Since the missile strikes that killed Ayatollah Khamenei in late February, the Iran War has spilled over into a larger regional conflict, affecting several Gulf states and wide swaths of the Southern Levant. But as new as this war is, it has also revealed long-standing underlying regional tensions, notably the fight between Israel and Iran-backed militia Hezbollah based primarily in Lebanon. Israel had been planning an operation against Hezbollah for over a year, when Israeli intelligence officials had determined that the ceasefire between two was crumbling and the group’s disarmament had not come to fruition. Now, Hezbollah is engaged in what seems to be an existential last stand against Israel, while the strategy from Israeli Defense Minister Israel Katz in response to this is to establish a buffer zone in southern Lebanon much like the one in Gaza. Lebanon is facing a humanitarian and refugee crisis, with over 1 million citizens displaced and daily life obliterated for the country’s most vulnerable.

Today, I sit down with Katharine Sorensen, a reporter for The Beiruter, who has been covering these stories from the ground since October 2025. We talk about the political and religious structures that underpin Lebanon’s position within the wider war. More specifically, she breaks down why these structures make it functionally difficult for the country to escape spillover effects from regional conflicts, let alone act for itself.

Share

Share Rules of Engagement

Write for Rules of Engagement

BLUF

On February 27th, Secretary of War Pete Hegseth made an unprecedented announcement, listing American AI company Anthropic as a supply chain risk, effectively barring it from all current and future federal contracts. This designation came after the company refused to budge on their red lines preventing the use of Claude for mass surveillance and fully autonomous weapons systems. Anthropic sued the Department of War on the grounds that the government violated their rights to free speech and due process, as well as the on basis that the Department of War’s response was an arbitrary overreach of executive authority. Anthropic has a strong case to vacate the supply chain risk designation, but it may not prevent the Department of War from looking elsewhere for AI integration into the military.

Anthropic is an AI company based in San Francisco behind the large language model Claude. Claude has been utilized by U.S. military command for intelligence analysis, battlefield simulations, and target selection support for the Department of War (DoW), including in the ongoing joint U.S.-Israel military operations in Iran. It has also been integrated into the classified intelligence space, allowing it to be used for automated vulnerability patching, operational planning, and synthesizing vast amounts of complex logistics data. In recent weeks, the company has been on one side of a showdown with the DoW and the Trump administration at large.

What happened between the War Department and Anthropic?

On January 12, 2026, the DoW announced that it would be prioritizing AI to accelerate its warfighting capabilities. In the press release, Secretary of War Pete Hegseth stated,

“We will unleash experimentation, eliminate bureaucratic barriers, focus our investments, and demonstrate the execution approach needed to ensure we lead in military AI. We will become an ‘AI-first’ warfighting force across all domains.”

This new directive caused friction between the Pentagon and one of its main AI contractors. At the center of the row between DoW and Anthropic hinges on two of the company’s boundaries for use of Claude, restrictions that the Pentagon wanted removed. First, it restricts the use of Claude for AI-driven mass surveillance out of concern that its technology could contribute to the erosion of democratic values, privacy, and personal liberties. Second, it precludes the integration of Claude for fully autonomous weapons, as even frontier AI systems are too immature and inconsistent to possess the judgment necessary for autonomous target selection and engagement, as defined by the Pentagon.

On February 24, the negotiations reached an impasse when the Pentagon issued an ultimatum: Anthropic had to agree to lift these restrictions by February 27, or the government would invoke the Defense Production Act to force Anthropic to give the Pentagon access to its models while also listing the company as a supply-chain risk. When the deadline hit, no agreement had been reached. Shortly after, while the Defense Production Act was not invoked, Secretary Hegseth designated Anthropic as a supply chain risk, issuing the following announcement on X.

Being designated as a supply chain risk to national security effectively functions as a domestic blacklist. Under 10 U.S.C. § 3252, this label grants the Secretary of War the authority to exclude a company from any contract or subcontract involving the military’s most sensitive information technology, including intelligence and weapons systems. For Anthropic, it triggers a secondary boycott, meaning major defense contractors like Boeing and Lockheed Martin are warned that any commercial activity with Anthropic—even outside of government work—could jeopardize their own standing with the Pentagon.

On March 9, Anthropic formally submitted a lawsuit against the DoW and affiliated government parties in the Northern District of California.

The merits of the lawsuit

*Read to full lawsuit here.

What Anthropic argues

The DoW’s actions violate the First Amendment protection from retaliation against protected speech. The First Amendment protects Anthropic’s speech, viewpoints, and petitioning of the government. It also protects Anthropic from retaliatory actions by the government after expressions of protected speech (Gibson v. United States, 781 F.2d 1334, 1338, 9th Cir. 1986).

Anthropic argues that all the conditions for a retaliation claim have been met. First, Anthropic has been clear about its commitment to the safe deployment of its AI, both publicly through its website and commentary, as well as in private negotiations with the government about its red lines. This constitutes a protected form of speech.

Second, the DoW’s designation of Anthropic as a supply chain risk creates a chilling effect on the company, as this label implies that the company is a “sabotage” or “adversarial” threat to the U.S. (10 U.S.C. § 3252(d)(4)). This stain will follow Anthropic into future procurements or contracts, and would be disastrous for its business.

Third, there is a causal link between Anthropic’s expression of speech and the government’s subsequent action—it was clearly the motivating factor. At the onset of the spat with Anthropic, the DoW initially considered invoking the Defense Production Act to compel the very technology that it now lists as a risk to national security. Given the government’s extensive use of Claude, this is the only point of contention upon which the supply chain risk designation could have rested.

The DoW acted abritrarily and capriciously in violation of the Administrative Procedure Act and overstepped its authority in violation of Article II executive powers (ultra vires). The Administrative Procedure Act states that courts must vacate final agency actions that are “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law,” that exceed statutory discretion, and that don’t adhere to lawful procedure. Secretary Hegseth’s directive was a final agency action because it was an order from the Secretary of War that directed the DoW to contract with Anthropic for no longer than six months after the directive.

In addition, a final agency action is arbitary and capricious if it “entirely fail[s] to consider an important aspect of the problem,” offers “an explanation for its decision that runs counter to the evidence before the agency,” or fails to “articulate a satisfactory explanation for its action including a rational connection between the facts found and the choice made” (Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (1983)). Anthropic argues that this standard has been met because the directive both exceeds its congressional authorization and is incorrectly applied to the company.

First, Anthropic argues that the Trump administration has neither statutory nor inherent authority to impose this order. Neither U.S.C. Title 10 regulations for the armed forces nor U.S.C. Title 41 regulations for public contracts grants explicit authority. And because executive actions to issue these types of directives must come from an act of Congress or the Constitution itself (Youngstown Sheet & Tube Co. v. Sawyer, 343 U.S. 579 (1952)), the DoW must be invoking some form of constitutional authority. And given the recent Supreme Court case that struck down Trump’s IEEPA tariffs, the executive branch does not have the inherent authority to force companies to choose between immediate cancellation of all federal contracts or submission to the DoW’s demands (Learning Res.,Inc v. Trump, 2026 WL 477534, (2026)).

Second, notwithstanding the executive branch’s inherent constitutional authority, Anthropic says that supply chain risk designations have always been meant to apply to foreign contractors and subcontractors that can sabotage information systems on behalf of an adversary, traditionally circumscribed to China, Russia, Iran, North Korea, Cuba, and Venezuela. As a U.S.-incorporated and U.S.-headquartered company that has never demonstrated a history (let alone a “long-term pattern or serious instances of conduct significantly adverse to the national security of the United States”) of adversarial subversion or sabotage, the supply chain risk designation shouldn’t apply regardless of congressional authorization.

The DoW’s actions caused immediate and severe harm in violation of the Fifth Amendment’s guarantee of due process. Anthropic argues that the sudden ultimatum and debarment (excluding it from federal contracts) without any factual findings or evidence as to why the company was a supply chain risk constitutes a de facto punishment without any hearings or opportunities for redress.

What the government might argue

The government has not yet released any public legal response to Anthropic’s lawsuit, but the DoW is likely to argue that the federal government has broad discretion when it comes to defense procurement contracts. To justify the specific use of the “supply-chain risk” designation under 10 U.S.C. § 3252, the DoW argues that ideological restrictions create a literal, physical risk to operations. If a military operator inputs a prompt that violates Anthropic’s usage policies during a live mission, the software could theoretically shut down or refuse to answer. The government views this unpredictability as a critical vulnerability. As the Chief Technology Officer for the DoW told CNBC,

“We can’t have a company that has a different policy preference that is baked into the model through its constitution, its soul…pollute the supply chain so our fighters are getting ineffective weapons, ineffective body armour, ineffective protection.”

Who is likely to win? And why does this matter for international security?

For a number of reasons, it seems as though Anthropic has a solid case in its request for relief from the supply-chain risk designation. First, Anthropic has a strong argument for the count of ultra vires and statutory overreach. Legal analysis conducted by Alan Rozenstein from Lawfare reveals that Secretary Hegseth’s primary weapons are 10 U.S.C. § 3252 and the Federal Acquisition Supply Chain Security Act (FASCSA).

Section 3252 was designed to combat foreign espionage. The statute defines a supply chain risk as an adversary acting to “sabotage, maliciously introduce unwanted function, or otherwise subvert” a system. A domestic American company transparently refusing to waive its terms of service regarding autonomous weapons and mass surveillance does not constitute covert hostile action or sabotage. In addition, the government’s reliance on FASCSA, which is the basis for requiring every federal agency to cut ties with Anthropic, mandates a 30-day notice period for public comment. That notice was not provided.

Next, Anthropic has a strong argument for the count of violations of the Administrative Procedure Act and is likely to successfully argue that the DoW’s actions lack logical coherence and reasoned decision-making. Precedent strongly favors Anthropic here; in Luokung Technology Corp. v. Department of Defense and Xiaomi Corp. v. Department of Defense, federal courts enjoined (ordered a stop) DoD designations that lacked adequate factual basis or procedural due process. And in Anthropic’s case, I see the arbitrary and capricious nature of the DoW’s actions equally clear. The Pentagon’s logic is internally inconsistent: it cannot simultaneously brand Anthropic as a grave national security threat while threatening to invoke the Defense Production Act to seize its technology—all while keeping Claude integrated into military operations for a six-month transition period.

While courts may vacate Anthropic’s “supply-chain risk” designation and the commercial boycott, I don’t think the courts will force the military to retain Anthropic as a vendor. If the Pentagon formally determines that its operational R&D and combat deployment require AI models that allow for “any lawful use,” that is a routine procurement decision. The DoW is perfectly within its rights to simply decline to renew Anthropic’s contract and pivot to a competitor like OpenAI that is willing to meet those operational specifications. And indeed, it already has. On March 2, OpenAI announced that it had struck an alternate agreement with the DoW for the use of its models.

The DoW-Anthropic fallout is a reflection of the significant leverage that private tech companies have in shaping norms for ethical applications of AI into military contexts (but only if they work together). As I outlined in last week’s BLUF, the integration of AI into drone swarms, kamikaze loitering munitions, and other autonomous systems may have a serious impact on the offense-defense balance. In other words, if you can manufacture a low-cost, highly intelligent, and adaptive autonomous weapons system, it may lower the “blood-and-treasure” threshold for launching an attack. Furthermore, integration of frontier AI technology into kinetic weapons systems may fuel the already-accelerating global AI arms race. Finally, as recent years have shown, there has been a broad centralization and extensive use of executive authority to guide the ways in which wars are fought (the Iran War was largely an unilateral action by the U.S. and Israel). Given this, the room where AI governance decisions are made may begin to shrink, especially in the context of AI in civil-military fusion.

Write for Rules of Engagement

On March 1, two Iranian drones operated by the Iranian Revolutionary Guard Corps flew into and struck Amazon Web Services data centers in the United Arab Emirates, and one more struck near a data center in Bahrain. According to the AWS health dashboard, the strikes caused structural damage and disrupted power delivery to a significant portion of the infrastructure at the affected sites. In some cases, AWS needed to suppress fires, which led to additional water damage. This is not an isolated instance. Throughout the war in the Gulf, the Russo-Ukrainian War, the Sudan Civil War, and the Myanmar Civil War, these types of attritable (low-cost and expendable), flying weapons are becoming the tool of choice for militaries and militia groups that want both extended surveillance times and cost-effective weapons systems.

Loitering munitions, also known as suicide drones or kamikaze drones, are autonomous or semi-autonomous aerial vehicles designed to hover around an area, collect surveillance data, identify a target, and engage it with their onboard warhead by flying into it. This article examines three such loitering munitions currently deployed in combat zones. The first is the small and common first-person viewer drone. The second is the Switchblade 600, a mid-sized tactical munition. And the third is the Shahed-136, a strategic “one-way attack” munition. While not exhaustive of loitering munitions, these weapons systems are redefining what modern warfighting means in the contexts of attritability, autonomous warfare, and artificial intelligence.

FPV “kamikaze” drones

The common FPV drone features a carbon fiber or high-density polyethylene (HDPE) frame, both lightweight and strong. For example, a typical 5-inch frame is 4mm thick, weighs 210 grams, and is three times stiffer than steel and aluminum for its weight. FPV drones excel at precision strikes on armored vehicles, personnel, and infrastructure, typically using explosive payloads like high-explosive anti-tank (HEAT) warheads. On impact, a contact fuze detonates the explosive. FPV drones also serve in reconnaissance, artillery spotting, and aerial interception, making them versatile across military operations.

Despite their effectiveness, FPV drones face challenges such as vulnerability to electronic warfare and the need for skilled operators. Electronic warfare involves attempts to disrupt or disable communications or navigation using electromagnetic signals. Homemade and commercial FPV UAVs, such as drones from DJI, operate on 2.4 GHz and 5.8 GHz frequency bands. Jamming works by emitting an electromagnetic frequency that drowns out the communication between the drone and its operator. This has previously proven to be a major downside of FPV kamikaze drones. Russians and Ukrainians have each developed workarounds to this vulnerability. First, they use ultra-thin fiber optic cables to physically connect the drone directly to the operator, spooling out miles of wire as the drone flies. Fiber optic cables transmit data using light signals, which are not affected by radio interference. Because the control commands and the high-definition video feed travel through this physical tether rather than through the open air via radio waves, these fiber-optic drones are completely immune to electronic warfare and signal jamming.

Graphic: https://commons.wikimedia.org/wiki/File:UA_fiber-optic_FPV_drone_02.webp

Second, the “Magic Radio” technology developed by Russian company Mikran uses frequency-hopping spread spectrum (FHSS) to protect drones from jamming in Ukraine. This system rapidly switches between frequencies up to 1,000 times per second, far faster than typical FHSS systems. It operates across a wide bandwidth of 100-6000 MHz, allowing for millions of possible frequency combinations. This adaptability allows the system to avoid congested frequency bands, further aiding in synchronization. The technology has reportedly enabled Russian Orlan-10 reconnaissance drones to operate successfully despite Ukrainian jamming efforts, with a range extending to around 150 km.

Finally, Ukrainian and American forces are incorporating autonomous terminal guidance systems into their drones to take over piloting functions even if the operator loses signal connection with the drone. In Operation Spiderweb last summer, Ukrainian forces struck five military airfields deep inside Russian territory. They targeted strategic bomber fleets stationed far behind the front lines. These Ukrainian systems were equipped with AI-driven machine vision and terminal guidance. When the signal was cut or jammed during the final approach, the onboard software took over, visually locking onto the fuel tanks and wing roots of parked Tu-95 and Tu-22M3 bombers to autonomously complete the attack dive with devastating precision.

FPV drones are quickly becoming a go-to option in modern warfare due to their cost-effectiveness and advancements in autonomous flight operations. For instance, the U.S. Army just announced a $5.2 million contract with Perennial Autonomy for its Bumblebee v2, a drone that can autonomously hunt down and intercept hostile drones by physically ramming into them midair. Powered by onboard artificial intelligence, the Bumblebee acts as an independent hunter-killer agent; it uses computer vision and specialized software to identify, track, and lock onto incoming enemy unmanned aerial vehicles. Once a target is acquired, the drone’s AI takes over the flight controls to execute a kinetic “hard kill”—colliding directly with the threat to knock it out of the sky. This autonomous guidance allows the drone to neutralize aerial threats effectively, even if electronic warfare jams the human operator’s control signal, all while avoiding the explosive collateral damage of traditional anti-aircraft missiles.

Tactical loitering munitions ~ The Switchblade 600

Tactical loitering munitions are mid-sized drones that can be designed to be deployed directly by frontline combat units—often carried in a backpack or launched from a light vehicle. It is fired into the air to autonomously circle over a localized battlefield, use onboard optical and thermal sensors to hunt for targets, and strike them with an integrated warhead upon the operator’s command.

The U.S. has invested heavily in this technology since the early 2000s. AeroVironment, an autonomous robotics company, began developing the Switchblade loitering munition in 2006. The Switchblade made huge strides throughout the 2000s and 2010s. It soon had rapid deployment capabilities, being ready to fire within 30 seconds. It was able to locate a man-sized target at its combat range in less than 20 seconds while operating at an altitude of 500 feet. The system’s endurance was enhanced, allowing for a loitering time of up to 10 minutes if immediate attack conditions were not met. In its terminal phase, the Switchblade could achieve speeds between 85-105 mph (137169 km/h). In 2020, AeroVironment unveiled a larger, faster, and longer-range version of the previous Switchblade iterations. The Switchblade 600 has better range and endurance compared to the smaller Switchblade 300 model. It also boasts improved target engagement and anti-armor technology. Finally, the bulkier size gives the Switchblade 600 the ability to carry heavier payloads, which allows operators more flexibility when engaging a diverse array of hardened targets.

1: Aerodynamic cover; 2: Air-filled cavity; 3: Conical liner (Often copper); 4: Detonator; 5: Explosive; 6: Piezo-electric trigger.

The Switchblade 600 features a 40+ minute endurance time and a range of over 40 km (24.9+ miles), which can be extended to 90+ km (56+ miles) with the optional Pocket Digital Data Link (DDL), which enables sustained communication as the munition travels further from its operator. The system weighs 54.4 kg (120 lb.) in total, with the munition itself weighing 15.0 kg (33 lb.).

The Switchblade 600 is equipped with high-performance electro-optical/infrared (EO/IR) gimbaled sensors for improved target acquisition and an anti-armor warhead capable of defeating modern armor, including explosive reactive armor. It has a cruise speed of 112.7 km/h (70 mph) when in the surveillance stage of the mission and a dash speed of 185.1 km/h (115 mph) when actively engaging a target. The system can be set up and made operational in less than 10 minutes, offering a quick-response capability for various tactical situations.

The Switchblade 600 has a warhead similar to those housed in Anti-Tank Guided Missiles (ATGMs), the same warhead onboard the American-made Javelin FGM-148 (fire-guided missile). The difference between the two lies in the fact that the warhead is an undetachable part of the Switchblade 600, whereas an ATGM requires a delivery mechanism from which to launch or deploy. The payload is an 8.4 kg tandem-charge, HEAT warhead. A tandem-charge warhead consists of two separate explosive charges designed to defeat modern armored vehicles, especially those with reactive armor. The first charge (precursor) detonates to clear protective layers, while the second, larger charge (main) follows immediately to penetrate the vehicle’s main armor.

The Ukrainian military has actively used the Switchblade 600 on the front lines of the Russo-Ukrainian War, and the U.S. Army’s 1st Cavalry Division is conducting field tests with the Switchblade 600 as part of an effort to modernize its forces and upskill its operators. This platform is also equipped with autonomous features that are ushering in a new era of warfare. The Switchblade 600 is integrated with an automated target recognition (ATR) system within its edge compute (onboard the drone) that “autonomously detects and classifies both static and moving targets—including personnel, vehicles, aircraft, and maritime vessels.” The onboard ATR technology allows the drone to recognize a target and engage the target autonomously, with a human supervisor in the loop to abort the task or re-engage as necessary.

Strategic “one-way attack” drones ~ The Shahed-136

Now, back to that drone attack on the data centers in the UAE and Bahrain. The drone was a Shahed-136, a low-cost, Iranian-designed one-way attack drone released in 2021 that flies along a pre-programmed GPS route to a specific coordinate and detonates its explosive payload directly upon impact. The IRGC widely deploys the Shahed drone for its cost-effectiveness—each one costs between $20,000 and $50,000, compared to typical ballistic and cruise missiles, which can cost millions of dollars each.

Compared to the Switchblade and FPV kamikaze drones, the Shahed is much bigger. Its length is 3.5 m, and its wingspan is 2.5 m. It has a 50 horsepower, rear-mounted engine that pushes the fuselage at a maximum speed of 185 km/h. At a weight of 200kg (~440lbs), it is built more for maximum fuel efficiency rather than speed or evasive maneuvers. It has an estimated range from 1,000 to 2,500 km. It can fly at an altitude from 60 to 4,000 m. This also means that the Shahed physically cannot take off on its own power from a short launch rail and must thus use a rocket-assisted take-off (RATO) launch system.

Onboard, the Shahed-136 carries a high-explosive fragmentation warhead of around 30–50 kg, situated in the nosecone of the fuselage. This makes it optimal for striking counter-value targets like the AWS data centers in Bahrain and the UAE, Ukraine’s power grids and thermal heating plants, and the U.S. embassy in Saudi Arabia.

These fairly cheap, increasingly sophisticated attritable weapons will change the nature of how wars are fought, especially as agentic capabilities are developed, which allow for coordinated drone swarms, autonomous target engagement, and higher-level strategic reasoning embedded in edge computing. The question is less so when these technologies will be feasible, but when they will be safely incorporated into the kill chain without human approval chokepoints.

Even in their most basic forms, kamikaze drones are still popular because cheap is good and more is better. Loitering munitions are proving to be an effective tool without a particularly high technical barrier of entry—practically anyone can purchase these drones. Yet, this weapons system still has its limits. They cannot be deployed recklessly or without clear intent, and they certainly shouldn’t be deployed under the assumption that any loitering munition will be apt for a strategic objective in any geopolitical theater. Kamikaze drones will not and cannot replace thoughtful analysis, skillful weaponeering, and calculated restraint.

Listen Here

BLUF:

On February 28, 2026, the United States and Israel launched a massive coordinated military campaign (Operations “Epic Fury” and “Roaring Lion”) that effectively decapitated Iran’s top leadership, confirming the deaths of Supreme Leader Ayatollah Ali Khamenei and several key military commanders. Following the failure of nuclear talks in Geneva and a massive U.S. naval buildup, the strikes targeted IRGC command centers, air defenses, and naval assets, prompting immediate Iranian retaliation against U.S. bases and Gulf allies. While President Trump has called for the Iranian people to seize this “hour of freedom” and overthrow the clerical regime, the path to successful regime change remains uncertain due to a burgeoning power vacuum, the lack of a clear U.S.-backed successor, and the risk of a protracted regional war involving Iranian proxies.

Graphic: President Donald J. Trump oversees Operation Epic Fury at Mar-a-Lago, Wikimedia Commons

What the heck just happened?

Following the deadliest protests in Iran since the 1979 revolution, President Trump pivoted his posture toward one of regime change. On January 23, he announced that the U.S. would send an “armada” to the Middle East, including the USS Abraham Lincoln, Tomahawk-missile-firing destroyers, and F-15E fighters. Throughout February, tensions between the U.S. and the Iranian regime escalated, with more military buildup from the U.S. in the Arabian Sea, Persian Gulf, Gulf of Oman, and Mediterranean Sea.

Graphic: New York Times

In late February, U.S. and Iranian negotiators met for a third round of talks in Geneva, Switzerland. The U.S. demanded the total dismantling of the Fordow, Natanz, and Isfahan nuclear sites and the shipping of all enriched uranium to the U.S., which Iran flatly rejected.

Despite a last-minute claim by Oman of a “breakthrough,” the U.S. determined that Iran was merely stalling for time. Satellite imagery showed U.S. ships leaving Bahrain (a standard defensive move before an attack).

The U.S. and Israel Strike Iran

At around 1:15 am ET on February 28th, the Israeli’s launched “Operation Roaring Lion” alongside the U.S. operation entitled “Operation Epic Fury.” Operation Epic Fury sought to dismantle Iran’s security apparatus, targeting “Islamic Revolutionary Guard Corps (IRGC) command and control facilities, Iranian air defense capabilities, missile and drone launch sites, and military airfields,” according to a press release put out by the US. CENTCOM. The U.S. strikes destroyed key sites of the Iranian Navy, ballistic missile factories, and long-range air defense systems to secure regional air and sea supremacy.

While the Pentagon targeted major Iranian military installations and infrastructure, Israeli forces focused on decapitating Iran’s political leadership. In the initial wave of strikes, US-Israeli forces confirmed the deaths of:

1. Ayatollah Ali Khamenei, Iran’s Supreme Leader

2. General Abdol Rahim Mousavi, Iran’s Army Chief of Staff

3. General Aziz Nasirzadeh, Iran’s Defense Minister

4. Major General Mohammad Pakpour, Commander of the IRGC

5. Ali Shamkhani, Secretary of the Iranian Security Council

There have also been civilian casualties. Most notably, Israeli strikes killed at least 180 people, many of whom were children, in a strike on an elementary school in the southern Iranian city of Minab.

Graphic: Institute for the Study of War

Is the U.S. at war with Iran?

Technically, no. President Trump declared these strikes as “major combat operations,” not as a declaration of war. Strictly speaking, only Congress has the authority to declare war via simple majority vote in both the House and Senate (U.S. Const. art. I, § 8). However, what is clear is that the U.S. is in a state of armed conflict, as a matter of domestic and international law. Presidents have often cited their authority under Article II, “Commander-in-Chief” powers to launch preemptive or defensive operations without Congressional approval. Under the War Powers Resolution, the President must “consult with Congress before introducing United States Armed Forces into hostilities” (Trump notified the Congressional “Gang of 8” before the strikes) and cannot last for more than 60 days without a formal declaration of war. According to international law, the U.S. and Israel are both in a state of armed conflict with Iran and vice versa, even though the U.S. isn’t “at war” with Iran.

How is Iran responding?

Shortly after the first wave of strikes by the U.S. and Israel, Iranian forces swiftly retaliated by striking previously evacuated U.S. bases throughout the Middle East, including facilities in Bahrain, Qatar, the United Arab Emirates, Kuwait, Jordan, and Saudi Arabia. Among Gulf allies, Iran struck hotels, residential areas, and airports in Dubai (UAE), Kuwait, Iraq, Bahrain, Qatar, and Tel Aviv. As of 9:30 am ET today, U.S. CENTCOM has confirmed the death of three U.S. servicemembers and the serious injury of five other servicemembers as part of Operation Epic Fury.

Iran’s top leaders are dead. What happens now?

For the Iranian regime, the most immediate concern is succession. With the decapitation of its top political and military leaders, the regime lacks the same centralized power center that it had even one month ago, when it violently quelled protests in January. On March 1, Iranian state television announced an interim leadership council, including Iranian President Masoud Pezeshkian, Guardian Council jurist member Ayatollah Alireza Arafi, and Iranian judiciary head Gholam-Hossein Mohseni-Eje’i. But under Iranian law, the 88-member Assembly of Experts is ultimately responsible for choosing the next Supreme Leader.

There are a few contenders for the next leader of Iran. Iranian cleric and Ali Khamenei’s son, Mojtaba Khamenei, is a potential pick, though this pick may anger even supporters of the regime over gripes that the nepotism displayed was the same kind of favoritism that got the original Iranian shah ousted in 1979. Alireza Arafi, a Shiite cleric, is the deputy chairman of the Assembly of Experts and a member of the Guardian Council responsible for approving candidates, so his name would likely be rubber-stamped. Mohammad Mehdi Mirbagheri, a hard-line conservative, is another name that has come up, as well as Hassan Khomeini, the grandson of the original Ayatollah.

Then, there is the option that many in Washington and Israel are discussing: regime change.

Will decapitation lead to regime change?

In his first public address following Operation “Epic Fury,” President Trump made a bold call for the Iranian people to overthrow the clerical regime:

Yet, despite Trump’s aid of “overwhelming strength and devastating force,” his proclamation to “take over [the] government” is much easier said than done. I don’t have all the details yet, but I can provide a window into what might determine whether regime change happens or not based on historical precedent. Long story short, something needs to change if the Iranian regime is to fall. Here’s why.

Graphic: Rules of Engagement. The chart shows different historical cases of foreign-imposed regime change attempts based on their relative levels of success. The columns display the four factors of successful regime changes, and the colored boxes represented whether that case meets the respective criteria (green = yes, yellow = somewhat, red = no).

Based on analysis of regime change aspects (RAND Corporation, Alexander Downes, Lindsey O’Rourke), four main factors dictate the success or failure of foreign-imposed regime change:

1. Pre-existing institutional capacity: Strong, centralized bureaucracies and a history of organized state institutions tend to ease political transition while maintaining continuity of essential state functions, as opposed to strict personalist regimes, where power and state capacity are concentrated within the leaders themselves.

2. Integration of “Old Regime” Elites: Success often requires co-opting parts of the existing military and civil service. When the intervening power completely dismantles the old regime’s security forces, it creates a power vacuum and a massive pool of armed, unemployed experts who often form the backbone of a new insurgency.

3. Elimination of Competing Principals: The “Competing Principles” dilemma arises from a newly installed leader who must appease two different forces. The leader must appease the foreign patron without appearing as a puppet, while also appeasing the domestic public without losing the approval of the intervening power.

4. External Cooperation (No safe havens): Foreign-imposed regime change is significantly more likely to succeed if neighboring countries do not provide “safe havens” or funding for insurgent groups. The presence of a non-aligned, third-party actor often extends the conflict indefinitely.

In the interest of time, I’ll only dive into two examples. The invasion and deposition of Manuel Noriega in Panama (Operation Just Cause) was largely successful because it already had a well-functioning public education system, constitutional frameworks, and administrative infrastructure established in the early-to-mid 20th century. Furthermore, instead of purging officers from the Panamanian Defense Forces, the U.S. instead “re-hatted” them into the newly-formed Panamanian Public Forces to avoid total collapse of public order. And on top of that, there was no issue of competing domestic interests, as Guillermo Endara (the U.S.-installed President of Panama) was popularly elected and enjoyed widespread support. Finally, while neighboring countries condemned the U.S. for its foreign intervention, they largely accepted Operation Just Cause as a fait accompli because they themselves had exhausted other means of getting rid of Noriega.

In contrast, Operation Iraqi Freedom largely failed because it lacked all four factors for success in foreign-imposed regime changes. Saddam Hussein’s bureaucracy was loyalty-based, which the U.S. entirely disbanded rather than “re-hat”. Iraq remained largely fractured from leaders who could not satisfy both patrons and the populace. And regional neighbors like Iran and Syria provided safe havens for foreign militias, leading to a protracted proxy war lasting decades.

How does this relate to Operation Epic Fury?

For Iranians to successfully overthrow their government, it will take more than a pep talk from Truth Social. From my assessment, much of Iran’s institutional capacity is concentrated within the IRGC. If the IRGC remains intact, it acts as a “competing state”; if it is destroyed, the administrative backbone of the country disappears, risking a power vacuum. It will also be challenging to “re-hat” existing Basij or Artesh members, as Iran’s forces are centered around a deeply ideological regime that has lost all popular support from the Iranian people.

In my mind, the most pressing issue is that there is no clear U.S.-backed successor like Guillermo Endara in the Panama case. The time to capitalize upon Operation Epic Fury is now, but there doesn’t seem to be much institutional momentum. This is partly because of fear of IRGC retaliation and partly because there lacks a cohesive movement or rally around someone that could take Khamenei’s place. With the transition council already in talks to replace top leadership, their window of opportunity will quickly close, especially as the IRGC forces regroup from the initial waves of attack. The Pentagon is highly unlikely to put boots on the ground, and the U.S. has never toppled a regime purely by air support.

The situation in Iran is quickly unfolding, and what this will mean for Iran, the Middle East, and the U.S. remains an open question. For President Trump’s part, he has shown an appetite to talk to the Iranians, though it is unclear to whom he is referring. If the goal of these talks is to leverage a deal with the current regime, it might be a good thing for immediate casualties but a blow to regime change activists.

Furthermore, there is the question of whether the Middle East is slipping into a wider regional war. I’m not sure, but there is no ideal outcome to this question. If hostilities stagnate, the intensity of the conflict may subside, but it would likely lead to a more protracted conflict. But if the regional conflict doesn’t stagnate, it could also drive more aggressive tactics from a severely weakened Iran that is desperate to get quick wins by all means necessary.

In the coming days, keep an eye out for how Gulf countries respond to kinetic attacks on their soil. Also, pay attention to what happens with Iranian-backed proxies, such as Hezbollah, Hamas, the Houthis, and Shi’a militia groups in Iraq and Syria. I don’t have all the answers, and this story is still developing, but I know that we could be living through a major inflection point in the “post-rules-based international order” era. Do not sleepwalk through this moment.

In a 6-3 ruling on Friday, the Supreme Court concluded that the Trump administration’s use of the International Emergency Economic Powers Act (IEEPA) to levy broad global tariffs was an executive overreach of power. The majority argued that the language of IEEPA was not explicit enough to justify granting President Trump the ability to impose taxes, a power expressly reserved for Congress. Additionally, it agreed that the legislative history behind Congressional authority to regulate imports did not support an interpretation that Congress could even delegate such authority. The dissent argued that the national security rationale behind Trump’s “Liberation Day” tariffs granted broad authority to regulate importation as a means of conducting foreign policy, an authority that encompassed taxation. This ruling does little to stop Trump’s use of tariffs to carry out his foreign policy agenda. Still, it does open the door for up to $175 billion of tariff refund requests and potential renegotiations of trade agreements.

Graphic

How did we get here?

Facts of the Case

On April 2, 2025, U.S. President Donald Trump declared a national emergency on the basis of unfair trade practices, trade imbalances, and harms to American manufacturing. As part of this national emergency, he invoked the International Emergency Economic Powers Act (IEEPA), which authorizes the President to “investigate, regulate, or prohibit…any transactions in foreign exchange…between the United States and any foreign country.” President Trump used IEEPA to justify his famous “Liberation Day” tariffs that same day, imposing a base level 10% tariff on all countries with an additional 25-45% tariffs on goods from countries like Canada, Mexico, and China.

Learning Resources, Inc., an educational toy company based in Illinois, was significantly impacted by these tariffs, ballooning their import costs from $2.3 million in 2024 to $100 million in 2025. Along with its sister company, Hand2Mind, Inc., Learning Resources filed suit against the Trump administration in the U.S. District Court for the District of Columbia. The court granted them a preliminary injunction and ruled that IEEPA does not authorize Trump’s reciprocal tariffs. However, this decision and those similarly decided by the U.S. Court of International Trade were stayed by the U.S. Circuit Court of Appeals for the Federal Circuit. And on September 9, the Supreme Court granted certiorari to hear this case on November 5.

Arguments of the petitioners (Learning Resources, Inc. et al.)

1. President Trump’s tariffs lacked explicit authorization. The Petitioners argued that while IEEPA authorizes the President to “regulate importation” during a national emergency, it never explicitly mentions this to include tariffs or taxes, a power granted solely to Congress under Article I of the Constitution. Futhermore, IEEPA authorizes the President to regulate the “importation and exportation” of transactions and property (50 U.S.C. § 1702(a)(1)(B)), meaning that if the word “regulate” had truly meant to grant the power to tariff, the entirety of IEEPA would have been unconstitutional on the grounds that the Constitution expressly prohibits export tariffs (Article I, § 9, cl. 5).

2. Historical precedent does not back up Trump’s interpretation of IEEPA. In the history of IEEPA and its predecessor, the Trading with the Enemy Act (TWEA) of 1977 (50 USC Ch. 53), no prior president had ever invoked the statutes to impose tariffs. President Nixon imposed a surcharge on imports in 1971 using the Tariff Act of 1930 and the Trade Expansion Act of 1962, both of which explicitly authorize tariffs. President Trump himself imposed tariffs in his first term on the basis of Section 232 and Section 301 authorities, not IEEPA.

3. If Congress wanted him to, it would’ve said so. The Petitioners further argue that if Congress truly had intended to authorize presidents to use IEEPA in this manner, effectively bypassing the legislative branch’s own power of the purse, it would have explicitly said so in no uncertain terms. This is commonly referred to as the Major Questions Doctrine. If the executive branch wants to invoke any powers that were not previously granted by Congress, it requires clear congressional authorization, especially for powers of such vast economic and political significance. They argue that no such authorities were enumerated.

4. The government could argue that the Major Questions Doctrine doesn’t apply to issues of national security. “Nope,” says the Petitioners. The famous Youngstown v. Sawyer case asserts that the President cannot assume powers expressly delegated to Congress without its authorization, even in a national security context.

Arguments of the respondents (Trump administration)

1. The power to regulate importations naturally encompasses the power to tariff. The regular meaning of “regulate” in the context of foreign commerce unambiguously authorizes the President to levy tariffs, as Solicitor General D. John Sauer argued. This interpretation tracks all the way back to Gibbons v. Ogden in 1824, in which Chief Justice John Marshall remarked that “The right to regulate commerce, even by the imposition of duties, was not controverted.” Furthermore, the authorities granted by IEEPA not only include “regulate,” but it also authorizes the President to “block,” “nullify,” “void,” “prevent,” and “prohibit” importations, among others (50 U.S.C. 1702(a)(1)(B)). Thus, the Trump administration argues that it would be quite strange to use a whole range of words to cover several different authorities and exclude the power to tariff without explicitly mentioning it.

2. The Major Questions Doctrine does not apply here. The administration argued that the major questions doctrine does not apply with the same force to the President, especially in the context of foreign affairs and national security. Furthermore, this doctrine is used as a tool for courts to discern ambiguous statutory language. In this case, because the administration argues that the ability to “regulate importation” is unambiguous, this doctrine does not apply.

3. Threats to national security give the President broad authority. The administration framed the tariffs as essential tools for addressing two “unusual and extraordinary” threats: the illicit drug trade and trade deficits. Presidents have long been granted deference in using IEEPA to address national security issues. For instance, President Ronald Regan invoked IEEPA to respond to South Africa’s apartheid (Executive Order No. 12,532, 50 Fed. Reg. 36,861).

   Furthermore, there is the question of the nondelegation doctrine, a rule that prohibits Congress from ceding its legislative authority (including the power of the purse) to another branch of government, essentially ensuring the separation of powers. To this, the Trump administration responded that the nondelegation doctrine has “minimal weight” in the context of foreign affairs and national security. It argued that because the President has independent constitutional authority over international relations, Congress can grant significantly broader discretion than it could in purely domestic matters. And when combining solely vested executive authority with delegated authority from Congress, “his authority is at its maximum,” to quote the Youngstown case again.

Majority opinion in a nutshell

In a 6-3 ruling on Friday, the Supreme Court ruled that IEEPA does not authorize the President to impose these tariffs. But even among the majority opinion, there were internal disagreements as to what was necessary to reach such a ruling.

The major questions doctrine argument (Roberts, Gorsuch, and Barrett)

“Regulate” DOES NOT mean “tax”: The majority ruled that a tariff is a tax. While taxes can be a “means” to a regulatory “end,” the ordinary course of “regulatory powers” does not inherently vest the extraordinary power to “tax.” Furthermore, even if “regulate” did unambiguously mean “tax,” the Court agreed with Learning Resources that, because IEEPA grants regulatory powers over both imports and exports, the Presidential power to tax would also have to include the power to levy tariffs on exports, an action that would be expressly unconstitutional, as mentioned before.

No congressional authorization: In the wide-ranging powers that IEEPA grants the President, Congress essentially “covered the field” of authorities granted under the Act. When Congress delegates tariff authority (as it does in Title 19 Custom Duties), it does so with “clear and unambiguous language” and “careful constraints,” neither of which is present in the text of IEEPA. Justices Roberts, Gorsuch, and Barrett pointed to the major questions doctrine explained above to justify limiting potential executive encroachment. Moreover, they found the argument that the major questions doctrine does not apply in national emergencies to be unconvincing.

The plain text reading and historical precedent argument (Kagan, Sotomayor, Jackson)

While Justices Kagan, Sotomayor, and Jackson came to the same conclusion, they felt that invoking the major questions doctrine was unnecessary and that the ruling could be justified through a plain text reading and historical lens. They maintained that the plain text of IEEPA, along with its legislative history, was sufficient to show it was never intended to be a revenue-raising statute. They viewed IEEPA primarily as a tool for targeted sanctions and freezing foreign assets, not for levying taxes on American importers. Additionally, they expressed concerns that the major questions doctrine could become a tool for judicial overreach, allowing judges to strike down executive actions based on their own political or economic philosophy.

Dissenting opinion in a nutshell

(Thomas, Alito, Kavanaugh)

“Regulate…importation” DOES authorize taxation: Justices Thomas, Alito, and Kavanaugh agreed with the government’s position that IEEPA’s wording of “regulate…importation” does, in fact, grant broad statutory authority to tax. Justice Kavanaugh stated in his dissent, “Like quotas and embargoes, tariffs are a traditional and common tool to regulate importation,” citing historical precedent of Congress granting the President the authority to impose tariffs on foreign goods.

The President has broad authority when dealing with issues of national security or foreign policy. The dissent further argued that the invocation of the major questions doctrine was misplaced in the context of foreign affairs because Congress intentionally uses vague language when granting emergency powers to allow the President sufficient leverage. In this case, tariffs were likened to “bargaining chips” that the President can use against an adversarial country. Finally, on the point about the nondelegation principle, the dissent rebukes what this idea would mean in practice, emphasizing that it would make the tariffs unconstitutional even if IEEPA had explicitly granted the power to tariff, effectively hamstringing the government’s ability to carry out foreign policy through economic statecraft.

Reversing course on IEEPA tariffs would cause an economic mess: Justice Kavanaugh argued that the economic effects of reversing the IEEPA tariffs would be incredibly disruptive, especially for countries that already struck trade agreements with the Trump administration in exchange for tariff reductions. The government may now be required to refund billions of dollars in collected revenue, causing significant fiscal and administrative disruption.

So, what happens now?

Why this ruling is not as big a deal

As big a disappointment as this opinion was for the Trump administration, it was a fairly narrow ruling, one that struck down just one of the avenues through which it could levy tariffs. Justice Kavanaugh states that “the Court’s decision is not likely to greatly restrict Presidential tariff authority going forward”. This is true, as there are many other statutory means through which tariffs are still possible. For instance, the administration could use Section 338 of the Tariff Act of 1930, which enables the President to tariff foreign countries to offset commercial disadvantages. Or maybe he could use Section 232 of the Trade Expansion Act of 1962, which allows the President to impose tariffs on the basis of national security.

Moments after the Supreme Court’s ruling on Friday, President Trump had already found workarounds, imposing a 10% global tariff based on Section 122 of the 1974 Trade Act, which allows him to impose import restrictions to “deal with large and serious United States balance-of-payments deficits” (19 U.S.C. § 2132). Trump has also noted that he plans to use Section 301 tariffs to crack down on unfair trade practices, the same tariffs that he used in the U.S.-China trade war during his first administration.

Why this ruling is a big deal

Regardless of what the Court said, the tariffs have already been paid. The ruling effectively turns billions of dollars in collected duties into “refundable overpayments.” IEEPA tariffs currently account for 60 percent of current tariffs, and industry estimates peg the refund liabilities that the U.S. government may owe between $130 billion and $175 billion in refunds to over 300,000 importers. And considering the 21 countries with which the U.S. has made trade agreements to address the IEEPA tariffs, the Trump administration has essentially lost a huge source of leverage with these countries, many of which may try to renegotiate for better terms.

The ruling also sets the precedent that there are no emergency or foreign affairs exceptions to the major questions doctrine, meaning that, even in international relations, the President cannot take actions of “vast economic and political significance” without a clear, specific mandate from Congress. This opens up a whole can of worms for future litigation—there are likely to be major challenges to executive actions, such as export controls, if that authority is based on vague statutory language.

Learning Resources v. the Trump administration, in my opinion, is not a landmark case for American history, but rather a landmark case for the Trump administration. Tariffs are Trump’s bread and butter, a way in which he can throw the weight of the entire American economy behind him to effectuate policy change. With this ruling in place, I think it could do one of two things. It could nudge him to exercise more caution when attempting to utilize the coercive economic power that the U.S. market has, or it could embolden him to find more aggressive, non-economic levers of foreign policy.

*NOTE: As of February 21, 2026, the initial tariff rate of 10% has been increased to 15%

The 2026 Munich Security Conference highlighted a shift toward “wrecking-ball” politics, where the U.S. favors dismantling the traditional rules-based order in favor of a more transactional, “personalist” approach. In response to American volatility and issues like the diplomatic rift over Greenland, European and Indo-Pacific nations are pursuing “strategic realignment” and “double-hedging” to secure their own interests. This includes major initiatives like the India-EU trade deal, the “middle corridor” in the Caucasus, and the controversial “Board of Peace” for Gaza. Ultimately, the conference signaled a global acceptance that the old international order has receded, forcing a new focus on regional hegemony and self-sufficiency.

Graphic: Wikimedia Commons

“Wrecking-ball” politics

Perhaps unsurprisingly, the spotlight was on evaluating the effects of the first year of the Trump administration’s second term on international geopolitics, international law, and the rules-based international order in general. Since Vice President JD Vance’s cutting remarks at the conference a year ago, the 2026 Munich Security Report describes President Trump as a “demolition m[a]n,” someone who believes that meaningful change in foreign policy requires a complete scrapping and reworking of the current rules-based international order in favor of more personalist, more dynamic, “move fast and break things” approach. This “wrecking-ball” approach to foreign policy is evident in President Trump’s military strikes in Iraq, Iran, Nigeria, Somalia, Syria, Venezuela, and Yemen; his recent push to acquire Greenland; and his withdrawal from the Paris Climate Agreement and the World Health Organization.

At this year’s conference, Secretary of State Marco Rubio drew a more nuanced line and tried to reaffirm the U.S.-European partnership in his keynote address: “For the United States and Europe, we belong together,” he stated, “We are part of one civilization – Western civilization.” But he also stressed the need for a degree of self-sufficiency, reciprocity in defense partnerships, and direct action against those who “endanger our global stability” and “shield themselves behind abstractions of international law which they themselves routinely violate.”

So, besides the elephant in the room, let’s get down to brass tax. The big trends are clear: fracturing rules-based international order, middle power hedging, etc. But what were the specific topics of conversation?

The issues in a nutshell

Europe: Greenland, hybrid warfare, strategic realignment, and nuclear deterrence

Despite reaching a “framework of a future deal” on Greenland in January 2026, the diplomatic spat between the Trump administration and Denmark prompted Danish intelligence to explicitly label the U.S. approach a threat to Arctic sovereignty. The increasingly fraught relationship between Washington and the EU has provoked a feeling of uncertainty on the extent to which the U.S. would defend European interests, leading many European leaders to rethink how to secure avenues of collective security in a post-NATO world. For instance, French President Emmanuel Macron stated that France would play a bigger part in deterrence, and analysts believe this may signal the potential of an extended nuclear umbrella to other European nations. The Munich Security Conference was a full-on display of French leadership on defending Ukraine, fending off economic coercion, and possibly replacing the U.S. as Europe’s nuclear security guarantor.

Russia continues to be the most immediate threat to NATO and European security. Aside from the war of aggression in Ukraine, conference participants also further emphasized Russia’s tactics of hybrid warfare. These acts include sabotage, vandalism, cyberattacks, and arson. For instance, Moscow has reportedly been subjecting the Baltic Sea Region to GPS signal jamming and spoofing, which have disrupted airline travel, among other industries.

The past year has reflected a gradual realization by European states that they must be responsible for their own security and economic prosperity, and they have been actively taking steps towards this strategic realignment. Germany, for one, recently announced a €80B rearmament spending package to build its defense industrial base, to which American weapons only account for 8%. Additionally, the EU and India concluded a massive trade agreement in January 2026, which accounts for 25% of the world’s GDP. Europe is pivoting, but the extent to which it is free from U.S. economic and military paternalism remains to be seen.

Asia: Double-hedging in the Indo-Pacific, economic corridors in the Caucasus

Like Europe, key actors in the Indo-Pacific theater are uncertain about the strength and commitment of the U.S. partnership. The result is a kind of “double hedge,” in which these nations try to both align themselves with both of the great powers (the U.S. and China) on one side, and align themselves with each other to mitigate the fallout from a great power clash on the other. On one hand, countries like Vietnam, Thailand, Japan, and South Korea are willing to work with the U.S. for their own economic survival by rebalancing their terms of trade, cracking down on transshipment, and investing in the U.S. On the other, Trump’s capriciousness on his relationship with them and his relationship with Xi Jinping have severely decreased the incentive to take a hard line on China, even when their partnerships with Beijing come at the direct expense of the U.S. For instance, ASEAN has been aligning with China more closely on economic security, as demonstrated by their upgraded free trade agreement last October.

In central Asia and the Caucasus, easing diplomatic relations between Armenia and Azerbaijan has opened up the opportunity for new economic partnerships. On the sidelines of the Munich Security Conference, foreign ministers gathered to discuss the promise of a so-called “middle corridor,” an economic trade route connecting East Asia to Europe via Kazakhstan, in order to secure connectivity, diversified energy, and resilient supply chains. Again, this demonstrates strategic rebalancing efforts on display in Munich.

The Middle East and Africa: Peace talks and the emergence of regional hegemons

The first order of business at Munich 2026 was the Board of Peace and the governance of Gaza. The board is designed to oversee the disarmament of Hamas, the deployment of an International Stabilization Force, and reconstruction. Permanent seats are reportedly tied to a $1 billion contribution toward Gaza’s rebuilding. But the conference also exposed internal rifts in how Gaza’s reconstruction should be carried out. EU Foreign Policy Chief Kaja Kallas and Spanish Foreign Minister José Manuel Albares criticized the board for bypassing the UN and Palestinian agency, describing it as a “personal vehicle” for the U.S. President rather than a legitimate multilateral body.

Meanwhile, there was also a focus on emerging regional hegemons and their role in the nexus between climate and security. On the sidelines of the conference, the Global Center on Adaptation released a report detailing how increasing water scarcity is driving conflicts in the Sahel and Horn of Africa. Regional hegemons, such as the UAE and Saudi Arabia, may start to emerge in the MENA region, not only by how they present themselves at leaders’ summits like the Munich Security Conference, but also how they demonstrate leadership on issues like climate change-induced conflict (e.g., Darfur Water Conflict) and territorial sovereignty (e.g., Somalia-Somaliland Dispute).

In previous security conferences, there was an ambience of “the current international order is under threat. What can we do to shore up the international system?” At Munich 2026, there was a notable break from that rhetoric. When listening in on the panel discussions, roundtables, and keynote addresses, I found that the main theme was “Okay, the rules-based international order as we know it is no longer a thing. Now that we have all acknowledged that, what should we do now?” It’s a slight change in messaging, but one that has significant implications for how trade deals are negotiated, how conflicts are settled, and how international security is defined. The title of this year’s conference was “Under Destruction.” I find that title befitting of the moment.

Recent reports and statements from President Trump signal a weakening dollar. The U.S. dollar maintains its status as the world’s reserve currency, granting the U.S. the power of effective economic sanctions and the privilege of low borrowing costs. However, this position also demands balancing domestic stability with the global need for dollar liquidity, all while navigating the risks of a volatile exchange rate. Current 2026 policies favoring a weaker dollar aim to boost domestic manufacturing and narrow the trade deficit, but they risk eroding international confidence and inviting “de-dollarization” by adversaries and allies alike. Ultimately, a significant loss of reserve status would cripple Washington’s ability to fund massive deficits and signal an end to U.S. economic unilateralism in international security.

Graphic: Stock market trend; http://creativecommons.org/publicdomain/zero/1.0/

The dollar as the global reserve currency

Before the 20th century, the British Pound Sterling was the global reserve currency due to Great Britain’s dominant position in global trade. However, following the end of the two World Wars, the United States was the only major economy that was not completely devastated by the war. With the overvaluation and subsequent decline of the pound, combined with the fact that the U.S. held most of the world’s gold reserves, the dollar continued to strengthen. At the 1944 Bretton Woods Conference, held to establish the post-war economic order, the United States officially became the global reserve currency, pegged to gold at $35 per ounce. When President Richard Nixon ended the dollar’s convertibility to gold in 1971, its value instead became pegged to a floating exchange rate backed by the full faith and credit of the U.S. government.

To this day, the USD remains as the global reserve currency, in large part due to its deep liquid financial markets, utilization in global commodities trading (most notably in oil), and—simply—because everyone else is trading in dollars, raising “switching costs.”

Exorbitant privilege

Most of the world’s central banks hold a significant portion of their foreign exchange reserves in U.S. dollars to back their own currency and pay off international debts. This “exorbitant privilege,” as first described by France’s financial minister in the 1960s, allows the U.S. to borrow at lower interest rates than foreign central banks would otherwise allow. It also means that the U.S. government and American firms can borrow money in USD instead of foreign currency, saving money on transaction costs and making their loans less susceptible to fluctuations in the exchange rate, which could make foreign borrowers’ debt increase.

Exorbitant power

Currently, the dollar accounts for 56% of global foreign exchange reserves, 54% of export invoicing, and a staggering 89% of foreign exchange transactions. Its central role in the global economy also means that most international transactions must deal in USD at some point, especially if using SWIFT, a global messaging system used to communicate instructions for international monetary transfers. That’s leverage.

The U.S. Treasury Department’s Office of Foreign Assets Control has enormous power to issue economic sanctions, freeze foreign assets, monitor cross-border transactions, and kick adversaries off the SWIFT system. Examples include blocking the Russian Federation and affiliated firms from accessing frozen assets via the SWIFT system after Putin’s invasion of Ukraine in 2022, or imposing foreign asset controls on Cuba in 1963. Economic sanctions backed by the USD reserve currency have surged ninefold in the past two decades, a sign of its power in obliging foreign policy actions. But with exorbitant power comes exorbitant responsibility.

Exhorbitant resposibility

Because the global economy depends on the constant supply of USD, the U.S. must persistently run a trade deficit for other countries to keep global trade moving and hold in their reserves, but if it ran an excessive deficit, it would undermine confidence in the dollar as the global currency. This delicate balancing act, known also as the Triffin dilemma, is made more difficult by the fact that people tend to dump foreign assets and purchase U.S. treasuries in times of economic turmoil, inflating the value of the dollar, making American-made goods more expensive, and threatening American job stability.

In addition, the U.S.’s decision on interest rates reverberates throughout the global economy more than other currencies. When the Fed tries to fight inflation by adjusting interest rates, it can inadvertently spur debt crises in emerging markets. Thus, the Fed must sometimes choose between domestic stability and global financial stability.

Strong dollars vs. weak dollars

A strong dollar is good for American importers and consumers of foreign-made products, but it also makes American goods more expensive for foreign buyers. A stronger USD also helps to curb inflation because American-made goods and services must be cheaper to compete with more economical imports.

On the flip side, a weaker dollar also has its benefits. Tradeable American goods and services become more affordable to foreign buyers, increasing U.S. exports. American shareholders of foreign stocks are happy with the appreciated returns, and the Trump administration can boast about the narrowing trade deficit. But bid that French wine adieu, and kiss that Italian cheese goodbye, as imports to the U.S. become more expensive.

International security implications for a devalued dollar

As early as his first term in office and as recently as February 2026, President Trump has signaled his preference for a weaker dollar. And since Trump returned to office at the beginning of 2025, the USD has dropped around 11 index points, around a 10% devaluation in the dollar compared to a basket of six major currencies (the Euro, Yen, Pound, Canadian Dollar, Swedish Krona, and Swiss Franc). In the past few months, Trump has repeatedly pressured the Fed to lower interest rates, imposed an aggressive reciprocal tariff regime, and used his bully pulpit to praise a weakening dollar.

It aligns with many of his priorities—fast growth, onshoring of manufacturing, and a smaller trade deficit. However, a weaker dollar means giving up ground on other areas that are also top of mind, most notably in foreign policy leverage.

First, a weak dollar reduces the coercive leverage of the United States to push on economic pain points. The efficacy of economic sanctions and export controls relies on the costs of noncompliance, which is being cut off from the dollar and thus the global transaction ecosystem. A weak dollar incentivizes countries to de-dollarize, making it easier for adversaries to bypass traditional sanctions regimes. Adversaries may no longer feel the economic bite of the U.S. when they violate international norms, and strategically autonomous countries may feel more comfortable resisting the heavy-handed nature of export controls. The extreme (albeit unlikely) case would look something like countries saying, “You know what, sanction us. We don’t care. We don’t carry that much USD anyway.”

Second, if the dollar weakens for an extended period of time, the U.S. runs the risk of countries losing confidence in the dollar. Such a scenario would severely hinder Washington’s ability to buy cheap debt and run enormous budget deficits, and the U.S. dollar’s status as the world’s reserve currency may yield to a different geopolitical power. As of November 2025, China settles roughly one-third of its foreign trade in yuan. A persistent weak dollar not only accelerates this trend, but it also provides a currency off-ramp for countries to jump ship and denominate their transactions in currencies other than the dollar.

With the rise of digital currencies, BRICS+ nations backing a BRICS currency and the yuan offering alluring alternatives, this would be a domino effect—countries hedging in different denominations, which would cause further collapse of the dollar as the reserve currency through devaluation, making yet more countries hop off the dollar and so forth. It’s a vicious cycle, much like how the pound sterling lost its sheen to make way for its American challenger more than eighty years ago.

In a presidential administration that accomplishes much of its foreign policy and economic statecraft goals through tariffs, losing the status of the world’s reserve currency would spell the end of U.S. economic unilateralism to get things done, for better or for worse. Money may not buy happiness, but it certainly buys influence through necessity. And whatever currency stands atop the rest, it will always be denominated in power.

The New START Treaty—the last remaining nuclear arms treaty between the U.S. and Russia—is set to expire in four days. Given the state of U.S.-Russia tensions, China’s nuclear modernization, and ongoing threats from Iran’s nuclear development, the world will become a more dangerous place without New START. This won’t be due to explosive nuclear action but a quiet inaction on nuclear disarmament agreements.

Graphic: Obama and Medvedev sign the Prague Treaty 2010, Wikimedia Commons

What is New START?

The New Strategic Arms Reduction Treaty, or New START, is a treaty between the United States and the Russian Federation designed to reduce and limit each nation’s strategic offensive arms. It does so by putting a cap on intercontinental-range nuclear weapons, limiting the U.S. and Russia each to:

• 700 deployed intercontinental ballistic missiles (ICBMs), deployed submarine-launched ballistic missiles (SLBMs), and deployed heavy bombers equipped for nuclear armaments

• 1550 nuclear warheads on these ballistic missiles and bombers

• 800 deployed and non-deployed ICBM launchers, SLBM launchers, and nuclear-equipped heavy bombers

New START also outlines verification mechanisms to ensure compliance on both sides, which include 18 annual onsite inspections, extensive data exchanges, notification requirements for changes in force deployment, and confidence-building measures.

Graphic: Federation of American Scientists

New START reduced the U.S. nuclear stockpile by ~1300 warheads, while Russia’s nuclear arsenal declined by nearly 1000 warheads. Following the expiration of the START I treaty in December 2009, New START entered into force on February 5, 2011. It was in place until February 3, 2021, when both sides agreed to its optional five-year extension until February 5, 2026. New START remains the only nuclear arms agreement between the U.S. and Russia, and it has recently been strained.

Where is New START now?

Following the full-scale Russian invasion of Ukraine in February 2022, Russia suspended U.S. onsite inspections of its nuclear arsenal, citing Ukraine War-related sanctions that allegedly prevented their inspectors from traveling to the U.S. The U.S. State Department reported in November 2022 that its Russian counterparts were unilaterally postponing nuclear arms talks without reason.

Then, on February 23, 2023, in his annual Presidential Address to the Federal Assembly, Russian President Vladimir Putin announced that Russia would suspend its participation in New START. Rose Gottemoeller, the State Department’s chief negotiator for New START, and Marshall Brown Jr., the legal advisor to the New START delegation, criticized this move as impermissible by the terms of the treaty and international treaty law.

While committing to abide by the treaty rules on nuclear deployment limits, Russian senior officials soon suspended all notifications on nuclear activities, as required by the treaty, saying:

“There will be no notifications at all. All notifications, all kinds of notifications, all activities under the treaty, will be suspended and will not be conducted regardless of what position the U.S. may take.”

Finally, on June 2, 2023, the United States formally revoked the visas of Russian nuclear inspectors, citing the move as a lawful countermeasure to its treaty noncompliance.

With New START set to expire in four days, there has been very little discussion of any extensions. Putin proposed a one-year extension to the treaty back in September, but it doesn’t seem to have led to anything concrete. And unless a last-minute agreement is reached, the last remaining arms reduction treaty between the two nuclear superpowers will lapse quietly in the background—the risks of this happening should not be overlooked.

What happens if New START…ends?

New START will lapse at perhaps one of the worst times for U.S.-Russian relations. For all his talk about denuclearization with Russia, President Trump’s actions are at odds with this view. For one, he seemed relatively blasé about the impending expiration of New START, saying, “If it expires, it expires. We’ll do a better agreement,” and expressing confidence in his ability to quickly negotiate a new agreement. At the same time, House lawmakers like Brian Mast and Keith Self are in favor of moving past New START to develop a new arrangement that includes China’s nuclear modernization. Meanwhile, Putin’s offer of the one-year extension still stands, but he has not made any public comment about it in the past week. So, what happens if New START expires?

Nuclear warhead limitations may remain, but only voluntarily

New START’s expiration won’t necessarily lead to full-blown nuclear proliferation. After all, Putin expressed appetite to extend the terms of the treaty for a year. In his calculus, it may not be the best decision to proliferate. The War in Ukraine has become a protracted war of attrition, one which tactical nuclear weapons wouldn’t yield significant territorial gains for Moscow, and which strategic nukes (which New START limited) wouldn’t be relevant.

Furthermore, the Trump administration has expressed that peace in Ukraine and subsequent security guarantees would be contingent on ceding territory to Russia. Putin is in a good spot with the Trump administration—knowing President Trump’s capricious attitude towards Russia, it would not be a strategically advantageous move to inflame nuclear tensions with the U.S. at the risk that Washington begins supporting Kyiv more vigorously.

However, this is not to say that nothing will happen. New START provided an explicit, verifiable, and structural constraint on American and Russian nuclear behavior. Making proliferation and deployment decisions based solely on strategic value and voluntary signs of goodwill is not a good thing. Without formal constraints on nuclear stockpiles and vehicles, the possibility of buildups and arms races hinges on the vicissitudes of the current geopolitical climate, which is shaky at best.

New START didn’t actively force the U.S. and Russia to comply with its terms, as shown by Russia’s suspension in 2023, but it did make defection and switching costs incredibly high. Without the treaty in force, each side’s nuclear postures and stockpiles could change at the drop of a hat. Additionally, there is no legal signpost to which the other side can point to shame the nuclear proliferator; they can—dangerously—just proliferate themselves in response.

Risks of a nuclear arms race

The risks of a nuclear arms race will always exist between the U.S. and Russia, but the impetus for proliferation in the U.S. may come from an additional source: China. Since New START entered into force, the number of China’s nuclear warheads has increased by 150%, and the People’s Liberation Army (PLA) has worked diligently to modernize its nuclear arsenal, projecting that it will reach qualitative and quantitative parity with that of the U.S. by the mid-2030s.

China hawks in U.S. think tanks and in Congress have argued against extensions on New START, less so because of the changes to the U.S.-Russia relationship but rather because of the constraints it would place on Washington’s ability to compete with China. For example, the Heritage Foundation argues that the U.S. should actually add nuclear warheads to its stockpile to counter China’s nuclear force. Furthermore, its Project 2025 advocates for the U.S. to reject the ratification of the Comprehensive Test Ban Treaty and engage in nuclear testing if necessary. The Trump administration seems amenable to this posture, announcing back in October that the U.S. would resume nuclear testing to keep pace with Russia, China, and North Korea.

Meanwhile, China hawks in Congress, most notably Mississippi senator Roger Wicker, have vowed to work with the Trump administration to rebuild military strength to counter China’s buildup of intercontinental ballistic missile launchers. The pre-New START, Cold War logic was that a stable environment was one in which the U.S. and Russia had nuclear parity. But now, the incentive could shift more towards the U.S. having parity with the combined nuclear muscle of Russia and China. This, in and of itself, could spark subsequent and retaliatory buildups.

Risks of entanglement

Finally, the U.S. has dipped its foot into conflicts all across the globe, despite its purported return to “Monroe Doctrine” priorities. The New START treaty not only put Russia’s mind at ease over potential proliferation, but it also provided a degree of informal reassurance to non-nuclear states like Iran that the costs of establishing a nuclear weapons program would outweigh the benefits. With unfettered nuclear proliferation, the Ayatollah’s calculus might change.

Damage assessments of U.S. strikes on Iranian nuclear facilities last year showed that nuclear enrichment could resume in only a couple of months if Iran wanted to. And while Israeli strikes also killed many of Iran’s top nuclear scientists, it certainly did not prevent Iran from continuing its nuclear developments. Satellite imagery in late January 2026 showed efforts to salvage materials from bombed sites, and reports from last December reveal suspected attempts from Iran to harden its nuclear program against future U.S.-Israeli strikes.

Why does this matter? Even if the U.S. builds and modernizes its nuclear arsenal in the name of competing with China, it still presents a threat to Iran. If Tehran perceives it this way, it may incentivize a race to develop a nuclear weapon that will deter Washington and Tel Aviv from aiding Iranian protestors via military intervention.

On January 27th, 2026, the Bulletin of Atomic Scientists set the Doomsday Clock at 85 seconds to midnight, marking the closest the world has come to global catastrophe from man-made technologies. In a statement, its Science and Security Board cited the expiration of New START as one of the factors that contributed to that assessment.

We often forget the tension that the Cuban Missile Crisis brought—back then, we were seven minutes to midnight. Yes, I’ve heard all the criticism about how the Doomsday Clock is all relative and “how can we actually be closer to armaggedon now than during the Cuban Missile crisis?” But we don’t live in a bipolar world anymore, and since 1962, four (five if you include Israel) more nations have acquired nuclear weapons. The U.S. and Russia are the nuclear powerhouses, and like it or not, their actions on nuclear proliferation will either strengthen or weaken the protective norms of the nuclear taboo. And it’s up to them which side the coin will land on.

Graphic: Mark Carney at the World Economic Forum Summit in Davos 2026, https://www.flickr.com/photos/worldeconomicforum/8416042077; https://creativecommons.org/licenses/by-nc-sa/2.0/

BLUF

At the World Economic Forum summit in Davos, Switzerland, the cracks of the rules-based international order ruptured. Here, the “middle power” states received a wake-up call, the U.S. was the biggest loser, and China may have passively become the biggest beneficiary of a souring relationship between America and its once closest allies. By rhetorically positioning itself as the stable economic investment and a defender of multilateralism without imperialist ambitions, Beijing may slowly be replacing the U.S. as the go-to nation for economic partnerships.

Music:

Tomasz Redman

Noah Tan

Video clips:

https://www.youtube.com/watch?v=dTvFnC-oFGw

https://www.youtube.com/watch?v=zvdA4V0bZBA

https://www.youtube.com/watch?v=0iHxJmYVyus

Thank you for subscribing. Share this episode.

Graphic: https://thedailyhowl.org/6424/news/iran-on-the-brink-of-collapse-not-yet-but-close/; https://creativecommons.org/licenses/by-sa/4.0/legalcode

BLUF

In the past few weeks, Iran has been shaken up by the largest protest since the 1979 revolution. Mass killings of protestors by the Irainian Revolutionary Guard Corp (IRGC) has demonstrated that repression has continued to work due to organizational deficiences and exploitation of individual pain thresholds. But internal defections from security forces and strikes from the Bazaari class show that the regime is on borrowed time. Without extensive economic reform, the Ayatollah Khamenei cannot expect to repeatedly kill his way to maintaining power. However, it will take absolute and an enduring resolve from Iranian protestors and support from international power centers to bring about change for the first time in almost 50 years.

Music:

Tomasz Redman

Noah Tan

Video clips:

https://www.youtube.com/watch?v=Z5F-_0Rc-q0

https://www.youtube.com/watch?v=ttTJauaO6nc

https://www.youtube.com/shorts/XQbOiiiAMl4

Thank you for subscribing. Share this episode.

Graphic: https://live.staticflickr.com/283/31728113160_0ee7cf7c0b_b.jpg; https://creativecommons.org/licenses/by-nc-nd/2.0/

BLUF #8

The world is at a critical juncture. Recent military operations in Venezuela, ambitions for the Trump administration to own Greenland, and Russia’s escalations in Ukraine suggest that international law is ineffective at constraining powerful states from using force against other countries. Some also argue that international law should not even be under consideration when determining actions of strategic importance. But while international law is admittedly ineffective at holding these states accountable, its value—even from a realist and self-interested standpoint—should not be discounted. As hypocritical or unfair as it seems, the world is better off when international law is frequently violated than one when it is purely at the mercy of strength, force, and power, whoever happens to wield it.

Music:

Tomasz Redman

Noah Tan

Introduction videos:

https://www.youtube.com/watch?v=213s-MHCe3o

https://www.youtube.com/watch?v=-nWG0RKQ4aw

https://www.youtube.com/shorts/SdhZ9vKGNq0

Thank you for subscribing. Share this episode.

Music:

Tomasz Redman

Noah Tan

Video clips:

https://www.youtube.com/watch?v=g14ts0KYa98

https://www.youtube.com/watch?v=m5HkGDAFaqM

https://www.youtube.com/watch?v=Ln9uJndFkuk

https://www.youtube.com/watch?v=DZbySxhAvHA

https://www.youtube.com/watch?v=DZbySxhAvHA

https://www.youtube.com/watch?v=igGYzVDKi2k

https://www.youtube.com/watch?v=A3LgG4ul7hw

https://www.youtube.com/watch?v=9n36dql7CFI

Thank you for subscribing. Share this episode.

Graphic: https://heute-at-prod-images.imgix.net/2026/01/14/5c273f68-2478-4601-a357-bca4662504c7.jpg?rect=0%2C157%2C3000%2C1687&auto=format; https://creativecommons.org/licenses/by/4.0/

On December 8th, 2025, President Donald Trump announced that he was allowing Nvidia to sell its second-best chip, the H200, to a select number of Chinese customers. Critics of the move say it compromises national security by giving Beijing access to more powerful computing abilities than it would otherwise be able to produce domestically. Others say that it undermines America’s strategic partnerships on export controls. And still others remark that it may not even be legal. Meanwhile, supporters note that the move helps to bring in much-needed revenue, maintain a dominant market share in the advanced chip industry, and stave off China’s aggressive push to decouple itself from the U.S. tech stack. Yet, there is something to be said about how important this move really is, especially considering that Beijing might not even accept the deal in the first place.

Audio clips:

https://www.youtube.com/watch?v=CpCxEGjRqsg (Bloomberg)

https://www.youtube.com/watch?v=eomFQABFCI0 (Bloomberg)

https://www.youtube.com/watch?v=sEdgjZ_nxo4 (Reuters)

Music:

Tomasz Redman

Noah Tan

Thank you for subscribing. Share this episode.

Graphic: https://upload.wikimedia.org/wikipedia/commons/5/52/Japan-China_Summit_Meeting_at_the_APEC_South_Korea_2025_%28cropped%29.jpg; https://creativecommons.org/licenses/by/4.0

Since November 2025, China and Japan have been locked in a diplomatic crisis over statements from Japan’s Prime Minister, Sanae Takaichi, which suggested that Japan may intervene on Taiwan’s behalf if China launched an attack. Japan’s justification for military intervention are difficult to defend based on the United Nations Charter, while many of China’s claims and retaliations run afoul in the same way. This dispute is unlikely to be settled on the basis of international law. Any reconciliation will require a concerted effort by both parties’ diplomats to lower the temperature and kick the can down the road on an issue that does not have an immediate answer.

Thank you for subscribing. Share this episode.

Graphic: https://lav1.com/wp-content/uploads/2025/02/ChatGPT_vs_Gemini_vs_Claude.jpg.webp; https://creativecommons.org/licenses/by-nc/4.0/

In September 2025, AI company Anthropic detected attempted cyber-espionage by Chinese hackers who used Claude to carry out most of their attack campaign. Anthropic quickly disrupted the majority of attempts but signaled that the cybersecurity risks of agentic AI will only increase. Another important issue to note is that Anthropic’s report was not co-authored or linked to any external threat intelligence body. AI companies cannot be both risk analysts and policy advocates for their own products. The regulatory vacuum opens the door for private companies to preempt (and further fragment) AI standards and practices with their own prescriptions. Third-party verification mechanisms are irreplaceable in domains where safety can come into conflict with corporate advocacy. U.S. policymakers should place more importance and attention on self-regulatory organizations and federally funded research and development centers, and they should model AI safety evaluations after those of non-profit safety institutes in other industries.

Thank you for subscribing. Share this episode.

Graphic: https://upload.wikimedia.org/wikipedia/commons/1/16/Vladimir_Putin%2C_Steven_Witkoff%2C_Yuri_Ushakov%2C_and_Kirill_Dmitriev.jpg; https://creativecommons.org/licenses/by/4.0

On November 20th, U.S. officials presented Ukrainian President Volodymyr Zelensky with a 28-point peace plan to end the Russo-Ukrainian War, which has recently been characterized by a protracted war of attrition with overlapping zones of territorial control and slow Russian territorial gains in the Donbas region. The American 28-point peace plan offers a framework that largely legitimizes Russian territorial gains, restricts Ukraine’s military capacity and NATO prospects, and ties security guarantees to fragile sanctions conditions, which Ukraine rejects. Europe’s counter-proposal rejects forced territorial concessions and NATO restrictions, offers stronger security guarantees, and calls for frozen Russian assets to fund Ukrainian reconstruction but lacks clear leverage to bring Russia to the table. Lasting peace will be contingent on Ukraine making territorial gains in the Donbas or the West intensifying sanctions enforcement to pressure Moscow.

Thank you for subscribing. Share this episode.

Graphic: https://cdn.slowdownwiseup.co.uk/media/original_images/70194.jpeg; https://www.gettyimages.com/eula?utm_medium=organic&utm_source=google&utm_campaign=iptcurl

BLUF

The U.S. has recently ramped up airstrikes against vessels off the coast of Venezuela. With the arrival of the largest U.S. (and global) aircraft carrier in the Caribbean Sea, there is concern of escalation and even physical altercation between the U.S. and Venezuela. President Trump has broad authority to recognize the Venezuelan government as illegitimate, designate drug cartels as foreign terrorists, and carry out targeted sanctions. However, an insufficient connection between them and the Maduro regime suggests that the actions of the cartels cannot be attributed to the actions of the Venezuelan government. And claims that drug trafficking constitutes an “armed attack” are dubious and likely do not justify U.S. airstrikes on the Venezuelan vessels.

How did we get here?

How legal is it?

Non-recognition of Maduro’s regime

The ability of President Trump to reject the legitimacy of Maduro’s regime is deeply justified in historical and court precedent. The authority of the President to recognize foreign governments is rooted in the “Reception Clause” of Article II in the Constitution. While the Constitution does not explicitly enumerate this authority, it has, nonetheless, been reaffirmed by the Supreme Court as an exclusive power of the President—Zivotofsky v. Kerry (2015) for all you con law nerds out there. On the international law front, de jure recognition of a foreign government is a political discretion and not a legal obligation, so there is pretty wide latitude there as well.

Designation of Narco-terrorist status (and holding Venezuela responsible)

In early 2025, the administration designated groups such as the Tren de Aragua (TdA) and Cartel de Los Soles (CdLS) as foreign terrorist organizations and narco-terrorist groups. Broadly, this action is justified through two statutes. The Foreign Terrorist Organizations designation clause under the Immigration and Nationality Act (INA) authorizes the Secretary of State to designate foreign organizations as terrorist groups. Meanwhile, the administration used the International Emergency Economic Powers Act (IEEPA) to declare a national emergency and thus impose sanctions on these groups. However, critics of this designation argue that designating a group as a “terrorist entity” requires more than criminal activity, including political motivation.

Okay, so what about claims by the White House that these organizations are tied to the Venezuelan government? Under international law, a state can be held responsible for the action of a non-state entity in two ways. First, the ICJ established in United States v. Nicaragua (1984) that a state must have “effective control” over a non-state group, which involves the specific direction (not simply supply or tolerance) of the actions by the non-state entity, to warrant attribution. A lower standard established by the International Criminal Tribunal for the former Yugoslavia (ICTY) requires that a state have “overall control” of a non-state group, which only requires coordination or significant funding to warrant attribution. Intelligence assessments suggest that there is no evidence that Maduro’s regime meets either of these standards.

U.S. intervention in Venezuela: sanctioning, CIA-ing, and sinking

Notwithstanding whether the actions of TdA and CdLS can be attributed to the Venezuelan government, let’s talk about the justifications and

criticisms of U.S. actions towards and around Venezuela.

Economic sanctions and CIA operations

Under domestic law: The Trump administration launched broad economic sanctions under statutes like IEEPA and the National Emergencies Act. Critics argue that these broad authorities are not absolute and come with major separation of powers concerns, as they encroach on Congress’s powers to regulate foreign commerce and provide oversight. However, whatever the merits of these critiques are, it goes without saying that multiple administrations from Carter to Obama have invoked this broad executive authority. As far as clandestine CIA operations go, the President can claim broad authority under the National Security Act of 1947 to approve covert actions.

Under international law: Typically, intervention in the external affairs of a foreign state is impermissible without approval from the UN Security Council under Chapter VII authority. However, there are a few exceptions. Let’s explore:

* Self-defense under Article 51 of the UN Charter after or in imminent danger of an armed attack. The bar for an armed attack in international law is quite high; the U.S. likely does not have a case here.

* Consent of the target state. This is clearly not the case—the U.S. certainly does not have Maduro’s consent, and even if Trump received consent from Edmundo Gonzalez (which the U.S. recognizes as the legitimate president), he does not have authority under international law to request support, as he is not the de facto leader of Venezuela.

* Humanitarian intervention: This is not a widely accepted exception, but it has nonetheless been invoked as a justification for intervention many times before. As far as economic sanctions on Venezuela go, Trump might have a case here. There is widespread evidence of human rights abuses from the Maduro regime. Targeted economic sanctions against Venezuela could be justified here. Notice how I said “economic sanctions” here and not airstrikes? We’ll get to that in a bit.

Regarding CIA actions, there is a similar issue of violating the principle of sovereign equality and non-intervention in a state’s internal affairs under Article II of the UN Charter. Yet, covert actions have been used in multiple Presidential administrations as well.

Airstrikes on Venezuelan vessels

The justifications for these strikes: The Trump administration argues that the flow of drugs to the U.S. shores constitutes a direct national security threat against the American people; thus, these strikes are warranted as a defensive measure. What about the fact that these extrajudicial killings occurred in Venezuelan territory? Well, there is a justification about jurisdiction known as the “unwilling or unable” doctrine. Under this disputed area of customary international law, the Trump administration could justify carrying out operations outside its jurisdiction because Maduro created a friendly environment for these drug syndicates, thereby showing an unwillingness to address threats that originate on Venezuelan soil. Finally, the “Commander-in-Chief” clause in Article II of the Constitution gives the President latitude to direct military operations in domains that Congress has approved, such as counternarcotics and counterterrorism.

So, what’s the issue?

Why these strikes may be illegal: The validity of the “self-defense” claim by the Trump administration relies on a threshold known as “the gap,” or the difference in severity, scale, and consequences that separates an armed attack from less serious kinetic interventions. The U.S. can only strike these vessels in self-defense if Venezuela has met the bar for an armed attack in the gravity and effects of cocaine and marijuana coming to the U.S. I’ll leave this judgment up to you, but my intuition is that it doesn’t.

The Trump administration has also claimed that the U.S. is in a state of armed conflict with these “narco-terrorists.” Okay, let’s assume for a sec that we are in a justifiable state of armed conflict with TdA and CdLS. The Trump administration still runs afoul of jus in bello principles, or the laws of armed conflict. First, these boat strikes would need to adhere to the principle of distinction, discriminating between combatant and noncombatant people aboard these vessels. The administration has not provided evidence that this determination was made. Okay, what about collateral damage? Civilians are killed all the time in armed conflict. Yes, this is true, but states must account for proportionality, which aims to balance military force with military advantage. In this case, you have lethal force, used against mostly small boats, all with a disputed threat level, and without clear regard for noncombatant immunity. Furthermore, if U.S. forces were able to track these vessels through ISR and could theoretically intercept the vessels by other means, it is not entirely clear that these strikes were militarily necessary.

Invasion of Venezuela?

Today, the U.S.S. Gerald R. Ford reached the Caribbean Sea. What does this mean for the future? Well, if I knew how the future would unfold for everything in the world, my Substack would be a lot more popular, and I’d be a much wealthier man. But Trump has noted that, in addition to airstrikes, the U.S. would commit to “stop the drugs coming in by land.” And with the massive mobilization of troops by Maduro to defend against U.S. incursions, this escalatory environment is concerning to say the least. Like all history, hindsight is 20-20, and for now, we’ll just have to wait and see.

*Update: As of around 10pm last night, President Trump said that the U.S. may be open to discussions with Maduro.

Thank you for subscribing. Share this episode.

BLUF

Some say we are in an AI bubble because the hype valuations outpace actual revenue and because the AI market is highly concentrated. However, government investment and institutional support, and existing applications of AI in the real economy may argue differently. Whether or not AI is a boom or bust will depend on the speed of AI innovation, adoption, and market corrections.

Graphic: https://miro.medium.com/v2/resize:fit:1400/0*oi12d4E0oJL8LJXY; https://creativecommons.org/licenses/by-nd/4.0/

On November 7th, 2025, the Financial Times reported that tech stocks suffered their worst week in sell-offs since market reactions to Trump’s “Liberation Day” tariffs in April 2025. How bad? The value of the eight most highly valued stocks in AI plummeted by $800 billion and led to a 3% drop in the NASDAQ. This massive sell-off came on the back of reports that we could be in an AI bubble. OpenAI’s CEO, Sam Altman, told reporters back in August of this year, “Are we in a phase where investors as a whole are overexcited about AI? My opinion is yes. Is AI the most important thing to happen in a very long time? My opinion is also yes.” Even Michael Burry, the guy who predicted the 2008 financial crisis, bet $1 billion on the collapse of Nvidia and Palantir. So what’s all the hubbub about AI, and is this “bubble” set to burst?

What’s all this talk about a bubble?

In economics, a bubble simply means a situation in which speculation, hype, and herd mentality cause an asset’s price to outpace its intrinsic value. Stock prices are not driven by how much an asset is actually worth, but rather by how much people think it’s worth. The fervor feels great at first. Yes! I got in before this stock took off! Oh my gosh, I’ve got to get in before I miss the boat! Yet, in the case of industry bubbles, what goes up must come down. There is a juncture in which investors realize that the fundamental value of a conglomerate of companies is actually not worth as much as the frenzy would otherwise dictate. It starts small; a few investors quietly sell off their shares, but it can quickly lead to a panicked mass sell-off that can tank the industry.

A classic case of this lifecycle is the dot-com bubble. In the late 1990s, the explosion of internet-based companies spurred huge and nearsighted optimism about the future of the internet’s application in the economy. Yet, a mixture of investment capital stalling and the inability of the “dot-com” companies to return profits to meet the speculated valuations led to a massive sell-off and the NASDAQ spiraling 77% down from its peak. Other cases, including the 2008 financial crisis, follow this same model:

1. Displacement moment: a new industry, company(ies), or technology disrupts the market, promising to revolutionize the economy.

2. Overvaluation period: the stocks for these companies boom as new investors frantically try to enter the market, artificially pumping up the asset value.

3. The “uh-oh” moment: some investors begin to see the writing on the wall and sell their assets.

4. The “don’t be the sucker” moment: panic ensues. People sell off their shares rapidly to cut their losses and avoid being the one who ends up with the stock after the crash.

It’s no secret that AI is a booming industry. But is it an overvalued industry? And if so, what stage in the cycle are we in?

Why we might be in an AI bubble

Huge investments and high valuations outpace earnings

Investment in AI is sky high, and rising. Private investment in AI has shot up from $15 billion in 2015 to its $145 billion peak in 2021. In 2024, private investment was $130 billion. Furthermore, more than 1300 AI start-ups exceed a $100 million valuation, while 498 AI companies are valued at or above $1 billion.

Yet, the outlook on actual profits may tell a different story. Take OpenAI, for example, which is one of the biggest players in the industry. The company has made about $1 trillion in AI investment deals but is only set to return around $13 billion dollars in revenue. This story is just one of many stories of investment and valuation outpacing earnings reports.

Many try, few triumph

As a former Stanford student, I can tell you firsthand…the stereotype is true. Stanford kids LOVE their startups. And in Silicon Valley, it’s hard to walk from one end of campus to the other without someone talking about how their startup idea is to do this thing that is already being done, but “hear me out…add AI.” Whether it be the promise of the elusive unicorn status, the Silicon Valley hype, or an attractive post-grad option in a stalling job market (a topic for another discussion), the market is flooded with AI startups and players from all different rounds of seed funding.

However, if you actually look at the big players in AI—Nvidia, Microsoft, and Apple—you’ll see that these three companies alone account for 41% of the S&P 500 Technology index. This market concentration is eerily similar to that of the dot-com bubble, where the top seven NASDAQ stocks made up a significant portion of the market.

Why we might NOT be in an AI bubble

Governmental institutions are poised to support AI development

Recent government initiatives, such as President Trump’s AI Action Plan, which emphasized accelerating AI innovation and adoption through streamlined regulation processes, supporting AI infrastructure projects, and encouraging private-public AI partnerships, have boomed. Furthermore, the Chief Digital and Artificial Intelligence Office (CDAO) recently announced a $200 million contract each with Anthropic, Google, OpenAI, and xAI to develop agentic workflows that will assist with mission-critical areas within the Pentagon.

This broad institutional backing signals that there will at least be one major stable partner in the AI market, the U.S. government itself. Like the airline industry post 9/11, banking industry in 2008, and automotive industry in 2009, the AI market could be classified as “too big to fail,” in which the U.S. government would bail out or intervene in certain industries that are so important to the U.S. economy that their failure would cause broad economic harm.

Evidence of long-term value

The dot-com bubble burst because internet-based companies were unable to find sufficiently broad or profitable applications for their services. There is reason to believe that AI is already different from this. AI is already demonstrating broad applications in cloud computing, semiconductors, enterprise software, and other key sectors. Because of these broad-based offerings, AI promises to add concrete value to a broad range of industries, which can help it build resilience to failures in individual sectors.

Boom or bust? What’s the verdict?

In short, whether or not the “AI bubble” will burst depends on a couple of factors:

1. Evolution or involution: AI advocates say that models will only get better at an increasing rate. A recent example of this is the release of AlphaEvolve earlier this year, which uses a recursive self-improvement (RSI) process to iteratively learn and improve by itself. On the flip side, the AI cynics cite the release of ChatGPT 5 as a prime example of the AI plateau, where the GPT 5 model did not demonstrate the exponential improvement that some thought, and even fell short in other areas, such as accuracy and speed. In this scenario, the AI market would more so be defined by intense competition among an increasing number of players trying to remake the same wheel to fit a finite range of narrow applications.

2. Adoption, adoption, adoption: AI will only be as good as how it is applied to the real economy. What sectors can AI be used to optimize data analysis? What labor-intensive industries can embodied AI be substituted for humans to increase production efficiency and mitigate high-risk jobs? How can recursive self-improvement and agentic AI be used to discover new drugs, test their safety, and optimize the roll-out of those drugs to communities that are giving pharmaceutical companies demand signals for cures to certain diseases? And notwithstanding how much of this will actually happen, will we even let it? What are the socioeconomic barriers to AI adoption? Amazon is already planning to replace half a million jobs with robots from Kiva Systems. Where will these workers go, and if this happens on a large scale, will we really be prepared to address the major distortions in the labor market?

3. Bear walk or bear run: Bubble bursts tend to happen because of phase 4, the “don’t be the sucker” moment, or in other words, the panic that ensues when people intractably sell their shares, sometimes known as a bear run on the stock. This would be bad. However, if the AI market can self-regulate by distinguishing the “AI hype” companies from the here-to-stay companies, which have diversified revenue streams beyond AI and have the earnings reports to prove value beyond seed funding, there might not be the sudden crash we saw in 2000 or 2008.

So, the bottom line: Some say we are in an AI bubble because investments, valuation, and “hype” are outpacing fundamental markers of company value. Furthermore, the high volume of competitors with a significant market share concentrated among three companies means that the entire market hinges almost entirely on the performance of the big players. However, government investment and institutional support signal that the current administration will not allow this bubble to burst quite yet. And on top of that, AI is already proving to have broad applications in the real economy. Finally, whether or not AI is a boom or bust will depend on whether AI innovation can keep pace with the hype, whether AI can be sufficiently adopted into the real economy, and whether market corrections adjust slowly enough to allay fears of a mass sell-off.

Graphic: https://medium.com/@pierf/the-engineered-ai-bubble-unprofitable-reality-and-physical-limits-1eda881279f9; https://creativecommons.org/licenses/by-nd/4.0/

BLUF

Some say we are in an AI bubble because the hype valuations outpace actual revenue and because the AI market is highly concentrated. However, government investment and institutional support, and existing applications of AI in the real economy may argue differently. Whether or not AI is a boom or bust will depend on the speed of AI innovation, adoption, and market corrections.

Thank you for subscribing. Share this episode.