Friday News Roundup — February 4, 2022
Friday greetings from Washington, D.C. First, we join in wishing New Mexico Senator Ben Ray Luján the best as he recovers. While there will be plenty of analysis of the 50–50 Senate and what this means for the legislative agenda, what is most important is Senator Luján’s health. There is plenty on that agenda, with the House passing the America COMPETES Act, which expands on the bipartisan USICA legislation passed in the Senate. Unlike the Senate legislation, it came from a far more partisan process in the House.
With 14 days remaining, we also have our eyes on a potential budget deal. All of this comes with the domestic news of a far hotter than expected jobs market — strengthening the case for Fed rate hikes — and the international tensions with more troops headed to Europe. While the world gathers for the Winter Olympic Games in Beijing, we salute the world’s athletes and their endeavors. It is a shame that their amazing feats will come on the stage of a showcase for a brutal regime.
In the media this week, Glenn Nye & Mike Rogers wrote of how the challenge posed in Ukraine is an opportunity to strengthen our resolve by reaffirming our alliances and restoring bipartisanship to national security. Dan looked at how a pending action by the Department of Justice could significantly weaken patent policies, with major Geotech ramifications. CSPC Senior Fellow James Kitfield provided his analysis of the dilemma facing Putin: invade or not? This week, Joshua also reviewed Elizabeth Economy’s new book “The World According to China” for the Diplomatic Courier.
In this week’s roundup, Joshua opens with a look at rumored false flags and the information war surrounding Russia’s threats to Ukraine. Wes covers how the west is managing its diplomatic coalition vis-a-vis Moscow. Robert looks at where the U.S. stands in the race for electric vehicle leadership. As always, we wrap with news you may have missed.
False-Flags, Russia, and the Information War
Joshua C. Huminski
On Thursday, American officials reported that Russia was preparing a false-flag operation alleging an attack by Ukrainian forces to use as a pre-text for an invasion. According to reports, Russia would fabricate a graphic video suggesting that Ukrainian forces attacked civilians in multiple locations in Eastern Ukraine. The video would include Ukrainian military equipment, Turkish drones, and even Russian-speaking mourners. Reporting suggests that the video had not yet been produced, but was in a pre-production phase.
As of this writing, American officials did not indicate how they came about the intelligence about this plot, which is alleged to have been approved at the highest levels of Russian intelligence. That this is not being disclosed is unsurprising, as it could well jeopardize sources and methods. Yet, ironically, the very fact that the intelligence is both being declassified and publicly briefed could well compromise those very sources and methods. Separately, British officials conducted their own analysis of the intelligence and indicated that it is “credible and extremely concerning.”
A steady drum-beat of intelligence alleging Russian intentions and operations has flowed from unidentified American officials. In January, U.S. officials warned of sabotage operations planned by Moscow in Ukraine, suggesting that there were “operatives…trained in urban warfare and in using explosives to carry out acts of sabotage against Russia’s own proxy-forces.” The following week, British officials accused Moscow of planning a to install a pro-Russian government in Kyiv, going so far as to identify individuals already selected for key posts.
These selected releases (or leaks) are part of an effort by Washington and London to get ahead of Russia’s information war and to expose the narratives Moscow is advancing when it comes to the Ukraine crisis. By publicizing the alleged plans, the U.S. and UK are hoping to blunt the effectiveness of these information efforts and detail Moscow’s aims.
Information warfare is something that the Kremlin has, historically excelled at, targeting three different audiences — the target population (the Ukrainians, in this case), the international community, and, finally domestic audiences.
In the case of the latter, Moscow enjoys more or less dominance over the domestic narrative. A false-flag operation alleging Ukrainian complicity in an attack on ethnic-Russians or Russia itself would clearly be used to mobilize its own population to support the retaliation. This is perhaps of the greatest importance. For as much as Putin is portrayed as an authoritarian, he cannot operate without the support of the population and, indeed, is quite concerned about at least about the appearance of popular support.
The Kremlin conducts its own regular polling of popular sentiment about the government and its policies, and even in a personalist autocracy as Timothy Frye characterizes the Russian government, an unpopular war will have significant consequences. If Russian soldiers return from Ukraine in the zinc-lined coffins (as they did in Afghanistan) in large numbers, sustaining a war with Kyiv, or a post-invasion occupation, will become increasingly difficult.
In terms of the international audience, it is a matter of creating noise and obfuscation, delaying or confusing a response. In Crimea, the alleged “little green men” or “polite people” as Putin called them, created just enough confusion as to what was actually happening on the ground to delay an international response, or, rather, created a sufficient excuse to avoid actually acting. In the 2014 shoot-down of MH17, Russia sought to swiftly create so much noise, so much confusion, and so much fake news as to introduce sufficient doubt as to whether Russia was involved in the incident at all. Open source intelligence, largely conducted by Bellingcat, dismantled the narrative that the Buk missile launcher was not supplied by Russia to separatists in eastern Ukraine.
With this present crisis, the West’s continuous release of information on Russian intentions, aims, or movements is intended to undermine the Russian narrative and stay ahead of Moscow’s political warfare campaign. How successful that is, remains to be seen. It is highly unlikely that Washington and London’s release of information will dissuade Moscow from acting. The Kremlin does not need an excuse or a pretext to act if it truly wants to do so — a political fiction can be useful, but mainly for a domestic audience. At this stage, any alleged attack will undoubtedly be suspect and doubted from the beginning. Kyiv has absolutely no incentive to provoke Russia.
For the target population, Ukraine, the steady drumbeat of intelligence about possible plots, false-flag operations, and the mobilization of forces along its border is contributing to unease and, in the case of President Volodymyr Zelenskyy of Ukraine, concern that the crisis may be developing its own sense of inertia and momentum. Indeed, Zelenskyy pushed back on the imminence of the crisis saying “I’m the president of Ukraine and I’m based here and I think I know the details better here.”
Could the release of information drive Russia to act, as some suggest, by limiting Putin’s options and freedom of movement? This is unlikely. It is unclear what Russia will do with the 100,000+ troops presently mobilized, but he is not going to be constrained or spurred to act simply because Washington releases (or leaks) information about Russia’s capabilities or intentions.
In any case, the continued selective use of this intelligence is interesting, and likely one of the most aggressive and preemptive intelligence campaigns in recent history.
Western Diplomacy Scrambles as Russian Deployment Continues
Wes Culp
As the crisis surrounding the positioning of Russian military formations along Russia’s border with Ukraine enters the second month of 2022, resolution to the crisis does not appear to be immediately within reach. The diplomatic back-and-forth between Moscow and Washington has failed to defuse tensions. In order to shore up NATO’s eastern flank and calm the fears of NATO’s most eastern members, additional American troops have been ordered this week to deploy from Germany and bases in the continental United States to Romania and Poland. Russia’s troop deployment on its border with Ukraine has continued throughout, with military exercises due to kick off with Belarus next week near the country’s border with Ukraine.
Russian leaders claimed that the United States did not seriously consider Russia’s request to keep Ukraine out of NATO and a commitment to not station troops near Russia. In a joint press conference with Hungarian Prime Minister Viktor Orban, President Putin alleged that the United States was trying to provoke a war with Russia, and that it had entirely ignored the core tenets of Russia’s demands. Russian Foreign Minister Sergei Lavrov, on the other hand, took a new approach: urging Western adherence to a charter agreed upon by Russia and other OSCE members at the organization’s 1999 summit. In invoking the 1999 Charter for European Security, neither Lavrov nor other leading Russian officials mentioned their own country’s buildup on the border with Ukraine — itself a violation of the cited agreement. Meanwhile, Russian media began on Wednesday to promote an article written by President Putin for China’s Xinhua News Agency that endorses the strengthening of ties between Moscow and Beijing. Putin highlighted the high level of trust between Russia and China across sectors and declared that relations between the two countries has reached a “new era,” a potential signal to the West that it would be able to cope with significant sanctions with Chinese help.
Wednesday also saw an announcement from the White House that 3,000 American troops would be sent to Romania and Poland to bolster NATO’s posture there. 1,000 American troops currently based in Germany will be sent to Romania, while 2,000 U.S.-based troops will be deployed in Germany and Poland. In response to this announcement, Russian presidential Press Secretary Dmitry Peskov said that the American troop deployment represented a reason for Moscow to “worry,” even as a Russian force more than 30 times that size is currently positioned near Russia’s border with Ukraine. In a Tuesday call with Foreign Minister Lavrov, U.S. Secretary of State Anthony Blinken urged Russia to withdraw its forces massed on the border with Ukraine if President Putin “truly does not intend war or regime change.” The UK has also expressed intent to dispatch a new contingent of its own to NATO’s eastern flank to augment the 1,150 British troops already there with the aim of “supporting” Ukraine. Poland, the UK, and Ukraine intend to form a trilateral defense partnership in order to reinforce regional stability and cooperation.
The United States’ announced deployment has happened alongside a flurry of state visits by NATO country leaders to Moscow and Kyiv aimed at defusing the crisis. A Thursday visit by Turkish President Recep Tayyip Erdogan saw the Turkish leader offer to mediate the crisis between Ukraine and Russia. Ukrainian President Volodymyr Zelensky and President Erdogan also inked agreements on bilateral trade and the manufacture of Turkish drones in Ukraine. A visit to Kyiv by Polish Prime Minister Mateusz Morawiecki saw him offer both diplomatic support as well as military aid to Ukraine on Wednesday. Dutch Prime Minister Mark Rutte similarly added his support for Kyiv while promising cybersecurity and humanitarian assistance to Ukraine in his own meeting with President Zelensky in Kyiv. The Dutch visit had been planned further in advance, as the meeting originally was intended to discuss the 2014 Russian downing of Malaysian Airlines flight MH17, which killed 193 Dutch citizens. British Prime Minister Boris Johnson also visited Kyiv on Tuesday to promise that a renewed Russian invasion of Ukraine would trigger massive sanctions on Russia’s “interests and economy.” He also highlighted ongoing military aid to Ukraine and a promised package of $119 million to fight corruption and help Ukraine become energy-independent from Russia.
Johnson also spoke with President Putin by phone on Wednesday in an effort to defuse the threat of invasion, and warned Putin that significant consequences would follow if President Putin were to attack Ukraine. The Prime Minister’s call had been delayed as Johnson has become embroiled in investigations on his alleged violation of COVID-19 restrictions. On a self-described “peace mission,” Prime Minister Viktor Orban visited Russia to meet with President Putin, where he raised the prospect of increasing deliveries of Russian gas to his country. In a follow-up to his trip planned for this Sunday and Monday, German Chancellor Olaf Scholz also intends to meet with President Putin, where he will attempt to pursue the German strategy of discouraging aggression while seeking dialogue.
It does not appear that a sustainable settlement is imminent. Russia’s maximalist demands and insistence on only interfacing with the United States to secure its objectives in Ukraine naturally distorts negotiation. While the West has begun to close ranks in support for Ukraine, it is too early to tell if such measures will be able to stave off further Russian invasion — if that is Moscow’s intention. As Russia’s buildup continues, Western leaders and diplomats will continue to wrestle with the prospect of a significant conflict in Europe erupting in the near future, even as Ukrainian leaders have downplayed that prospect in an effort to calm their citizens and the domestic business climate.
The Global EV Race: How is America Fairing?
Robert Gerber
President Biden announced in August 2021 a target of 50% zero-emission vehicles on the road by 2050. Underpinning this announcement is the view that transitioning to electric vehicles (EVs) addresses two critical national challenges: competing with China and mitigating global climate change.
The United States, Europe, and China are the major competitors in a global EV race. The following is a quick look at how the U.S. is faring in this race, based on three vectors: manufacturing, innovation, and adoption.
Manufacturing:
Global EV sales (including battery-electric and plug-in hybrid) combined doubled last year to around 6.6 million vehicles. California-based Tesla is currently the world’s largest EV manufacturer, delivering almost 1 million vehicles in 2021 (disclosure: the author is a Tesla stockholder). It has factories in the U.S., Europe, and China and has begun to build its own batteries at its Nevada gigafactory. Renault, VW Group, Stellantis, and Chinese manufacturers BYD, Nio, LiAuto, and Xpeng follow — with the latter experiencing 222% growth in recent months. GM and Ford have recently announced dozens of new EV models. But gauging the state of manufacturing requires a look at the entire supply chain. Six companies dominate global EV battery production: CATL (China), BYD, Panasonic, Samsung, and SK Innovation. China is currently the world’s largest battery producer and also hosts a majority of the world’s facilities that process the materials — cobalt and lithium as well as specific chemicals — that make batteries. The U.S. Department of Energy estimates the United States will need 20 to 40 gigafactories over the next 15 years to meet demand.
Innovation:
Production at scale is not the only thing important to the success of these car companies in the EV race. They also need to be able to innovate, e.g. strategically leveraging R&D dollars to produce lighter, high-range, more efficient batteries and vehicles. This is particularly important in a landscape of rising materials prices and supply chain shortages. Last year saw a doubling of prices increases for lithium, nickel and other metals, alongside chip shortages. International Energy Agency (IEA) noted “supply side bottlenecks are becoming a real challenge to the electrification of road transport and are adding to traditional demand side challenges.” To gain strategic advantage in the global EV race, China has subsidized its domestic auto sector and pursued purchase contracts for supply of critical minerals. But this doesn’t mean the U.S. will be left behind: U.S. private equity markets have delivered record sums of cash to Tesla, Rivian, and Lucid Motors, while Ford and GM have announced they plan to invest $35 billion and $30 billion respectively into electrification between now and 2025. This will enable critical R&D that could reduce dependency on Chinese supplies and help put lower-priced EV into the hands of U.S. customers — if they want them.
Which brings us to adoption:
The United States — the world’s second largest vehicle market — lags China and the EU in terms of EV market penetration (portion of EVs on roads). High prices and concerns about vehicle range and a lack of charging stations has curbed broader EV adoption stateside. But EV sales (including plug-in hybrids) are growing, albeit within a niche market of high earners with garages. Leading by example, the Biden Administration plans to convert 600,000 of the federal government fleet to alternative fuels. And on February 2, the White House and the EPA sent a letter to the U.S. Postal Service questioning USPS’ contract to purchase 165,000 new internal combustion engine (ICE) postal trucks. The recently passed bipartisan infrastructure bill earmarked $7.5 billion for 500,000 charging stations. But industry has expressed concerns about the types of chargers the government would install and their locations. There are other areas for improvement in terms of government policy. The Build Back Better legislation would have extended tax credits for EV customers and provided tax incentives for EV production — but only in union factories. This is a shortsighted move that cuts out a significant portion of auto plants in non-union states. The Transportation Department’s latest iteration of the 1975 Corporate Average Fuel Economy (CAFE) regulations raises fuel economy targets for manufacturers but also preserves the loophole for so-called “light trucks” — which has over the years contributed to the rise of high-consumption trucks and SUVs. Of course, raising the gas tax would be the most effective way to speed transition to cleaner vehicles — but this is taboo for any politician in an era of high inflation. Consultancy EY summed it up as follows: “Today’s low oil prices are also contributing to the EV slowdown, since they significantly lower the total cost of ownership for vehicles powered by internal-combustion engines (as compared with EVs).”
The IEA assessed that government policies remain the key driving force for global electric car markets, but 2021’s EV growth “also reflects a very active year on the part of the automotive industry.” According to Steve Cohen at Columbia University, what’s needed is “a practical path and a public-private partnership tied to a critical and shared national mission.” This mission, which will be decades long, should encompass manufacturing, innovation, and adoption of low emissions vehicles — including innovations for ICEs, which will be here to stay for a while. These moves will pay dividends in terms of U.S. economic competitiveness and meeting national climate goals.
News You May Have Missed
President Biden Faces Criticism from Some Republicans Over the Ukraine Crisis
Some Republicans are questioning President Biden’s decision to aid Ukraine arguing that supporting Ukraine in the face of Russian threats is not in the U.S. national interest. GOP Members of Congress closely aligned with former President Trump have argued that the United States should not be involved in a Russia-Ukraine dispute and should instead focus on domestic issues, such as rising inflation, combating COVID-19, and fixing the criminal justice system. Rep. Matt Rosendale (R-MT) said, “A nation that cannot effectively secure its own border and protect its own territorial integrity cannot be responsible for doing so for nations in Eastern Europe.” Inspired by former President Trump’s targeting of Hunter Biden, some Republicans are claiming President Biden’s actions are based on self-interest due to his son’s past business affiliations in Ukraine. Nevertheless, GOP leadership are working with Democrats to develop a legislation that would allow the U.S. to inflict further sanctions on Russia in the event that country initiates further hostilities against Ukraine.
Kremlin Speaks with Chechen Leader Following Extrajudicial Threats
Earlier this week, Adam Delimkhanov, a member of Russia’s parliament representing Russia’s largely autonomous Chechen Republic, threatened to behead members of Chechen anti-torture activist Abubakar Yangulbaev and Saydi Yangulbaev, a former federal judge. On Thursday, the Kremlin confirmed that Russia President Vladimir Putin had met with Ramzan Kadyrov, the head of Chechnya. The endorsement of Delimkhanov’s statements by senior Chechen law enforcement officials coincided with what appeared to be a massive rally against the Yangulbaev family in the Chechen capital of Grozny. While Presidential Press Secretary Dmitry Peskov did not divulge many details of the discussion between Kadyrov and Putin, he said that they spoke about “applied economic affairs and issues of Chechnya’s socio-economic development,” and briefly spoke about the work of “law enforcement agencies,” a potential allusion to the threats to the Yangulbaevs.
The views of authors are their own and not that of CSPC.