, the son of Kim Jong IL and the grandson of Kim IL sung, was actually in Switzerland in middle school and high school. 

Any who Kim Jong IL, the crazy one, deliberately got bad medical care on the orders of the military and eventually died relatively young, which meant that Kim Jong un, at the tender age of I think it was 23 or 26 at the time, got recalled from his studies to basically run the country. 

And that set up a really interesting power dynamic. On the one hand, you had these generals who knew that modernization was inevitable. Some degree of openness with the South was inevitable. They just didn’t want it to happen on their watch, because they didn’t want to lose their prospects and their wealth and their position. And then you had Kim Jong un, whose father had been killed by these guys and who’s or mistreated from his point of view, and whose grandfather had been killed by these guys. 

He was like, I really hate these guys. So you had this interesting situation where the crazies of the second generation were still around, and the iron clad dictators of the first generation were still around, and then you had this kid alone who suddenly was the nominal leader. And so what happened over the next decade is Kim Jong UN. 

He’s the chubby guy, learned how the system worked, and whenever he had an opportunity, he offed one of his father’s generation. So we had a guy in Singapore who got hit with some sort poisonous nerve agent. My personal favorite are the Minister of Railways, who got run over by a train, and a defense attache who accidentally got shot by an anti-aircraft gun. I mean, you just imagine the mechanics of that. Anyway, thinning out the crazy generation and waiting for the first generation to die. Well, folks, it’s been 80 years since World War two. Anyone who fought with Kim IL Sung in World War II is now long gone. And the generation that rose to power in the 50s, 60s and 70s are mostly gone as well. 

So it’s just Kim Jong UN now. Now, let’s bring that from ten years ago to roughly the present. Most people assume that North Korea is just the yippie and rabid Chihuahua on the end of a leash, controlled by Beijing and under Kim Jong IL, the crazy one. There was something to that, but that’s not the case anymore. North Korea has an independent streak and is looking for, and has been looking under Kim Jong UN for any sort of leverage, not just to strengthen his personal power and that of his family and entrench the regime in North Korea. 

But more importantly, to make sure that Beijing can’t just dictate 

So if you go back to 2017, 2018, 2019. That’s when Kim Jong UN started expressing a degree of independence that Beijing really didn’t like. There was a series of bilateral meetings between chairman G. And China and Kim Jong un. Most of these meetings happened in Beijing. 

And basically, to sum it up, it was chairman G who’s a short dude standing or sitting with a boost so he could lecture down to Kim Jong un and lecture the wayward province about how things were supposed to be. And the Chinese citizenship ate that up because it made China look important, but it just infuriated Kim Jong un. 

And after one of those summits, he’s basically on his train coming back. He doesn’t fly coming back to North Korea. And he directs his staff to call up Donald Trump, who had been using about maybe having a summit. And he basically said, Call Donald Trump, tell him the summits on. never going to talk to these fuckers again. 

And over the course of the next few months, we had two summits between the younger Kim and Donald Trump, one in Singapore and one in Vietnam. Now, that’s from the American point of view, where it ended. Trump didn’t really read the briefing materials, as we know now that the State Department and the CIA provided to him. And after the second meeting, which I believe was in 2019, he basically just moved on to other topics. 

And from the point of Kim Jong UN, who felt that he had really put his neck out, there, he was. He was pissed. And so not that American North Korean relations have ever been great, but if there was a chance for a break, that was the moment in the moment past, which meant Kim Jong UN in North Korea all of a sudden were kind of out of luck if the Americans were not paying enough attention to cut a deal, and he was still worried about whatever was going on in China and them dominating North Korea, there really wasn’t anybody else left because the Russians had fallen so far. 

Enter the Ukraine war, because all of a sudden in 2022, the Russians found themselves just as isolated from international markets as North Korea was. And all of a sudden, Kim Jong UN was like, hey, there’s an opportunity here for us. And if you fast forward another year, suddenly we’ve got over 10,000 North Koreans at a time, fighting in places like Kursk, in the Russian Ukrainian borderlands and ultimately in Ukraine itself. 

And we have decades of built up supply, stockpiles of North Korean artillery that is being sent by the trainload to the Russian front with Ukraine. And at one point it’s not that way anymore. But at one point, well over one third of the artillery shots that the Russians were using were sourced from North Korea. And that partnership has continued to a degree. 

There’s still North Korean troops. There’s still North Korean weapons. And then exchange. The North Koreans are getting Russian technology, most notably intercontinental ballistic missiles. Because remember, Russia, even in its weakened state, is still a space power. And so you could argue that while they haven’t tested it, the North Koreans could easily launch an ICBM and strike anywhere in the continental United States. 

Now, that’s all water under the bridge anyway. Bottom line is that Kim Jong UN and North Korea found their out in Moscow. And while being friends with Moscow these days doesn’t get you a whole lot. It certainly is an interesting piece of leverage to use against Beijing. Which brings us to today, chairman G is in Pyongyang meeting with the younger Kim for only the second time that he’s actually been to North Korea. 

And the entire topic of the talks is China’s effort to rake North Korea back into the Chinese sphere instead of being in the Russian sphere. The North Koreans, Kim Jong un, specifically, have long been just as allergenic about cutting deals with the Chinese as they have with the Americans and everyone else. So if G is going to actually get this, he’s going to have to offer quite a bit, especially when you consider that the normal goalposts for bilateral relations economic aid, technological aid, money, energy, the North Koreans are really getting everything they could need right now from the Russians. 

So for China to get back into the position where they’re the dominant external power in North Korea, it’s not just that that it would have to offer a lot more, but they’d have to offer it without strings. And from China’s point of view, that kind of defeats the point. Because China wants a regime, it can control that. All of that is kind of piece one. 

Piece two is that Kim Jong UN has done more to change the strategic position of North Korea just this year than any leader in North Korea has done since its formation at the end of the Korean War, beginning of the Korean War. He’s changed the Constitution so that North Korea now defines itself as an independent state that is not seeking reunification with the South. 

One of the polite fictions slash aspirational goals of both Pyongyang and Seoul has been that the division of the Korean peninsula was imposed by outsiders, namely the Soviet Union and the United States. And at some point, they would really like to be reunified into a single entity. Now there’s a billion details as to how that might happen, and nobody agrees on any of it, because you know who’s in charge, for example. 

I mean, the South Korean population is twice the size of the North, that it’s a first world technocracy. Much of North Korea is still pre-industrial. If it was a straight up merger, it’s obvious who would be in charge. And if there’s one thing that Kim Dynasty cares about, it’s regime preservation because that’s their power. Anyway, the official position of North Korea now has shifted that reunification is completely off the agenda. 

It’s an independent state. It does not seek union still hostile to the South, still hostile to Japan and the United States. But it’s no longer even rhetorically aiming for state merger, which means it really has come of age as a wild card in international affairs. It’s playing the Russians and getting a lot of really advanced tech from their point of view, that low cost of just a few thousand troops that just get massacred. 

The Chinese see it as an unknown that they can’t manage, which I personally find delightful. It’s got fairly reliable short and medium range ballistic missiles and a fairly advanced nuclear program for a state that has under 30 million people. And all of South Korea and all of Japan are in the easy hit zone. And now, courtesy of their alliance with the Russians, it probably could nuke the United States or at least send the missile whether we could intercept it or not as an open question. 

So it’s a different North Korea now than what we’ve been dealing with before. And the first world leader to go there and get a taste of it is Chairman Ji of China. And he’s there right now. And from what few communiques have been released so far, reading between the lines, it’s clear that she is not having a good time of it, which I also find delightful, but with the one caution that if an authoritarian madman like she doesn’t care for the new North Korea, imagine what everybody else is going to think. 

So this is a good for drama and good for shaking up the strategic map, but it is something that is gestating at the edge of Asia, in the heart of some of the most dynamic economies in the world, in a way that’s going to cause a lot of pain in the not too distant future.

MedShare Donation + The Koreans Are Coming to the Ukraine War

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Reports coming out of South Korea indicate that North Korean troops could be deploying to Russia. These reports are unconfirmed, but the South Koreans aren’t usually in the business of lying. So, what does this mean for the Ukraine War?

North Korea hasn’t seen combat in ages, so while they gain some field experience, the rest of the world will get a glimpse at their capabilities. If the artillery and missiles the North Koreans already sent to the Russians are any indicator, I wouldn’t expect much. This could also drag the South Koreans into the conflict on the Ukrainian side, which might outweigh what the North Korea brings to the table for Russia.

Speaking of dragging new players into the war, Iran’s involvement with Russia could get Israel involved as well. This would likely come in the form of Israeli attacks on Iranian facilities making drones, but with Israel being a leader in defense technology, this could be a game changer for the Ukrainians.

The Russians are showing their declining military capacity by grasping at straws trying to get the North Koreans and Iranians to save their asses, but that strategy may soon backfire.

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Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

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Our newsletters and videologues are free and we will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

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Transcript

Hey everybody. Peter Zeihan here coming to you from Colorado. Today there’s some weird stuff going in in the news. We’ve got reports that North Korean troops, are in the process of deploying to Russia. Some technical advisers are already there providing the Russians with assistance on how to use North Korean weaponry system. But now we’ve got, open discussion in South Korea about, intercepts. 

From Point Yang, about, an actual troop deployment to maybe even fight on the front lines. Now, I don’t have any way to confirm this. I don’t have, my ear in the Korean dictator Kim Jong un’s, House or anything like that. But the South Koreans are not known for making stuff up. I mean, they’re known for. 

And they’re known for bulgogi and kimchi and soju and electronics and cellular technologies and computing and mass manufacturing and heavy drinking. But they’re not known to make shit up. So I’m taking this a little bit more seriously than I would any other random report. We don’t usually get a lot of fake noise out of Seoul. Anyway. Four big things come from this. 

Number one, the North Koreans have not been in a fight since 1953, so there is no living soldier in North Korea that is ever fired a rifle in anger. And getting any sort of information on how they might perform in real world circumstances would be an intelligence bonanza. Of course, it goes both ways. The North Koreans haven’t had been in a fight, so being able to see a front line, even if they’re not major combatants, is something that they could use for training purposes. 

But for the point of view of the United States and South Korea, this is going to be the best bit of information we’ve ever had, in the last 70 years. That will allow us to remap our war plans, for the Korean Peninsula, should anything go wrong. Having a more accurate view of your enemy is always the first step, to planning. 

The second big thing, North Korea is not the only country that is providing foreign assistance to the Russians. Specifically, they’re providing, ballistic missiles and artillery shells to the degree that maybe half of the artillery shells that have been used in Ukraine by the Russians this year are from North Korea. I mean, they’re crap. Probably half of them don’t work. 

And they’ve been blowing up more Russian artillery tubes than Ukrainian artillery tubes, because sometimes they blow up too soon. Anyway, they’re not the only ones. The Iranians are also involved with the Shaheed drones, which over which a thousand have been used at this point. Now, just as in with the North Korean situation, there’s an intelligence bonanza to be had here or a way to get information on the inside of the system. 

The Iranians, have recently launched a couple hundred ballistic missiles against Israel, and Israel is itching to respond, and they’ve basically already been given the green light, more or less, by the Biden administration to do so. The question is where, when and how? Well, if we now have the North Koreans intervening in the Ukraine war and we already have the Iranians intervening in the Ukraine war, then there’s an opportunity here for in exchange for the Biden administration, you know, kind of giving its blessing, to an Israeli retaliation attack on Iran. 

They might just add a couple target coordinates in order to get the facilities that make the shitty drones. Iran, like North Korea, is not exactly a technological leader, and the number of personnel that can put these things together is relatively limited. So if you were to take out a cluster of technical support, which the Russians desperately need, as well as the manufacturing facilities of which the Russians desperately need, you could as part of your retaliation attack, see Israel actually remove a huge source of military capability from the Russians in the Ukraine war. 

Also, keep in mind that the Russians are among the best in the world at assassination campaigns. And whenever an Iranian nuclear scientist gets a little bit too useful, they tend to meet a dire end. Just simply expanding that target set to include drone technicians is something the Israelis could do very, very, very easily. The third thing, as I mentioned, North Korea and Iran are not countries that I would mention as technological leaders and the fact that the Russians need them for half of their artillery shells and a substantial percentage of their drone warfare, that bodes really, really badly for the Russians ability to maintain this war long term. 

We already know that they’re only be able to make a double digits number of new tanks a year. They’re just really refurbishing their old ones. And if the technical skills within the military industrial complex of Russia are down to the degree that they’re this dependent on two fourth string countries, that would suggest as we move forward, they’re going to become wholly dependent upon imports of weapons. 

Well, that provides other opportunities for countries to choke the Russian war machine, because if the vulnerability isn’t in Siberia, if it’s inside this farm, that’s a lot easier to get to, especially if you’ve got countries like South Korea or Israel who are now involved. Which brings us to the fourth and final thing, South Korea, in Israel now involved, there’s a diplomatic angle here as well as a strategic angle. 

You have to consider both of these countries have been desperate to avoid Ukraine’s entreaties, and the United States requests to get involved in the conflict in any meaningful way, because they’ve got bigger security issues closer to home. That focus wholly on them. And they didn’t want the Russians stirring the pot in their own backyards. Well, now the Russians are stirring the pot in their own backyard, so they are involved. 

And so we’re seeing the political restrictions loosened in both Jerusalem and Seoul. And that can have a lot more impact than simply providing the Ukrainians with some technical help and some weapons systems. South Korea is one of the world’s five biggest arms exporters and produces regular things like artillery and rocket system and tanks that are not too far behind what comes out of Germany or France or the United States, but at a significantly lower price point. 

In fact, they’ve already signed a deal to provide the poles with over a thousand tanks and assorted systems. Providing that sort of assistance to Ukraine is obviously a no brainer. But when you look at a country like Israel that has under 10 million people and is in kind of a tough neighborhood, mass producing hardware quickly is something they cannot do. 

But the South Koreans can. And to flip the equation, the Israelis are the world leader or a world leader in anti-missile technologies and by far have the world’s best anti artillery and anti rocket technology and their Iron Dome system. Well, on day one of any theoretical Korean War, the North Korean is going to be lobbing all kinds of ammo into downtown Seoul. 

So if Israel can help out Korea with artillery and rocket defense, cooperation between these two countries changes the strategic calculus of both of them in a very positive way. And if you can take Israel’s technical acumen on some specific weapons systems and married to Korea’s ability to produce a lot of things very quickly, you can actually see that working out through the entire Western alliance system. 

So as I said several months ago, when the North Koreans started to get involved at Russian insistence, you know, this was probably one of the dumbest things that the Russians could do. I mean, yes, it gives them a tactical leg up in terms of ammo, but it risks bringing in a really important player. On the other side, and that’s South Korea. 

And now we’re looking at both Israel and South Korea being brought in at more or less the same time and being brought in together. And that changes a lot. 

Photo from Wikimedia commons

Backfire: Putin’s North Korean Joyride

Monument of hammers raised in North Korea

If there’s anything Putin’s good at, its pressing the West’s buttons…and his latest trip to North Korea is no exception. However, by signing a new defense pact with Kim Jong Un, Putin might inadvertanly gain Ukraine a new supporter.

For years, the US, China and Russia have worked together to contain North Korea’s weapons programs and illegal activities; Russia has clearly stepped away from that aggreement. In the process of antagonizing the West and partnering with North Korea, Putin likely pissed off South Korea.

The South Koreans have become one of the top five arms exporters globally, but until now they’ve limited exports to Ukraine. If South Korea’s position begins to shift – and it looks like we might be heading in that direction already – we should expect to see plenty more deals like their recent tank deal with Poland.

Prefer to read the transcript? Click here

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

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Transcript

Hey, everybody. Peter Zeihan here coming to you from Green Mountain, just above Boulder with the flat irons there behind me. Today we are going to talk about Vladimir Putin’s recent trip to North Korea. 

Basically, he went there, talked shit about the United States and, said he would sell weapons to North Korea, signed a defense pact and talked about how they are best buds. And he and Kim Jong un, that’s the premier of North Korea. He’s a really chubby guy. basically took turns, flattered each other and driving themselves around in a Russian made limo, which is, well, let’s just say it didn’t crash. 

And that’s kind of an achievement anyway. So, the purpose of this trip was basically to piss off the Western alliance, especially the United States. US diplomacy going back several presidents, at least to Clinton, have been working pretty aggressively to partner with the Chinese and the Russians to box in North Korea to tamp down their weapons program, the drug smuggling, their money laundering, all that good stuff. 

And in the last year, because the Russians are now finding themselves on the opposite side of everything from pretty much everybody, the Russians have actually been vetoing resolutions in the Security Council that would continue those sanctions programs on the North Koreans. which is something that the United States is really cheesed off about because the number one target of any missile launch is going to be Los Angeles or San Francisco. 

Well, let’s look at this from anyone else’s point of view for a moment. Just not Russia’s, not North Korea’s and not the United States’s, the other country that matters on the Korean peninsula is South Korea, an economy that’s roughly 15 to 20 times as large and as a technological leader, not just in things like semiconductors and manufacturing, but increasingly software and weapons technology. 

In the last five years, South Korea has emerged as one of the top five arms exporters in the world, specifically excelling in things like artillery and rocket systems and tanks. And if you start looking at this from the South Korean point of view, it is clear that Vladimir Putin made a colossal mistake, because until now, the South Koreans have limited their arms exports to Ukraine because they don’t want to get involved. 

But now that Putin has come to North Korea and bandied about how he and the North Koreans are best friends, the sky is the limit. And unlike German tanks or American tanks, things that are being made in limited volumes and so can’t be rushed to the Ukrainian front all that quickly, the South Koreans are the masters of making anything at quality and at scale very, very, very quickly. 

I mean, this is the country that back in the 1970s built what was then the world’s largest supertanker by building it in halves in two different dry docks and then welding it together at the end. And for those of you who built supertankers in your garage, you know, don’t do this at home. This is really dangerous. Anyway. It works. 

they’ve already sold 180 K-2 tanks to the poles. There’s another hundred and 80 on their way, and they’re going to be working with the poles on setting up domestic manufacturing. So it’s not just that the South Koreans can upset the balance of power in terms of the arms balance in Ukraine. By selling weapons directly, they can help various European countries establish their own production, and then they can have two, three, four different production sites basically working against the Russians. 

this isn’t the dumbest thing I’ve seen any country do in the last 20 years, but it definitely makes the top ten. All right, see you guys next time. 

North Korean Missiles Heading to Russia, Part Two

A missile being fired against a blue sky

We’re back with part two of Russia’s missile-sourcing escapade. Today we’re looking at the specifics of these North Korean missiles and their significance.

The North Korean’s are sending the Russians some of their KN-23 and 25 missiles, which are limited range (max. 400 miles) and low accuracy models. This means that each of these missiles is a war crime waiting to happen, but what’s another drop in that bucket? Unfortunately, this has just dumped a new load of gasoline onto the fire that is the Ukraine War.

The Russians will be able to use these missiles in conjunction with satellite guidance to close in that accuracy ring a bit. In the meantime, they’ll be gathering insights on the technological capabilities of the North Korean and Iranian missile systems.

Once the Russians mesh the missile and satellite tech together, the Ukrainians will be facing a much more intimidating Russia than before.

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

Support medshare's ukraine fund
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TranscripT

Hey everybody. Peter Zeihan here coming to you from? Well, there’s no other word for it. It’s a frigid Colorado this morning. We’re right at two degrees Fahrenheit. Anyway, I want to do a follow on to a little bit. We we talked yesterday on the transfer of North Korean missiles to Russia. The models in question are called KN-23 and 25.

They have a very limited range and they’re not particularly accurate when the North Koreans use them. The accuracy range is typically 100 to 200 meters. So they’re not much. Well, they’re just not smart. There are most artillery actually hits more reliably than they do with the add on of satellite guidance. And a little bit of extra hardware. You could probably get them into the 50 to 100 meter range.

Now, this is important for two reasons. Number one, it means that every missile that the Russians fire in the general direction of a population center, which is where most of these things are being used in Ukraine, is almost by definition a war crime. So, you know, we’re we’re now getting half of we’re past 150,000 documented incidents. So if the war crimes tribunals ever do happen to happen at the end of this war, who is to be a lot to do?

But the second and slightly more important in the long range point of view is the assistance, the military assistance, the supply assistance that the North Koreans and to a lesser degree the Iranians are providing the Russians. Is it just important for the war or to get an intelligence look at what the North Korean and the Iranian systems can do technologically?

And from a production point of view, the Russians are also promising that both countries are satellite tech, or at least the ability of the Russians to launch a satellite for them. And so if you marry Russian satellite tech, which doesn’t have to be top notch to provide guidance to C weapon systems, and you apply it to these two laggard countries, you can actually make a fairly significant improvement in their capacity to target going from a 200 meter range to a 100 meter range, obviously is a significant step up.

So I don’t mean to belittle any part of this transfer system that is going on. It’s just a question of time. Okay. That’s all I got for now.

North Korea to Provide Russia with Military Aid

Putin and Kim Jong-un finally had their little tea party at the Cosmodrome out in the far east of Russia. Besides boosting each other’s egos and gossiping a bit, it looks like the main discussions revolved around North Korea providing military assistance to Russia in the form of artillery shells.

Since Russia’s war on Ukraine won’t be letting up anytime soon, they need to replenish their dwindling supply of artillery shells. With limited options, Russia will have to settle for outdated North Korean supplies – not quite the pick of the litter here.

What does North Korea get out of this deal? Russia doesn’t have much to offer, but they could transfer some long-range missile tech to the North Koreans…and that’s cause for concern.

Given this deal’s regional and global security implications, countries like South Korea, Japan, China and the US should be worried. Sure, there are sanctions in place, but in all reality, those minor deterrents won’t stop North Korea.

Prefer to read the transcript? Click here

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:

First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.

Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.

And then there’s you.

Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

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Transcript

Hey everybody. Peter Zeihan here coming to you from Phoenix, Arizona. Today, we have to talk about the summit between the strongmen of Russia in Korea, of Vladimir Putin on the Russian side and Kim Jong un on the Korean side. They met in one of the Russian Cosmodrome in the Far East and the primary topic was whether or not the North Koreans can provide the Russians with military assistance, which for anyone who has a sense of history.

The irony here is practically believing out of the sky anyway. The issue, of course, is that the Russian war in Ukraine is not going to spark. And when you have a conscript heavy force like the Russians do, you try to use standoff weapons that aren’t really smart in large volume, specifically artillery. If you exclude either China or the United States from the math, Russia has more artillery than the rest of the planet combined.

And best guess is, by the end of this year, they’ll have gone through over 20 million artillery shells, artillery shells don’t age particularly well. And after they’re more than like ten, especially after 20 years old, the explosive start to crystallize a little bit and that can make things decidedly lively when you try to, I don’t know, move them, especially when you try to launch them.

So the Russians have had a lot of accidents with the transport system, their logistical system. And then, of course, they’ve had a lot of barrels and the artillery to blow up from the inside. All of these are bad things if you try to launch a lot of artillery. So they need more shells and they’re turning to North Korea, which I believe has the world’s fourth largest stock of artillery.

The problem here, of course, is that North Korea’s industrial plant isn’t exactly great either. And a lot of the North Korean stuff is actually older than the Russian stuff. Gives you an idea of how desperate the Russians are for ammo. Now, the question, of course, is what are the North Koreans get in return? Because the Russians don’t have anything from a trade point of view that’s of use.

You might be able to send a few tankers of crude oil. But the Russians honestly need that for hard currency earnings. So the questions, if there’s anything else can be transferred in terms of military technology, there really isn’t. One of the things that the Indians have found out recently that they’ve been developing missiles and planes with the Russians, where the Indians provide a lot of the capital, and then the Russians provide the technical know how.

And what they’ve discovered is very few of those contracts are actually being honored by the Russians. So because the Russians have lost the technical capacity to manufacture even moderate numbers of planes. So they’re now starting to back out of all their contracts because they realize that the Russians have been lying to them the whole time. In addition, there’s some talk of like maybe a nuclear powered vessel or submarine, but it’s taken the Russians 15 years to build their last nuclear powered ship, which was an icebreaker.

So argue the argument to be made here is whether or not the Russians even have the capacity to sustain their existing nuclear naval fleet, much less build new ships for themselves, much less have surplus to transfer to North Koreans. And honestly, it’s looking pretty poor for that. That doesn’t mean the Russians have nothing, and it doesn’t mean that there’s not a problem.

This is probably not going to be the things that most people are talking about. Look at where the meeting was, the Cosmodrome. This is a facility out in the Far East that the Russians built when they lost control of the Kazakhstan Cosmodrome at the end of the cold War. And when it comes to launching satellites or intercontinental ballistic missiles, the Russians are still one of the few places in the world where that technology can theoretically be obtained, even if the Russians have lost the capacity to build a lot of new stuff themselves.

So the primary global concern, primary regional concern for North Korea is missiles long range missiles. And that is something the Russians have in spades. So whether it’s officially part of a program to launch a satellite into space, which, you know, whatever, or more likely to deliver a payload to another hemisphere, that is something the Russians can and probably are willing to transfer to the North Koreans because the Russians are no longer party to any meaningful arms control treaties at all, which will generate no end of headache, not just for the South Koreans and the Japanese and Chinese who.

Newsflash, the North Koreans hate the Chinese, but also the United States. There’s not a lot the United States can do about this because the North Koreans are not in a position where sanctions work at all. You can do as punish the Russians indirectly and hope for the best. And that’s not a great security strategy. But that is where we are.

Yeah, that’s all I got bye..

Let’s Talk North Korea and Travis King

Before we dive into today’s video, let me start by saying that if you want to defect somewhere…maybe don’t choose the same place as Travis King. Now let’s look at where things are with North Korea.

The history of North Korea is nothing short of a fever dream, and anyone who tells you they know what’s going on inside the country is most definitely lying.

Fast forward to today, and we still have very little insight into the inner workings of North Korea. Although, it appears that Kim Jung Un is “finding his own way” as the generations before him mysteriously die off or retire.

What does this mean for Travis King? We’ll just have to wait and see what this wildcard of a country decides to do.

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
 
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
 
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
 
And then there’s you.
 
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

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Keeping Nukes on the Table

Picture one of those old westerns where the outlaw and sheriff are about to have a standoff outside the saloon. The bad guy (who has never lost a duel) sweeps back his coat and reveals his shiny-six-shooter. The sheriff (who isn’t a great shot) then sweeps back his coat and brandishes a nuke…perhaps not the most realistic scenario, but it helps me get my point across. If your country can’t win a traditional fight, throw a couple nukes into the mix and hopefully no one is dumb enough to poke that bear.

With the South Koreans “keeping nukes on the table,” the conversation has now turned into what other countries should build out nuclear options. There are two boxes a country should be able to check before going nuclear: do they have the technical capacity to do so and is there a strong enough strategic reason to have them?

Just as the sheriff in our scenario knew he couldn’t win in a traditional gunfight, there is a long list of countries that would fall very quickly in a conventional war. Throw nukes into the mix and everything changes. Unfortunately, that list of countries is longer than any of us should be comfortable with.

Prefer to read the transcript of the video? Click here

Here at Zeihan On Geopolitics we select a single charity to sponsor. We have two criteria:
 
First, we look across the world and use our skill sets to identify where the needs are most acute. Second, we look for an institution with preexisting networks for both materials gathering and aid distribution. That way we know every cent of our donation is not simply going directly to where help is needed most, but our donations serve as a force multiplier for a system already in existence. Then we give what we can.
 
Today, our chosen charity is a group called Medshare, which provides emergency medical services to communities in need, with a very heavy emphasis on locations facing acute crises. Medshare operates right in the thick of it. Until future notice, every cent we earn from every book we sell in every format through every retailer is going to Medshare’s Ukraine fund.
 
And then there’s you.
 
Our newsletters and videologues are not only free, they will always be free. We also will never share your contact information with anyone. All we ask is that if you find one of our releases in any way useful, that you make a donation to Medshare. Over one third of Ukraine’s pre-war population has either been forced from their homes, kidnapped and shipped to Russia, or is trying to survive in occupied lands. This is our way to help who we can. Please, join us.

CLICK HERE TO SUPPORT MEDSHARE’S UKRAINE FUND

CLICK HERE TO SUPPORT MEDSHARE’S EFFORTS GLOBALLY

TRANSCIPT

Hey Everybody. Peter Zeihan coming to you from an exciting hotel room back on January 12th. So Wednesday of the last week might be two weeks. By the time you finally see this, who knows? The *South Korean* president said that they were keeping nuclear weapons as a possibility on the table for future strategic development. Now, this is a big no no in international affairs, just kind of publicly flirting with the idea, like, yeah, we might go nuclear, especially if that word Korea is involved.

But you have to look at it from their point of view. The United States has changed the way its military works. Back during the Cold War, when there really wasn’t any other naval power out there, the United States maintained a relatively large destroyer fleet. And in doing so, we were able to patrol the global oceans for everyone. With the Cold War ending in 89 and the Soviet system collapsing in 1992.

The world went different ways and we saw a number of secondary powers start to rise, you know, your Chinese, your Brazils, your Indias and so on. And the United States kind of declared that history was over. And it thought that the only strategic policy that we would need is to have a hammer to take out any country that might challenge what the post World War Two post-Cold War order might be.

So, you know, your odd Yugoslavia is or maybe your North Koreas. And in that sort of scenario, we changed the way our military worked. So we started having fewer destroyers and more aircraft carrier battle groups. So it was less about preserving the peace that we now thought had been achieved and instead about making sure we had the military capacity to challenge anyone who would try to stick a knife in the eye of the system.

At the same time, all these secondary powers started to have their own security policies independent of Cold War norms, and a number of countries started to build their navies, with China being at the very top of that list. So even if the United States could stomach the political cost of being involved in the world and being the global policeman, I would argue that the United States is no longer in a position where the balance of forces allow it to create an environment that’s safe for global commerce, U.S. naval power, stronger than it’s ever been, but it’s also more concentrated than it’s ever been. And ultimately, if you want the tens of thousands of tankers and container ships and Bulker ships that ply the oceans every day to be able to pick up and drop off cargo wherever they need to. The 80 destroyers that the United States has now, just don’t cut it. They probably wouldn’t have even cut it during the Cold War.

And so instead, countries are starting to look at their own security environment and making decisions about whether they need to take independent action because they don’t find that the United States security guarantees are worth what they used to be. And that’s before you consider that they probably aren’t worth what they used to be because the United States is moving on.

So South Korea is a country that clearly has a security need. It’s sandwiched between North Korea, Japan and China, all countries that it considers rivals to a certain degree. And it is the weakest military power of the four. Having nukes would be the great equalizer. And the Koreans have had nuclear civilian power for decades. They’re certainly technologically competent. And I have no doubt that it would only take a few days, to weeks for the South Koreans to build a crude nuclear device if they wanted to, and a deliverable weapons system in under a year. Well, within their capacity. And this is hardly a conversation that should be limited to South Korea if you’re going to consider the cost economically, strategically, diplomatically of going nuclear, you have to have two things. Number one, the technical capacity to build it out yourself. And number two, a strong strategic, overriding reason to take the risk in the first place. Korea checks both columns very, very firmly, but so does Japan, and so especially does Taiwan. And there’s no surprise here. This is shaped of strategic realities for the Chinese when it comes to Taiwan.

The unofficial battle plan for the Chinese, if they ever do decide they want to pull the trigger on Taiwan, is not to do a slow build up over weeks like the Russians did when they were getting ready to attack Ukraine last February. No, the Taiwanese would see that and they would use that time to build a few deliverable nuclear systems. And so the only way that Taiwan could theoretically fall is if it came at the loss of several Chinese cities. So the unofficial plan in Beijing is to basically text all their soldiers, tell them to run to the closest port, hijack a fishing vessel and just set sail. You know, you’ll have a million casualties simply crossing the Taiwan Strait. But at least you don’t lose a city that way. 

Outside of East Asia, there’s plenty of other powers who kind of fall into these same two categories. If you’re looking at anyone on the Russian periphery. Obviously, Ukraine wishes they had nukes at the moment. But if the West proves to be insufficiently united in dealing with it, whatever comes next in the Ukraine war, I can absolutely see in an environment where Finland and Sweden and Poland all go nuclear.

They all have the technology. They certainly all have the need. You could even toss Romania into that group. But the big one, the one that will really change everyone’s strategic calculus is Germany, because any post Ukraine world where the Russians look strong is one where the Germans know that in the end they’re going to be fighting the Russians on the plains of Poland.

And since the Germans have spent the last 60 years disarming, they absolutely do not have the military industrial plant in a short period of time in order to face down the Russians in number. The only way that they can buy time is by going nuclear. One final country to kind of toss into this mix, and that’s Saudi Arabia.

It’s not that the Saudis have the technical capacity to go nuclear. I mean, what are they going to do, rub two molecules of oil together to get fission? No, but they do have really deep pockets and I can totally see them walking into Islamabad, Pakistan, and writing a check and walking out with a few nuclear weapons. We are nearing a point again, with the United States no longer being involved in the region, we’ve withdrawn from the Middle East pretty much completely.

We’re nearing a point where the Saudis and the Iranians are going to be having a direct confrontation in the not too distant future. And when that happens, the Saudis can either take their fat, lazy population with absolutely no military skills and line them up in the desert and hope that is enough. Or they can use their Air Force, which is okay, and hope that bombing the advancing Iranian forces is enough or they can brandish a nuke.

So bottom line, the countries that are most likely to go nuclear in the next several years are not the normal candidates. But the rationale stays the same. You go for nukes if you don’t think you can win a conventional conflict. And the list of countries who can’t win a conventional conflict but have the capacity of going nuclear is a lot longer than everyone should honestly be comfortable with.

Alright. That’s it for me. Until next time.

CRF Files, Part I: The Future of Korea

Read the other installments in this series:
 
The CRF Files, Introduction
The Cutting Room Files, Part 2: The Future of Mexico
The Cutting Room Files, Part 3: The Future of Canada
The Cutting Room Files, Part 4: The Future of Japan
The Cutting Room Files, Part 5: The Future of the United Kingdom
The Cutting Room Files, Part 6: The Future of China
The Cutting Room Files, Part 7: Europe
The Cutting Room Files, Part 8: American Politics

by Peter Zeihan and Melissa Taylor

This piece is part of the Cutting Room Files, portions of the upcoming Disunited Nations text that were cut for length. Disunited Nations is available for pre-Order now on Amazon.com, Harper Collins, and IndieBound.

When Donald Trump became president, world leaders fell into two broad buckets. The first thought that if the Americans were going to drop the global mantle of leadership, then perhaps there is some space for us. Russia’s Vladimir Putin became more aggressive throughout the Russian near abroad. France’s Emmanuel Macron tried to become the voice of the West. Canada’s Justin Trudeau became a liberal supermodel.

The second were those leaders who weren’t sure the Americans knew what they were doing in electing an isolationist, and thought the best bet was to not rock the boat. This club included Germany’s Angela Merkel, Australia’s Malcolm Turnbull, and Britain’s Theresa May. All and more bet/hoped that Trump would be little more than a hiccup in normal relations. They kept quiet and aimed to not do anything that might annoy the Americans as a whole, so that when Trump left the stage their relations with America could get back to normal.

There was one exception: South Korean President Moon Jae In. Rather than strike out or hunker down, Moon bluntly asked for the terms of a revised trade deal that Trump would approve of.

Moon’s logic was unassailable. Put simply, Moon recognized that he completely lacked leverage, (correctly) calculating that being an eager first volunteer might allow South Korea to walk away without undue sacrifice as the Trump administration looked for an early win. The revised deal’s technical talks took but a few weeks, and the revised KORUS is already implemented.

Good thing too. “Logic” was about all Moon had going for him. Everything about Korea’s success is exclusively because of the Order.

South Korea imports all its oil and natural gas, and its import/export flows are so large that it is the world’s 5th-largest trading power by value despite having a population of only 51 million. As with many of the world’s developed economies, South Korea cannot look internally for greater economic growth; The country’s population has all but peaked and, again like much the rest of the world, faces a rapidly aging demography supported by an ever-smaller working age population.

South Korea’s largest trading partner today is actually China, but that is the beauty of the Order. South Korea can trade with whomever is willing to buy their goods. For now. It all relies on American guarantees that seem to be crumbling.

That’s the numbers and dollars argument. In strategic terms things are far more complicated.

South Korea sits among Japan, China and North Korea and has adversarial relationships with all of them. The only reason South Korea even exists is because American troops ward off the most salient threat to the north, while preventing Japanese and Chinese imperialism. That security guarantee is not easy to maintain:

North Korea believes the best way to beat a Grand Master at chess is to never let them make a first move. Infamously, North Korea has aimed an untold number of pieces of artillery at Seoul, just across the border and home to nearly half the country’s population. In a real war, by the time the first shell lands in Seoul, tens of thousands of others would already be airborne. But this is only one of its many preparations. Turns out that if you dedicate a country’s entire attention span for 70 years to a seething hatred of what’s on the other side, you can accomplish some pretty impressive things, up to and including an effective nuclear deterrent.

South Korea decided to focus instead on ships and trains and petrochemicals and white goods and electronics and computers and cellular tech. South Korea may be able to prevail against North Korea in a knock-down, drag-out fight, but there is no way the South Koreans can K-Pop themselves out of hideous infrastructure damage and mass civilian casualties. Only American forces – massed in and near Seoul and the DMZ – can provide the hitting power to at least partially preempt and mitigate such carnage.

That’s just North Korea. The South Koreans, accurately reading their history and geography, view China and Japan as even more significant security threats. Japan outpopulates South Korea by well over 2:1, China by over 20:1. The navies of either country could wipe the Korean navy from the seas in days. To the south, east, and west, South Korea is surrounded by waters that either Japan or China could dominate given the right push. South Korea’s second city, Busan, is in a particularly vulnerable spot separated from mainland Japan via the Korea Strait, barely more than 100 miles across. Inchon, the western extremity of the Seoul metro region, isn’t much further away from China. And of course, Korean trade links to the wider world are impossible to maintain without both Japanese and Chinese quiescence.

For decades this has all been moot. South Korea, Japan and China were all members of the U.S.-led global Order. The U.S. Navy has ensured peaceful seas and ample trade. Oil, LNG and raw materials flow in, finished goods flow out, and Korea is one of the world’s largest transshipment and manufacturing nodes. So long as the Americans remain involved, Korea’s economic and security problems remain purely theoretical.

But the Americans – left, right and center – want to slim down America’s global position. The Korean deployment is America’s third-largest (after Japan and Germany), and the one that is by far in the trickiest and riskiest strategic position. And that is what keeps Moon’s administration up at night. The Americans are losing interest, and there is no version of a post-Order world where South Korea continues to survive at all – much less as a wealthy, trading nation – unless Seoul can obtain a powerful, dedicated ally.

So it was all Moon could to do cave in trade talks with the American administration on everything. And not just in trade negotiations. The Trump administration is insisting that South Korea compensate the United States for ongoing troop commitments to the tune of at least $5 billion annually. That’s a lot for a country Korea’s size, but honestly it’s a bargain considering what 26,000 American troops can do when they are suitably motivated.

Is caving to the U.S. on trade and defense reimbursement enough to keep the American troops in-country in this post-Order world? No clue. But Moon, correctly, concluded that without conceding to American terms there was no chance whatsoever. 

That’s hardly the end of the story.

First, in the post-Order world, getting a deal with the Americans on trade or troops or whatever is not the end of the negotiations. It is the beginning. Because the Americans no longer have a global strategy or see a national interest in play aside from getting some better market access, keeping the Americans interested requires giving in not once, but every single time they ask for anything.

If the Yanks are displeased with the Koreans’ response, they will leave and there is no guarantee they can be induced to come back. It’s bad business to allow a homeowner that refused to pay for fire insurance to do so after the house catches fire. The Americans can – and will – watch the neighborhood burn. They won’t feel good about it, but they won’t feel all that bad about it either.

Second, the one item in the neighborhood the Americans really do care about – the North Korean nuclear program – is one that they may have found a way to muddle through. The handshake deal Donald Trump appears to have reached with North Korean dictator Kim Jung Un is that the reclusive country can keep their nuclear program so long as they abandon their ICBM program. The Trump administration seems to think it can live with a localized NorK nuclear threat so long as Pyongyang cannot nuke Seattle and beyond. What North Korea “projectiles” that have been launched since the first Trump-Kim summit are of the decidedly short-range sort, and there are at least some indications that North Korea dismantled a significant portion of their long-range missile testing facilities.

In a world where the Americans are blasé about South Korean issues, in a world where Americans no longer consider North Korea a direct threat, the Americans need a lot fewer forces in-theater. That’s great for the Americans…and the ultimate statement of no-interest in South Korea. The Trump administration appears to have handed off the entire North Korean issue to the local powers. And since North Korea already has the capacity to drop a nuke anywhere in South Korea or Japan or in the parts of China that are home to over 80% of the population, the entire region now has to deal with something that has stymied ten American administrations.

Finally, the Koreans have a hideously distasteful choice to make. They must prepare for a world without the Americans and that means they must find a new security guarantor. The menu of options are not encouraging.

While China is currently Korea’s largest trading partner, China is just as dependent upon the Americans as the Koreans for maintaining its economy and security. With the Americans checked out, China’s future will likely mirror its past; that of a broken, impoverished nation completely unable to maintain its own security or even feed its own people. Culturally, China might be Korea’s closest relation, but a long-term partnership will only bring Korea destitution.

In comparison, the future of Japan is bright. It already maintains the world’s second-most-powerful expeditionary navy and is one of the very few countries that has a chance to maintain its supply lines without active American assistance. The “smart” play for the Koreans would be to find a means of inserting themselves into the Japanese sphere of influence. Unfortunately, the politics of such insertion are wretched. The Koreans charge the Japanese with carrying out a cultural genocide during Japan’s 1905-1945 occupation of the Korean peninsula and, so far, have been unwilling to let the past go. Even then, letting that past go would only be the first step to entering Tokyo’s world. Much kowtowing by the proud Koreans would be required.

The third option is for South Korea to become its own defender. That is impossible with conventional weapons, but it just might work if the Koreans build a few dozen nukes to hold everyone at bay. Technically, the obstacles to South Korea becoming a nuclear power are minimal; it could be done in a few months at most. Operationally, however, it would turn South Korea into a regional pariah of the North Korean type and cut the country off from not just global trade, but regional trade (although post-Order that is unlikely to cause the same problems, as much as it is frowned upon today).

Partnership with China might be somewhat comfortable, but it would end with a starvation diet. Partnership with Japan might preserve the Koreans’ standard of living, but it would be politically toxic. Going nuclear might preserve independence, but it would force mass deindustrialization.

For the South Koreans, the future is a land of fear and want.

But that’s not the case for everyone…

America Sells Its Seoul

The United States and South Korea have agreed on an overhaul of their bilateral trade agreement this past week. In it, the Koreans caved on pretty much every issue of contention, most notably agreeing to improve American firms’ access to Korea’s automotive and pharmaceutical markets while restricting their own exports of steel to the United States by nearly one-third. In exchange, the Koreans received the first permanent waiver to the Trump administration’s until-now unrelated issue of steel and aluminum tariffs.

In addition, Trump has personally made it clear he has little intention of formally signing off on the deal until after the North Korean situation is resolved, insuring South Korea must follow the American preferences on any subsequent arrangements with Kim Jung Un, rather than the other way around.

It’s the first formalized, publicly-declared instance of American foreign policy coming full circle. During the Soviet standoff the Americans made the global oceans safe for all and kept the American market open to the alliance, in essence trading some of its economic power in order to purchase a security alliance. But the Cold War is nearly three decades gone now, and until recently the Americans had yet to update their strategic policy. As such, the post-Cold War global economic boom was largely a result of the Americans continuing to pay for a global system without getting anything in return. That disconnect was in part responsible for America’s recoiling from the world and the rise of Bernie Sanders and Donald Trump.

We now have the beginning of a formal re-engineering of the old Cold War system. Linkage between economic and security issues is back – but without the Cold War rubric to shape it, American policy is taking on a somewhat à la carte characteristic.

South Korea was a great spot for the first of a new series of arrangements. Next to the three tiny Baltic states that have no hope of defending themselves against their monster neighbor Russia, there is no country in the world that has a greater defense dependency upon the United States. And since South Korea has a smallish, rapidly aging population (aka low local consumption and so export-dependent) and few domestic resources (aka import-dependent), trade is its lifeblood. No country in the world would be forced to come to terms with the Americans more, and Korea’s position as the world’s fifth-largest exporter means everyone must take notice.

Whether starting with the Koreans was the goal all along, or the well-worn contours of geography and economics guided the administration a bit like a luge course to this destination is really not relevant. (Donald Trump’s general lack of discipline and revulsion in the face of context suggests the latter. U.S. Trade Representative Robert Lighthizer’s laser attention to detail and dogged persistence suggests the former. National Security Advisor John Bolton hasn’t been on Team Trump long enough to participate in the Korea trade talks, but this sort of thing certainly fits with his style, too).

The biggest question in my mind is, who’s next?

China seems like an interesting bet, but I’m guessing the Trump administration wants to get far more out of the Chinese than merely new understandings on steel, aluminum, intellectual property rights, and North Korea. The White House appears set to link a host of until-now unlinked issues. Issues like agriculture and freedom of navigation, manufacturing and the South China Sea, finance and hacking, market access and policies on Iran, reciprocity and Russian sanctions. It is a heavy list and even if the Chinese were to simply roll over on it all (which is not very likely) it would take quite a bit of time to work out the details.

In my opinion, folks convinced of the Chinese rise aren’t very good at math or reading maps. The Chinese financial system is the most overextended in history and every country that has followed its investment-led model has eventually crashed hard. The one-child policy has destroyed China’s future – it is now the world’s third-fastest aging demography. China’s strategic position is horrid – a line of islands parallels its coast, preventing it from projecting power into the sea lanes upon which its economy depends. It is utterly reliant on global energy imports and global merchandise exports – imports and exports which are under the thumb of the U.S. Navy.

The linkage the Americans are about to impose is the opposite of what the Chinese have become used to the Americans doing. It is precisely what the Chinese do to everyone else whenever the issue of Hong Kong or Taiwan or Tibet comes up. The Chinese are going to hate/fear this sort of strategic thinking in the United States because it cuts to the heart of the Chinese political system and strategic policy. And there’s far more to this than Beijing knowing they lack the leverage on the Americans to win. The Americans are in effect putting a dollar amount on their Korean alliance, and the same thing can now be done to any other aspect of American policy – including the China relationship.

The same general issue holds true for the European Union. Most of the European states are in terminal demographic decline, meaning that not only are they deeply dependent upon exports for their economic well-being, there is absolutely no hope their economic situation can be sustained, much less improved, without either the kindness of outsiders or a fundamental reshaping of how Europe defines the terms “economy” and “government.” Considering the European experimentation with those two terms in generations past, that last sentence should make everyone a bit twitchy.

And of course those are just some of Europe’s problems. There are also ongoing and deepening debt, banking, refugee, and political legitimacy crises. With neighboring powers – primarily Turkey and Russia – becoming more aggressive, the European choice is between once-again submitting themselves to American strategic goals, aggressively rearming in an era of terminal economic decline, or going through a regional…re-invention.

It’s an ugly choice, and one made far worse by a host of until-now unrelated issues.

  • Brexit not only reduces the EU’s overall heft and thus its stature in the world and at the negotiating table, but the UK acting as a free agent can and will provide the Americans with a host of wedge issues to hurt the Europeans where they are most vulnerable.
  • Of the EU’s 28 current members, five – Ireland, Cyprus, Austria, Finland and Sweden – are not in NATO, and so have little history in making formal economics-for-security swaps with the Americans.
  • Full competence for negotiating trade deals is held collectively with the European Commission, the EU’s executive/administrative/bureaucratic authority. But full competence for negotiating defense deals is held individually with the member states.
  • On major issues – for example, economics-for-security swap deals – every EU member has full veto rights. Even a deal that makes sense for France and Germany and Italy and Poland and Spain and the Netherlands and Sweden could be undone by a local election in Belgium (nearly derailed a free trade deal with the Canadians), or a spiteful politician in Greece (did derail Europe’s Russia policy).

That means that either a) the major EU powers find ways outside of EU norms to crush the dissenters, b) the EU gets cut out of American and global markets which throws Europe into a long-lasting depression, or c) the Trump administration breaks the entire EU in order to get its deal with the members that matter. No matter the path, the strategic alignments that have made the EU the vehicle that have made Europe united, at peace, wealthy and free are over.

Zocalo, Mexico City, Mexico

If anything, the NAFTA renegotiation will be even tougher, but here the issues are different. Canada and Mexico are not dependent upon the Americans for strategic overwatch (or, more accurately, the United States has no option but to protect its continental neighbors from extra-continental threats if it is to protect itself). Neither of them trade very much with the rest of the world, with both in essence functioning as de facto extensions of the American economic space.

The Americans can, will and are playing hardball in the talks, but the Canadians and Mexicans are doing the same. They know the tactics the Trump administration is employing to bring the rest of the world to heel just don’t apply in North America. Both Canada and Mexico have been (repeatedly) successful in courting American corporate giants and American state governors to make their cases in Washington for them. Remember that NAFTA is the only trade deal the Americans have signed in the post-WWII era that was not about security. That gives both Canada and Mexico something that neither the Chinese nor Europeans have: leverage.

It also means that the Canadians are playing very dirty, following what has more-or-less become a scorched earth policy. As part of Canada’s NAFTA strategy the Canadians have launched a case at the WTO that would actually hurt them if they won, because if they did win, the case would impose such pain on the Americans it would likely induce the Trump administration to abandon the WTO completely. Additionally, Canada’s hardball tactics might be aiming to wreck NAFTA. If that were to happen, Canada has a separate bilateral trade deal with the United States…but Mexico does not. In a world without the WTO and NAFTA, Canada would become the only country to maintain preferential access to the American economy. Harsh. Brilliant, but harsh.

But all these talks will take time. For the Chinese and Europeans, these are all very messy, complex, interwoven issues that cut to the core of issues of national identity and even national existence. For the Canadians and Mexicans the negotiations will continue to be difficult because with those countries the Americans are actually dealing with a more-or-less level field. The Americans with their stereotypical boorish, freight-train style will plow through it all as quickly as they can – and Lighthizer and Bolton will revel in every minute of it – but unweaving and reweaving the strands of China and Europe will take time, as will hammering out a more sustainable understanding within North America.

Trump isn’t that patient.

My bet is the next two deals will be bilateral and done more or less simultaneously.

Japan will be far easier than most of the other negotiations in front of the Americans because it will be a one-on-one talk as compared the multilateral complications of NAFTA and the EU. Japan – like South Korea – is deeply enmeshed into American defense networks and fully admits and realizes just how important U.S. strategic policy is to its own strategic needs (while most of the Chinese and Europeans remain in deep denial). Contrary to the conventional wisdom, Japan is no longer a massive trading nation. Rather than engage in broad-based economic and financial reform in the 1990s and 2000s to fix their broken economic model, they instead walled themselves off from the world. Consequently, Japan’s share of the international export market has shrunk by four-fifths since the 1980s.

Most importantly, the horror show that is Japan’s aging demography long ago induced the Japanese to forward-position much of their manufacturing capacity in their end-markets both to minimize currency risk and curry political and strategic favors. In essence, Japan has already swallowed some of this economics-for-security medicine in the post-Cold War era. It won’t crush their sense of national identity or their national economy to do it again, so long as the Americans continue to hem in places like North Korea and China.

The other big about-to-be deal is the United Kingdom, and this deal will practically fall into the Trump administration’s lap. Because of Brexit, the Brits are already casting out for alternative systems. The search has not been going particularly well. Political bungling at home, unrealistic expectations from the Leavers, a united EU front, and a resurgent and increasingly economically suicidal Labor opposition have tangled up the UK’s negotiating positions on pretty much everything.

The government of Prime Minister Theresa May now fully realizes that there is going to be no Brexit deal. It took considerable concessions to the EU simply to extend the negotiation period for another year. The new arrangement is that the UK will remain subject to all relevant EU laws and regulations, but will gain no input or votes on them during the “transition.” The one concession London teased out is the one most relevant to this discussion: the EU will allow the UK to negotiate trade deals outside of the EU’s authority. So the Brits now need to and are free to fully recalibrate their national, regional and global security and economic norms just as the Americans are reforging national, regional and global security and economic norms.

If the Trump-Lighthizer-Bolton team can induce (browbeat?) the world’s third- and fifth-largest economies which control the world’s second- and third-largest navies into joining the United States in a refashioned economics-for-security arrangement, then not only will the Trump administration have gotten a couple “big wins,” but the global stage will be set for whatever strategic alignments come next.

This is the bit that worries me, but it is also the bit that I ultimately expected.

The established American foreign policy community, both in the government bureaucracy and distributed throughout Washington, is still living in the past and seems out of ideas. For its part, the Trump administration has no strategic vision; MAGA is a slogan, not a policy. The normal means of debating a new national grand strategy – discussion and debate between the major parties – is not possible because both parties are currently broken.

Trump may be stumbling/groping/learning his way into a common approach, but he is doing so without any guiding principles or goals. The Cold War structure was stable because the Americans paid everyone the same (by creating a global structure) and expected the same behavior in return (membership in the anti-Soviet alliance).

This time around the Americans are customizing the membership fee to match the need. For South Korea the cost is deference on North Korea. For China it will likely be deference on global policy. For Europe it will likely include a demand to follow American regulatory norms. And as the Americans are strategically unmoored, I see no reason why the goal posts won’t move as America’s perceived self-needs evolve. It is less the stuff of a global leader and more the behavior of a mafioso.

There’s a reason I call the next couple of decades the “Coming Disorder.”

Read more about it in my book, The Accidental Superpower.