President Trump sacked his national security adviser Mike Waltz because he was working with a foreign leader to push the United States to attack Iran, according to a new report in the Washington Post.
The Post reports that while including a journalist on a Signal chat about plans to attack Yemen’s Houthis sealed Waltz’s fate, Waltz initially “upset” Trump during Israeli Prime Minister Benjamin Netanyahu’s White House visit in February when he “appeared to share the Israeli leader’s conviction that the time was ripe to strike Iran”:
Waltz appeared to have engaged in intense coordination with Netanyahu about military options against Iran ahead of an Oval Office meeting between the Israeli leader and Trump, the two people said.
Waltz “wanted to take U.S. policy in a direction Trump wasn’t comfortable with because the U.S. hadn’t attempted a diplomatic solution,” according to one of the people.
“It got back to Trump and the president wasn’t happy with it,” that person said. [...]
The view by some in the administration was that Waltz was trying to tip the scales in favor of military action and was operating hand in glove with the Israelis.
“If Jim Baker was doing a side deal with the Saudis to subvert George H.W. Bush, you’d be fired,” a Trump adviser said, referring to Bush’s secretary of state. “You can’t do that. You work for the president of your country, not a president of another country.”
Since Trump announced that he would engage in serious negotiations with Iranian leaders to place limits on Iran’s nuclear program, an intense battle is being waged between the president’s more loyal supporters who favor diplomatic engagement with countries like Iran, Russia, and North Korea, and the more traditional wing of the Republican Party and neoconservatives, who don’t want a deal with Iran and are instead pushing for war.
Some of these battles surfaced before talks began, for example during the nominating process, when establishmentarians vigorously opposed more restraint oriented nominees like Tulsi Gabbard and Elbridge Colby. While their nominations ultimately succeeded, Waltz’s ouster is another sign that perhaps the hawks in Washington and their allies abroad may not have the juice they once had in keeping the United States on permanent war footing.
Ben Armbruster is the Managing Editor of Responsible Statecraft. He has more than a decade of experience working at the intersection of politics, foreign policy, and media. Ben previously held senior editorial and management positions at Media Matters, ThinkProgress, ReThink Media, and Win Without War.
Steve Witkoff and Mike Waltz shake hands with Israeli Prime Minister Benjamin Netanyahu (White House Flickr)
A spat over the return of 6,000 Ukrainian bodies lays bare the unforgiving economic and political challenge that Ukraine faces in bringing home its fallen, and the political storm that President Zelensky will face when the war finally ends.
The second round of the Istanbul peace talks on June 2 led to an agreement for Russia and Ukraine to exchange 6,000 bodies. On Sunday, June 8, a convoy of Russian refrigerated lorries arrived at the agreed meeting point in Belarus, with over 1,000 bodies, but the Ukrainian side did not show up. It is not clear that June 8 was the agreed date for the body swap to start, and Ukraine claims that the exchange was due to take place three days later, on June 11. The exchange has now happened, with 1212 Ukrainian soldiers’ bodies exchanged for the bodies of 27 Russians.
A war of words has erupted about who’s to blame. Russia is trying to paint the Ukrainian side as trying to deceive its public on the true scale of battlefield losses, while Ukraine accuses its opponent of playing political games.
Families on both sides will want their deceased relatives back to lay them to rest. I personally recall the huge media backlash in Britain over the delay in repatriating bodies of the 131 Britons killed in Thailand by the Boxing Day tsunami in 2004, having been personally involved in the recovery effort.
Ukraine’s challenge is greater by many magnitudes; it will take years, not months, to identify every fallen Ukrainian service man and woman. The victim identification process for the 3,000 western tourists killed in Thailand in 2004 took well over a year. That involved a huge international team of police and forensic experts, collecting samples from the corpses. There was an equivalent network of professionally qualified police family liaison officers gathering ante-mortem data (fingerprints, hair strands, dental records, etc.) from the homes of those thought to be deceased and keeping worried relatives up to date with progress.
It’s clear from the Russian negotiator’s statement that not all of the 6,000 bodies due for exchange have identifying documents, such as dog tags, most likely related to the terrible nature of their injuries: after the 2002 Bali bombing, many of the 202 killed had missing body parts, massively complicating the identification process.
Even when the bodies are intact and have been stored well, a reliable visual identification will be impossible. It is very common for searching relatives to identify a corpse and claim it as their family member out of emotional desperation. I had a colleague at the British Embassy in Bangkok who was killed with his three children by the 2004 tsunami. He was survived by his wife who tragically misidentified one of the children at an open-air mortuary site.
I’ve seen no evidence that Ukraine has the institutional capacity or resources to mount a body identification operation at this scale for the bodies already in their possession. And the assistance of western police and forensic specialists will be impossible while war rages.
In October 2024, the Economist revealed that Ukraine’s Commissioner of Missing Persons had a list of over 48,000 who are still missing together with 2,552 bodies that had yet to be identified. Those numbers will be higher today, eight months down the track.
Some commentators have seized on the enormous cost in compensation to the families of the deceased. There have been widespread social media posts that Ukraine will have to pay around $2.1 billion in compensation to the families of the 6,000, but this figure is, in fact, too low. Ukraine’s Cabinet of Ministers agreed in September 2024 to increase the one-off payment to the families of the fallen to around $544,000. So the compensation figure for the 6,000 soldiers will run to $3.6 billion in an already overstretched Ukrainian state budget which is being subsidized by western nations. And this marks just the tip of the iceberg.
Western intelligence officials suggested in late 2024 that around 80,000 Ukrainian troops may have been killed. Assessments in alternative media tend to be higher. But if we use the number circulating in mainstream media and fast forward six months to today, let us speculate that 100,000 Ukrainian troops have died so far. If you take the 50,000 Ukrainians considered missing or unidentified and the 43,000 troops that Zelensky said had been killed in December, that number feels close to the mark. One hundred thousand dead represents a total cost in one-off compensation payments to families of $54.4 billion.
And the problem runs deeper than that. Intelligence officials from the same source also claimed up to 480,000 injuries to soldiers. Let’s say that figure is 550,000 today. Ukraine also pays between $180,000 and $290,000 for injury and disability. If only 20% of the reported injuries attracted the lowest tariff of one-off disability payment, that would add an extra $19.8 billion to the compensation bill. If it were 50%, $40.5 billion, and 80%, $79,2 billion.
So, even if the war were to end today, Ukraine could be staring down the barrel of a compensation bill, even on a conservative estimate, of over $130 billion. To put that into context, Ukraine is expected to generate $48.2 billion in tax revenue in 2025. Anyone who believes that Ukraine will not ask western donor nations for support in meeting this bill is fooling no one but themselves.
The vastly inflated cost of compensating victims and families of the fallen may reflect a wider effort to encourage more to take up military service. All this against a background of still severe recruitment shortages and desperate tactics used by recruitment officers, including dragging men off the streets.
In a bid to encourage men to fight, the most junior soldiers in the firing line are paid well over ten times the average salary in Ukraine. That includes a basic salary of almost $4,593 per month for troops on the front line, and all troops receive a payment of around $1,700 for every cumulative 30 days spent in combat. The latter sum also, terrifyingly, talks to the short life expectancy of those on the front line. Early in 2023, a former U.S. Marine claimed that the average life expectancy for recruits on the frontline was four hours. And, of course, extremely high rates of pay while war rages pose a major political challenge when the fighting stops and front-line soldiers take a near 89% reduction to non-combat pay of $494 per month.
Some commentators have argued that Ukraine might be incentivized to slow the identification of bodies to delay payments to relatives. That is an oversimplification that misses the true scale of the task that Ukraine faces.
The living nightmare for heartbroken relatives waiting to lay their loved ones to rest seems certain to continue for years to come. This may impose a devastating political cost on President Zelensky far greater than the towering and unaffordable economic cost of fighting a losing war.
keep readingShow less
Top photo credit: A trader works on the floor of the New York Stock Exchange shortly before the closing bell as the market takes a significant dip in New York, U.S., February 25, 2020. REUTERS/Lucas Jackson/File Photo/File Photo
For years now, the United States has justifiably wanted its allies to pick up a bigger share of the burden of their own defense.
But as America now asks its partners to boost military spending to 5% of GDP, the sheer scale of these demands — especially on allies in East Asia — could push yields higher on U.S. Treasury bonds at a time when they are already under pressure by skeptical global bond investors and ratings agencies.
Back in 2018, President Trump wrote a letter to key NATO allies warning that the failure of major European members to meet a pledge to spend 2% of GDP was “not sustainable.” Russia’s invasion of Ukraine in 2022 pushed spending somewhat closer to that mark, and a recent sharpening of transatlantic differences on a host of other issues has led to a pledge by Berlin to increase spending on defense and infrastructure by no less than one trillion euros over the next decade.
America’s Asian allies should look to countries in Europe as a new-found example, Defense Secretary Pete Hegseth advised in his speech halfway around the world at the Shangri-La Dialogue in Singapore at the end of last month. “NATO members are pledging to spend 5% of their GDP on defense, even Germany,” he claimed, even if the actual details fall somewhat short of the promise.
Meanwhile, there is rising concern about events in U.S. bond markets where 30-year yields are approaching 5% alongside a falling dollar, an unusual combination that has not been seen in decades and one more commonly associated with emerging markets in the Global South.
And last month, ratings agency Moody’s downgraded the U.S. from its highest AAA rating, the last of the three major ratings agencies to do so. Drawing attention to a troubling debt trajectory, the agency said it expects “persistent, large fiscal deficits will drive the government's debt and interest burden higher. The US' fiscal performance is likely to deteriorate relative to its own past and compared to other highly-rated sovereigns.”
Moody’s focus on interest payment ratios suggests a key dynamic at play here — the combination of a large stock of debt with high interest rates pushes up the U.S. government’s interest rate burden, which, in turn, causes the stock of debt to grow even faster. And in a world with large flows of cross-border financial investment, what happens in one country’s economy and markets can easily spill into others.
In other words, the interest rate on U.S. government debt depends not just on the supply and demand for such debt within America, but throughout the whole world. Foreign holders accounted for roughly 30% of all Treasury debt in public hands at the end of 2024, holding $8.5 trillion of $28.1 trillion outstanding, with roughly 55% of such holdings in foreign private hands. For close to three decades now, public and private foreign demand for U.S. Treasury debt has helped hold U.S. interest rates lower than they might otherwise have been.
All of this could change in a hurry, driven in good part by Washington’s desire to shift patterns of global defense expenditure. As suggested in Hegseth’s remarks, not only does the White House want the U.S. to spend more; it also wants a massive ramping up in defense spending by all its allies, including Japan, Taiwan, South Korea, and other key partners in Southeast Asia, among others.
According to the Treasury’s latest report on foreign holdings of U.S. securities, the three East Asian allies held roughly $1.5 trillion, $650 billion, and $200 billion of long-term debt securities, respectively (largely Treasuries and mortgage-backed securities issued by the Government-sponsored agencies Fannie Mae and Freddie Mac).
Military spending increases around the world on the scale that the administration is pressing for could push up U.S. bond yields further, as allies borrow and spend more on their own defense, creating alternatives that can compete with Treasuries for global investors’ favor. Investors in U.S. allies might prefer opportunities closer to home and could also be subject to suasion by their governments to favor domestic bonds. Rising Treasury yields in turn could exacerbate concerns over the role of interest payments in the growth of U.S. government debt.
And, of course, bond yields are also a key driver of mortgage rates and thus of developments in the housing market — a key pillar of America’s political economy.
There could well be other factors in play that contribute to a reduced demand for U.S. assets. Sanctions and the impounding of Russian reserves helped lead to increased central bank demand for gold. And concerns about the unpredictability of U.S. trade policy have led even staunch allies like Japan’s finance minister to publicly muse about the leverage that country might hold through its ownership of U.S. bonds.
These impulses have not gone unnoticed in Washington, even as the administration’s own desires point in a few contradictory directions. It wants other countries to run smaller trade surpluses (implying less money to invest overseas) and take on more of the burden of their defense. At the same time, it wants the fiscal benefits of the low interest rates that derive from their subdued growth and their purchases of U.S. government debt, in addition to measures that increase American growth and revenues.
It is unclear how far such efforts will go given likely reservations in other countries about the extent to which they can depend on Washington, and the degree to which they see that broader economic and geopolitical interests are consistent with those of the United States.
Under such circumstances, rather than push for sharp increases in defense spending quickly, Washington could best meet its various goals by asking for a gradual increase in the share of the defense burden that is borne by its allies, even as it relies on diplomatic engagement to reduce the fiscal weight of that burden and supports and encourages their efforts to do the same.
Such a path would help reduce the risks to the United States and the world from a simultaneous rise in geopolitical and financial tensions.
keep readingShow less
Top image credit: Chinese Navy (Massimo Todaro / Shutterstock.com)
Taiwan has become a focal point for the U.S.-China conflict, with the Pentagon turning its attention towards a hypothetical conflict with China — referring to it as the “sole pacing threat” — and Chinacontinuingcombat and blockade drills around the island.
However, despite China’s demonstrations of military power, Taiwan’s unique economic niche and geographic position make it a particularly thorny target for Beijing. The Chinese Communist Party’s legitimacy rests largely on the robust economy it has built, and the direct economic repercussions of an invasion or blockade of Taiwan stand to shatter the foundations of Beijing’s domestic power.
There are three non-military conditions that make a full military assault or blockade of Taiwan a nonviable option for the CCP. First is the global importance of Taiwan’s semiconductor manufacturing base, second is the impact on trade and the shipping industry running through the Taiwan Strait and Luzon Strait, and third is China’s own less-than-favorable economic conditions.
The semiconductor issue
Taiwan is the largest manufacturer of semiconductors in the world. In the fourth quarter of 2024, Taiwan Semiconductor Manufacturing Co. (TSMC) —Taiwan’s largest producer of semiconductors — took a 67.1% market share of all chips globally, and produced nearly all of the most advanced chips. There is no viable replacement for Taiwan’s manufacturing in the semiconductor market; not only does the nation represent a massive share of the chip industry, its infrastructure uniquely supports the scale and quality of production.
Semiconductors represent an irreplaceable enabler of global economic activities. If Taiwan were to stop producing chips, both the American and Chinese economies — not to mention the world economy — would contract and ignite a global depression. Chips enable electrical grids, manufacturing, home utilities, automobiles, and more; they have permeated every facet of the global economy.
Semiconductors are not an end in themselves, they are a means to an end, enabling innovation and emerging technologies like AI and robotics. Taiwan’s dominance in this critical market is referred to as its “silicon shield,” which means that the U.S. and China are invested in protecting its output.
An offensive or blockade against the island nation would have a profound global economic impact. The most important global economies rely on the chips manufactured in Taiwan. With demand for chips only growing, losing Taiwan's manufacturing base could throttle global supply chains for years to come.
Inefficacy of military action
Chinese military action would disrupt the global commerce running through the Taiwan and Luzon Straits. The straits on either side of Taiwan are thoroughfares for international trade, with Taiwan’s own ports handling $586 billion in trade in 2022, and an estimated $2.45 trillion transiting the strait in the same time period. Besides Taiwan, China’s ports are most likely to be impacted, with ships diverting from the ports along China’s eastern coast.
While global shipping lanes can likely divert around a conflict zone without significantly raising prices, China’s role in maritime shipping infrastructure means that conflict would have a direct negative impact on some of China’s most lucrative ports and port cities, with ships no longer making stops along a broad swath of the coast.
Ships will not be able to access the extensive network of maintenance and repair sites along the Chinese coast, as well as cargo processing sites. The loss of access to some of these ports would have knock-on effects for the global shipping industry if there is a protracted conflict or blockade, leaving remaining ports to deal with the spillover.
Geopolitically, China would have to reckon with the Global South and BRICS nations, whose trade relies on the straits even more than the G7. Given that China is courting these nations diplomatically, impeding their trade could set off a diplomatic fiasco that Beijing would likely want to avoid.
Already poor economic conditions
China is not in a strong economic position as it has been reined in by the lingering aftereffects of its real estate crisis, subdued domestic consumption, and the impacts and uncertainty created by the trade war’s tariffs. Kicking off a global crisis would likely exacerbate the economic issues it currently faces. Furthermore, Taiwan represents up to 60% of China’s own chip imports. If China attacks Taiwan it stands to cripple its own industries by starving them of chips. Besides chips imports, the PRC is heavily dependent on trade — comprising 37% of its GDP — making it even more vulnerable to disruptions in global trade.
According to a study done by Bloomberg Economics, in the event of a blockade, global GDP would be down 5%, with China and the U.S. seeing shrinkage of 8.9% and 3.3%, respectively. And in the event of an invasion, global GDP would be down 10.2%, with South Korea, Japan, and other East Asian nations seeing the worst of the impact. The resulting $10 trillion price tag on merely the first year of the crisis incentivizes the stakeholders to avoid confrontation. If any or all of Taiwan’s foundries are destroyed, the impact would be even greater and the economic depression would last for a decade or more as nations attempt to build out their own profitable foundries. Not to mention that this would likely create a permanent rift between China and trade with the U.S. and the EU.
While both China and the U.S. attempt to relieve their respective reliance on Taiwanese chips through domestic production, Taiwan retains its most advanced nodes on its territory in order to maintain global dependence on its chips industry. Cajoling from both the U.S. and China has brought TSMC investment and factories to both nations, but these nodes do not represent a viable replacement for Taiwan’s output.
***
Given these three factors, China would have to be certain that it would be able to take Taiwan quickly, and with minimal damage to the delicate foundries and their personnel. With an ongoing purge of the PLA due to corruption concerns, it seems there is either widespread corruption or a political purge, both of which put a damper on readiness. If Xi’s generals are corrupt that means readiness isn’t where it should be, if it’s a political purge then it impacts morale and cohesion.
If Taiwan shapes itself into a high-stakes/low value target it can remain largely untouchable because of the economic structures surrounding it. These economic shields could compound if Taiwan engages in military strategies such as becoming a “porcupine,” to make itself a hard military target as well — engaging in anti-access/area denial strategies with high volumes of antiship missiles, sea mines, and air defense systems.
Taiwan's main value to China is through its nationalistic claims to the island. China’s issue with Taiwanese independence also hinges on U.S. assurances that it will not deny China access to the lagging edge chips Taiwan’s foundries export to China and that it will not separate the island from the mainland.
As long as the island does not move towards independence and continues to “porcupine,” the structural economic factors play to the island's advantage, making it easier for the Chinese to ignore the situation, for now, to maintain the favorable economic conditions of the region.
Subscribe now to our weekly round-up and don't miss a beat with your favorite RS contributors and reporters, as well as staff analysis, opinion, and news promoting a positive, non-partisan vision of U.S. foreign policy.