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Ifo Institute: Business Climate for Residential Construction in Germany Slumps
MUNICH, Germany, May 16 -- ifo Institute issued the following news release on May 15, 2026:* * *
Business Climate for Residential Construction in Germany Slumps
Sentiment in residential construction in Germany deteriorated massively in April. The business climate fell from -19.3 to -28.4 points, the strongest decline since April 2022. Companies' expectations, in particular, were much more pessimistic, and current business was also assessed as being worse.
"Geopolitical uncertainty is now also weighing on residential construction in Germany," says Klaus Wohlrabe, Head of Surveys at ifo. "With ... Show Full Article MUNICH, Germany, May 16 -- ifo Institute issued the following news release on May 15, 2026: * * * Business Climate for Residential Construction in Germany Slumps Sentiment in residential construction in Germany deteriorated massively in April. The business climate fell from -19.3 to -28.4 points, the strongest decline since April 2022. Companies' expectations, in particular, were much more pessimistic, and current business was also assessed as being worse. "Geopolitical uncertainty is now also weighing on residential construction in Germany," says Klaus Wohlrabe, Head of Surveys at ifo. "Withfragile supply chains and rising financing costs, the construction industry is facing multiple risks at once."
Concerns about potential supply problems with key intermediate products are growing again. In April, 9.2% of companies reported constraints in their supply of materials.
Previously, the figure had been only about one% over a two-year period. Basic materials are affected in particular.
"As far as current business is concerned, the situation remains unchanged," says Wohlrabe. The share of companies reporting too few orders remained virtually unchanged at 43.8%. The cancellation rate also remained stable at 10.8%.
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More Information
Survey (https://www.ifo.de/en/facts/2026-05-15/business-climate-residential-construction-germany-slumps)
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Original text here: https://www.ifo.de/en/press-release/2026-05-15/business-climate-residential-construction-germany-slumps
[Category: ThinkTank]
Hudson Institute Issues Commentary to The Hill: Why Penalizing Partners Like Germany Would Weaken U.S. Power
WASHINGTON, May 16 -- Hudson Institute, a research organization that says it promotes leadership for a secure, free and prosperous future, issued the following commentary on May 15, 2026, by Daniel Kochis, senior fellow in the Center on Europe and Eurasia, to The Hill:* * *
Why Penalizing Partners Like Germany Would Weaken US Power
Until recently, U.S.-German ties were a bright spot in the transatlantic alliance. That changed abruptly after Chancellor Friedrich Merz publicly accused the Trump administration of being "humiliated" by Iran and lacking a convincing strategy for the war. Days later, ... Show Full Article WASHINGTON, May 16 -- Hudson Institute, a research organization that says it promotes leadership for a secure, free and prosperous future, issued the following commentary on May 15, 2026, by Daniel Kochis, senior fellow in the Center on Europe and Eurasia, to The Hill: * * * Why Penalizing Partners Like Germany Would Weaken US Power Until recently, U.S.-German ties were a bright spot in the transatlantic alliance. That changed abruptly after Chancellor Friedrich Merz publicly accused the Trump administration of being "humiliated" by Iran and lacking a convincing strategy for the war. Days later,Germany -- recently praised as a "model ally" -- was hit with news of a planned withdrawal of 5,000 U.S. troops.
This was not an isolated move. Reports suggest President Trump is informally sorting allies into tiers -- rewarding some while publicly punishing others. Troop withdrawals may be just the start; even longstanding diplomatic positions, like U.S. support for British sovereignty over the Falkland Islands, could be on the table.
It is an approach that may feel like leverage, but it will backfire.
Germany shows why. U.S. forces there underpin American power projection across Europe, the Middle East and North Africa. In the current war against Iran, German territory has been indispensable for command and control, logistics and strike operations -- especially as other European countries have restricted access.
At the same time, Berlin is finally doing what Washington has long demanded: rearming at a breakneck pace.
Germany has signed 47,000 defense procurement contracts since 2022 and is swiftly emerging as a future bedrock of transatlantic security, both capability and defense industrial capacity. This year alone, it will spend $127 billion on defense, far outpacing France. Pulling troops now does not just send a political message; it undercuts a partner that is actively becoming more capable and more useful.
It also is not cost-free. Germany helps offset the burden of hosting U.S. forces -- costs that do not disappear if troops move elsewhere. And there is a hard reality: The U.S. presence in Europe is already a shadow of its former self. There is little left to cut without weakening coverage across multiple theaters.
The unit slated for removal is a permanently stationed brigade combat team, the 2nd Cavalry Regiment. Based in Vilseck, Germany, it is crucial for signaling deterrence, deploying regularly near the borders of Belarus and Russia to take part in exercises with allies or to showcase American presence on NATO's eastward flank.
While preferable to complete removal, even reshuffling forces within Europe based on political favor would create headaches. Alternatives are limited. Moving major systems is not simple and shifting presence eastward while hollowing out established bases in the west risks new political frictions among allies.
Even Poland, thought to be a potential future recipient of additional U.S. troops removed from longstanding U.S. bases in Western Europe, is treading carefully. Last week, Prime Minister Donald Tusk cautioned that while Warsaw is eager for additional U.S. forces, it did not want to "poach" them from other NATO nations.
Meanwhile, across Europe, public opinion of Washington is already souring. A U.S. seen as punitive or transactional will only deepen that trend, making it harder -- even for friendly governments -- to align openly with Washington. For some leaders, such as Spain's Pedro Sanchez, confrontation with the U.S. could become a domestic political asset.
The likely result is not compliance; it is backlash. European governments will not assume they are exempt. The lesson will be obvious: Germany today, someone else tomorrow. And with defense budgets rising, Europe will have options -- whether in arms procurement or broader economic ties.
None of this is to say U.S. grievances are unfounded. But there is a difference between managing disagreements and weaponizing them. The former strengthens alliances; the latter corrodes them.
Today, some European governments may be willing to defy Washington. Tomorrow, different leaders in those same nations may swing back -- if the political space to move closer in alignment remains open to them.
The message sent by withdrawing troops from Germany will not land as intended. If anything, it would accelerate the very drift Washington should be trying to prevent.
Punishing allies may feel decisive. If carried out, it would ultimately prove self-defeating.
Read in The Hill (https://thehill.com/opinion/national-security/5875687-troop-withdrawal-germany-impact/).
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At A Glance:
Daniel Kochis is a senior fellow in the Center on Europe and Eurasia at Hudson Institute.
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Original text here: https://www.hudson.org/national-security-defense/why-penalizing-partners-germany-would-weaken-us-power-daniel-kochis
[Category: ThinkTank]
Hudson Institute Issues Commentary to National Review: Strengthen NATO, Don't Wreck It
WASHINGTON, May 16 -- Hudson Institute, a research organization that says it promotes leadership for a secure, free and prosperous future, issued the following commentary on May 15, 2026, by Keystone Defense Initiative Director Rebeccah L. Heinrichs to National Review:* * *
Strengthen NATO, Don't Wreck It
America needs its allies.
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Many on the right have joined President Donald Trump's heated ridicule of the behavior of our European allies during Operation Epic Fury: their risk aversion, penchant for process over decision and action, and overall lack of preparedness and capability to confront ... Show Full Article WASHINGTON, May 16 -- Hudson Institute, a research organization that says it promotes leadership for a secure, free and prosperous future, issued the following commentary on May 15, 2026, by Keystone Defense Initiative Director Rebeccah L. Heinrichs to National Review: * * * Strengthen NATO, Don't Wreck It America needs its allies. * Many on the right have joined President Donald Trump's heated ridicule of the behavior of our European allies during Operation Epic Fury: their risk aversion, penchant for process over decision and action, and overall lack of preparedness and capability to confrontthe Iranian terror threat, while simultaneously criticizing the one ally with the will and capability to do so. The transatlantic alliance has in fact been unhealthy for some time, dating back to before the Obama administration conspired with German Chancellor Angela Merkel to reset relations with Russia and pursued policies, including the Paris Climate Accords, that weakened the West to the advantage of China. But there is much more to the story, and today both sides of the Atlantic should grapple with some hard truths and work to end the feuding. The United States needs NATO allies and is the indispensable leader of the alliance for the foreseeable future.
"I am not currently recommending any additional changes to our posture in Europe." That was the congressional testimony of General Alexus Grynkewich, commander of the U.S. European Command and the NATO Supreme Allied Commander Europe, on March 18. Roughly six weeks later, the Department of Defense announced that it would withdraw 5,000 American troops from Germany. The announcement followed President Trump's Truth Social post suggesting that he was considering withdrawing troops after German Chancellor Friedrich Merz claimed that Iran was "humiliating" the United States.
The Department of Defense then sent a notice to Congress specifying that the planned deployment of a Long-Range Fires Battalion (LRFB) to Germany was also canceled. That deployment was possible only because Trump rightly withdrew the United States from the Intermediate Nuclear Forces (INF) Treaty during his first term, after Russia deployed prohibited systems in violation of it. He did so over intense opposition from Democrats. The Biden administration was later forced to grapple with the same acute Russian threat to Europe and, remarkably, initiated the deployment of the LRFB to strengthen deterrence and prevent Russia from expanding its war beyond Ukraine. The LRFB deployment could have been a masterly strategic accomplishment of Trump's second term. But it is now poised to be undone by his own war department -- if Congress permits it. There is already bipartisan objection to the announcement.
In early March, Merz said that he and Trump were "on the same page in terms of getting this terrible regime in Tehran away." He was right. The Islamic Republic's terrorism exports and missile force have posed as great a threat to European security as they have to American and Israeli security. But the war is unpopular in Germany, and Merz's claim that the Iranians were "humiliating" the United States was aimed at a domestic audience. As bad as the comment was, removing U.S. troops from Germany isn't a reasonable punishment in part because, despite Merz's public kvetching, Germany has been quietly and steadily enabling Trump's ongoing war against Iran. General Grynkewich explained during those recent congressional hearings that, despite the initial and highly publicized British refusal to permit the United States to initiate bomber strikes against Iran from the joint base at Diego Garcia, and despite complaints from some European politicians, the reality is that European countries are helping, and more than passively so.
Merz's public insistence that "Germany is not a party to this war, and we do not want to become one" does not change the fact that Germany has been key to Operation Epic Fury. Ramstein Air Base is a central command-and-logistics hub for the military campaign, and there are no flight restrictions at German bases. Germany under Merz has also been receptive to the United States' urging that Europeans share more of the defense burden across NATO and shoulder more of the help for Ukraine. Germany is the largest European buyer of American weapons and the largest supplier of weapons to Ukraine. Under Merz, Germany has agreed with Trump's criticisms of previous German policies to dismantle nuclear power plants in favor of dependence on Russian gas. Friedrich Merz is no Angela Merkel.
In London, Prime Minister Keir Starmer's ghastly decision to prevent the United States from operating freely from Diego Garcia was reversed within days. The United States has since operated freely out of the joint base, as well as out of RAF Fairford in Gloucestershire and a network of other U.K. bases, including RAF Menwith Hill, RAF Molesworth, RAF Croughton, and RAF Digby. And, despite Starmer's condemnations of the United States' war against the Iranian regime, the U.K. military is working closely with the Americans on providing intelligence. British politicians may have pandered to domestic audiences who oppose the war, but British air defenders have been busy intercepting hundreds of Iranian drones heading toward Gulf states where American forces are deployed, and the Royal Air Force is flying sorties in the Middle East to help counter Iranian attacks.
France's Emmanuel Macron has also aggravated Trump. At a dinner, Trump said Macron was willing to help with the Strait of Hormuz, but only after the war ended. Trump mocked the French president and derided NATO as a "paper tiger." But France is also playing an important role in support of Operation Epic Fury. The French are giving the United States access to sovereign French bases and granting overflight access to hundreds of sorties. They sent air-defense systems, including a SAMP/T and multiple helicopters, to the United Arab Emirates, Qatar, and Kuwait. This is in addition to the dozens of Rafale fighters they have deployed to the UAE for air-to-air defense. The French armed forces have moved their sole aircraft carrier from the Baltic Sea to the Eastern Mediterranean, positioned eight frigates in the wider Northern Indian Ocean, and are currently routing two minesweepers to the region.
Among NATO's smaller members, public support from their governments has been clearer. Belgium's defense minister called the U.S. war "a righteous cause to try to decapitate the Ayatollah regime." All three Baltic states have expressed support for the United States. Foreign Minister Margus Tsahkna of Estonia stated that Estonia backs the United States and Israel in "every action that curbs the Iranian regime's capabilities," and dozens of Estonian parliamentarians signed a statement of support. Lithuania's president put the matter bluntly: "We cannot say with one hand that the presence of U.S. troops on the territory of Lithuania is a matter of course and we simply accept it as a given, but when we are asked to contribute to international missions, we say that this is none of our business." No doubt if they weren't rightly prioritizing the acute threat from Russia, they would send whatever military forces they had.
Asign of the strange times is that some commentators, taking cues from President Trump's public haranguing of European allies, now suggest that the Gulf states are more helpful allies than old Europe. Sure, Saudi Arabia, Qatar, and the UAE are cooperating with the United States and Israel by sharing intelligence and allowing logistical access. It represents a welcome change in the region. Still, this new and bolder support does not come close to the contributions the United States receives from European allies, whose integration with the U.S. military reflects decades of joint planning, earned trust, and military competencies forged through combat in the Middle East and coordinated war-gaming exercises as part of active deterrence against Russia.
Even so, Trump has threatened to punish Europeans for not doing enough or for their political leaders' public criticisms. Beyond removing troops from Germany, ideas have ranged from withdrawing troops from Spain -- despite the indispensability of Naval Station Rota -- to no longer recognizing the Falklands as British territory, a report mercifully dismissed by Secretary of State Marco Rubio. Redeploying U.S. forces may sometimes be necessary as threats change, but removing troops as punishment from host nations that enable U.S. power projection amounts to cutting off America's nose to spite our face.
This does not mean that American frustrations with European allies aren't legitimate. Starmer's public criticisms of the war, antagonistic remarks about Israel, and initial refusal to grant full access to Diego Garcia earned anger not only from President Trump. Republican members of Congress who value NATO and the special relationship were dismayed by London. Spain was -- and remains -- the European ally most defiant of Trump and opposed to seeing the United States win Epic Fury. Prime Minister Pedro Sanchez not only condemned the war; the socialist leader also lambasted Trump and has refused to permit United States strikes from Spanish bases. Spain has long been an obstinate NATO member and was the only ally to refuse Trump's call for defense spending at 5 percent of GDP, the alliance's stated standard.
The fact is, though, that while NATO's members share a national security interest in an American victory, Operation Epic Fury is not a NATO mission. The United States neither informed nor consulted allies, nor did it ask for assistance, before it and Israel went to war. There were sound reasons for acting this way, but it nonetheless makes it politically difficult for European leaders to express enthusiasm at the start of the war. Compounding matters, Trump initiated Epic Fury mere weeks after threatening to forcibly take control of Denmark's territory of Greenland and publicly humiliating ally leaders who opposed those threats.
Trump's focus on Greenland has shone a spotlight on the United States' profound national security interest in preventing Russia or China from taking control of the Arctic. But the threat to forcibly seize Greenland -- even if one believes it was a Trumpian maximalist bluff -- created a serious rupture of trust among allies who had been willing to bear with tariffs and public rebukes, and it collapsed goodwill among the most pro-American factions in European capitals, where favorable views of the U.S. dropped to an all-time low.
European conservatives from the U.K. to Germany to Poland who otherwise expressed solidarity with Trump and the American right on border security and immigration also condemned the Greenland gambit and did so forcefully. And there is no political support in the United States for seizing Greenland, which likely explains why the president dropped the issue and left it to Rubio and NATO Secretary General Mark Rutte to pursue a diplomatic resolution with Denmark.
What made the episode especially breathtaking was its timing. Just months earlier, Trump had been praising Europe's willingness to invest more in conventional defense and shoulder a greater share of NATO's burden. The Greenland crisis also followed immediately after the highly successful U.S. raid to capture Venezuelan dictator Nicolas Maduro. That achievement should have dominated the news cycle, allowing the administration to highlight its military competence and deter adversaries. Instead, Trump's Greenland threats had a serious negative impact on U.S. influence and worked directly against his broader objectives, including rallying allies to help open up the Strait of Hormuz.
It is one thing to demand that allies rebuild and invest in their militaries and carry a greater share of the collective defense burden; it's quite another to castigate them, let alone threaten their sovereignty. It should surprise no one that European democratic leaders now lack domestic political mandates to openly join the war. And yet, because of abiding shared interests, Europeans have been working with the United States to execute Epic Fury, if only quietly.
So what now? Europeans are at least a decade or more from having the military capabilities to replace what the United States provides. They need the United States to remain the backbone of NATO for the foreseeable future. And the United States needs the collaboration of its European allies not only to help provide security against Russia but to project power into Africa and the Middle East from European bases. Again, Grynkewich explained this to Congress. He said, "To fly bombers from the United States, or even from locations in the theater, and project power into the Middle East requires a tanker bridge. That tanker bridge is projected from USEUCOM bases." In plain English: we refuel, safely, from supportive and trustworthy European allies. To remove the infrastructure in Europe that gives U.S. forces communications, weapons-detection abilities, intelligence, and logistics would cost the United States dearly.
It's time for the U.S. and Europe to cease the feuding.
The United States is winning against the Islamic Republic, but to turn military success in the campaign into a geopolitical masterstroke, Trump will need an international armada to escort ships through the Strait of Hormuz. And to get that, he will have to adjust his diplomatic approach -- not toward our enemies but toward our allies. Rather than publicly berating allies, he should move the disagreements to private channels. It should go without saying, but there should be some formal acknowledgment on the U.S. side that there will be no more threats over Denmark's territory. And on the other side of the Atlantic, European leaders should explain to their skeptical publics that the American campaign against the Iranian regime has served their interests, has made them safer, and merits support.
Security conditions in the Strait of Hormuz are sufficient for the mission to be underway, which is why the United States is more forcefully transiting the strait with U.S. Navy destroyers. Operation Epic Fury has eliminated most of Iran's defense-industrial base, including its ballistic missile arsenal, launchers, and long-range drones. Iran's navy has been largely neutralized after losing 150 warships and the bulk of its naval mine inventory. More than 250 senior Iranian officials have been killed and some 2,000 command-and-control structures struck.
Even so, the rump Iranian regime continues to try to attack U.S. ships, and it appears that Trump is prepared to resume military operations against Iran to further degrade the Islamic Revolutionary Guard Corps' ability to terrorize the strait. European leaders should support the resumption of U.S. strikes and stand ready with a multinational armada as soon as the last wave of operations concludes. The more the United States can internationalize its efforts to restore and maintain a free and open maritime corridor through the strait, the faster -- and more permanently -- it can reopen a choke point that carries roughly 25 percent of global seaborne energy. The official position of the U.K. is that it is willing to help keep the strait open, and the French defense minister has said that the French, Belgians, and Dutch have a joint mine-clearing program that they could contribute. They're not the only potential partners. Bringing more allies into the campaign would help overwhelm whatever IRGC elements remain willing to harass shipping along the coast.
Although U.S. energy dominance enables the United States to absorb disruptions caused by Iranians terrorizing the strait, it remains politically desirable for Washington to end the war decisively -- and as soon as possible -- and to bring gasoline prices below $3 per gallon. For U.S. allies and partners, reopening the strait is not merely desirable but imperative.
India, for example, sources nearly half of its crude oil through the strait, and the conflict is already inflicting costs on the population of this crucial U.S. partner. While only about 4 percent of European crude oil imports pass directly through Hormuz, Europe has reduced its dependence on Russian energy by sourcing roughly 8 percent of its liquefied natural gas import requirements from Qatar, shipments that must also pass through the strait. That shift followed pressure that began during the first Trump administration to end reliance on Russian energy, including sanctions implemented on the Nord Stream 2 natural gas pipeline. To complete the picture, 75 percent of Europe's jet-fuel imports come from the Gulf region. For Japan, around 95 percent of oil imports pass through the strait; for South Korea, roughly 70 percent of crude imports do so.
It is intolerable for the United States or any of its allies to permit Iran to run an extortion racket by charging fees for safe passage. Doing so would concede unacceptable leverage to Tehran -- and by extension, to China, Iran's most powerful backer -- and set a dangerous precedent for Chinese ambitions in the South China Sea. Whether or not Trump says he needs allies and whether or not allies want this war to be their war, shared interests remain clear: The Islamic Republic must lose and the United States and Israel win.
Trump is at his best when he urges Europeans to be strong and to work with the United States. As Secretary Rubio said in his Munich speech, "We believe that Europe must survive, because the two great wars of the last century serve for us as history's constant reminder that ultimately, our destiny is and will always be intertwined with yours. . . . We should be proud of what we achieved together in the last century, but now we must confront and embrace the opportunities of a new one -- because yesterday is over, the future is inevitable, and our destiny together awaits."
King Charles III recently concluded a warm state visit to the United States, which could not have been timelier. Trump and Charles got along very well, and Trump even lifted sanctions on Scottish whiskey as a favor to Charles -- even after Charles delivered a speech to a joint session of Congress extolling Ukrainian bravery and underscoring the need to support NATO. The address elicited a bipartisan standing ovation and compliments from Trump. The visit gives Europeans something to build on. Repairing transatlantic relations is necessary, and Trump has shown he is willing to change course if it serves his interests. Trump's direction to remove 5,000 American troops from Germany may be redeemed, if, for example, the president shifts them to NATO's eastern front -- Poland or Romania -- and he can easily reverse the decision not to deploy the LRFB missile battalion. Poland has already publicly signaled it would be happy to host additional U.S. forces. The threat from Russia against Europe remains acute, and this move would go a long way to assure allies and Putin that the United States is committed to NATO.
We have heard often that "America First" does not mean America alone. But if the United States behaves like a bully toward its allies, we may find ourselves feeling increasingly lonelier than we'd like. Trump has initiated a war that American and Israeli forces have executed with the help of allies -- privately -- to the benefit of the entire world. Allies will be needed in a much more public way to help win the peace.
Read in the National Review (https://www.nationalreview.com/magazine/2026/07/strengthen-nato-dont-wreck-it/?utm_source=PANTHEON_STRIPPED&utm_medium=PANTHEON_STRIPPED&utm_campaign=PANTHEON_STRIPPED&utm_content=PANTHEON_STRIPPED&utm_term=PANTHEON_STRIPPED&).
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At A Glance:
Rebeccah L. Heinrichs is a senior fellow and director of the Keystone Defense Initiative.
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Originala text here: https://www.hudson.org/security-alliances/strengthen-nato-dont-wreck-it-rebeccah-heinrichs
[Category: ThinkTank]
CSIS Issues Commentary: Why China Is Now a Peer Competitor to the United States in Cyberspace
WASHINGTON, May 16 -- The Center for Strategic and International Studies issued the following commentary on May 15, 2026, by Nikita Shah, senior fellow with the Intelligence, National Security, and Technology Program:* * *
Why China Is Now a Peer Competitor to the United States in Cyberspace
It is no longer enough to believe that the United States is unrivaled in cyberspace. At a time when Mythos-like capabilities are emerging, and when China has been especially brazen in its cyber operations against the United States, the United States cannot afford for China to accelerate its edge even further. ... Show Full Article WASHINGTON, May 16 -- The Center for Strategic and International Studies issued the following commentary on May 15, 2026, by Nikita Shah, senior fellow with the Intelligence, National Security, and Technology Program: * * * Why China Is Now a Peer Competitor to the United States in Cyberspace It is no longer enough to believe that the United States is unrivaled in cyberspace. At a time when Mythos-like capabilities are emerging, and when China has been especially brazen in its cyber operations against the United States, the United States cannot afford for China to accelerate its edge even further.Although economic prosperity may be President Donald Trump's primary national security goal, this should not come at the expense of U.S. superiority in national security arenas such as cyberspace. Cybersecurity is central to economic prosperity; a weak hand in cyberspace risks undercutting whichever economic gains result from President Trump's state visit to Beijing.
China has systematically evolved and matured its cyber capabilities over the last 15 years (if not longer), to such an extent that it sets it apart from other U.S. adversaries in cyberspace. Across the full levers of statecraft, whether intelligence, diplomacy, military, economic, or societal levers, China demonstrates an ability to mobilize a whole-of-society approach to dominating cyberspace. And in some specific areas, such as offensive cyber (OC) capabilities, China even outpaces the United States, making it no surprise that the Dutch Military Intelligence and Security Service recently labeled China as being "on an even footing" with the United States in OC. Seen through the "4S" framework--that is, China's sophistication, scale, stealth, and strategy--China should firmly be regarded as a peer competitor to the United States in cyberspace.
The "4S" Framework, Explained
This commentary sets out four components that offer a lens to understand China's rise in cyberspace--and where the United States risks losing its edge.
1. Sophistication
China has eclipsed other U.S. adversaries in cyberspace, seen through its approach to targeting, persistence, and technical capabilities. First, China has thoroughly and deeply penetrated U.S. critical infrastructure across sectors--whether energy, transport, or water--and at state and municipal levels. It has thoroughly compromised the U.S. public sector, including the U.S. Treasury, National Guard, and sensitive systems used by law enforcement for wiretapping.
The most egregious campaigns were by China's Salt Typhoon group, which demonstrated an intelligence penetration and persistence into U.S. telecommunications networks so thorough that two years on, the United States cannot confidently assert that the actors have been booted out. China's Volt Typhoon campaign--by military cyber actors--infiltrated U.S. military installations overseas in a highly strategic attack, showing an ability to sabotage U.S. military nodes and capabilities. In a contested domain, this reflects not only China's positioning of itself to "dominate the digital battle space," but to do so by reaching into the heart of the U.S. apparatus by targeting its most critical assets--and retaining the ability to disrupt these assets in the event of geopolitical conflict.
Salt Typhoon was most revealing as to how far China's technical capabilities have developed. The actors were able to sift through the mass volumes of data accessed in this attack down to a nuclear level to identify specific individuals (including then-candidates Donald Trump and JD Vance)--suggesting the pairing of collection capabilities with large language models to achieve highly advanced targeting. Moreover, suggestions that China may have developed its own version of Mythos Preview a few years ago--one that is more scalable and autonomous--is of even greater concern. It implies not only that China's AI tooling for finding technical vulnerabilities is more technically advanced than that of the United States, but years ahead, leaving the United States playing the wrong game.
2. Scale
The scale of China's talent pipeline is increasingly hard to ignore, and underlines China's whole-of-society approach to mobilizing in cyberspace. China has a rich history of cultivating hacking talent through capture the flag competitions, universities, and ranges that train its future hackers across offensive and defensive cyber skills, and cyber militia units. This is bolstered by China's network of research institutes that conduct technical research and development into cyber capabilities, and directly supply the Chinese state and its export of technology overseas. Together, these constitute a direct talent pipeline into China's state institutions, including the Ministry for State Security (MSS) and the People's Liberation Army (PLA)--at a scale that reaches into the hundreds of thousands.
This scale is only amplified by the role that China's private sector plays in this ecosystem, particularly in relation to hunting for 0-days (technical vulnerabilities that are critical access vectors to victims). Technical vulnerabilities are effectively a strategic resource and site of contestation between China and the United States in cyberspace; their value lies in the undetected access they provide to systems, making the speed of their discovery (and exploitation) critical to OC operations. China has successfully invested in transforming its OC supply chain over the past decade, both through cultivating a thriving--if chaotic--supply of private sector companies that hunt for vulnerabilities, and by implementing legislation that companies compels to feed vulnerabilities directly into the Chinese state apparatus once found. This use of multiple levers of statecraft to shape this industry lends the Chinese ecosystem a speed, scale, and agility that far out-rivals the United States' rigid OC supply chains, but also means that China's distributed ecosystem can reconstitute faster than the United States can disrupt it.
3. Stealth
Stealth has become an important component of China's approach in cyberspace--albeit contrasted with the brazenness that characterizes China's behavior. This stealth can be understood through a shift in tactics by China's cyber operators, including: increasingly targeting edge devices (e.g., routers, firewalls, and gateways) to gain access to victims; using "living-off-the-land" techniques (exploiting legitimate tools within victim systems); targeting cloud environments; and using covert networks at scale to disguise operational traffic. So widespread is China's use of covert networks that recently, a broad international coalition (including the United States and the United Kingdom) issued an advisory notice to industry, warning of the malicious practice.
Alone, this might not seem like such a significant factor. But what sets China apart is its scale; deployed by thousands of actors, these methods heavily undercut traditional network defense methods, making it far harder to identify and attribute China's cyber operations. Considered against China's appetite for global access to networks, this lack of visibility becomes especially troubling; it means that the United States and allies do not have a confident view of which of their systems China holds at risk.
4. Strategy
China's strategic approach has proved more enduring than its Western competitors. China has shown an astute ability to identify the systems that Western societies and economies depend upon, and vulnerabilities inherent in those systems--and to regear its entire cyber ecosystem to systemically exploit those weaknesses (especially in telecommunications), anchored in its Made in China 2025 plan.
China is not hiding its ambition, either. Under its 15th Five-Year Plan, China has underlined its goal to accelerate its development as a cyber superpower (alongside manufacturing, quality, aerospace, and transport). It considers its positioning in cyberspace integral to its national rejuvenation and strategic competition with the United States. Through its curation of state institutions, universities, research institutes, private industry, and legislation, China has demonstrated the ability to mobilize--and scale-a whole-of-society approach to dominating cyberspace. Its recent emphasis upon building "technical resilience" is also striking in recognizing a need to shore up its own defensive posture in cyberspace.
In other words, contrasted against the "strategic ambiguity" of the United States' approach to cyberspace, China has made its intent clear and developed the capabilities needed to execute upon that intent.
A Window for Reinvigorating U.S. Strategic Ambition in Cyberspace
China is not invincible, however. Its broader system shows signs of vulnerability (whether economic or political), and so it is important to caution against painting China as 10,000 feet tall. This offers an opportunity for a reinvigorated strategic approach by the United States to cyberspace.
The aftermath of President Trump's state visit to Beijing presents a useful window that his Administration can seize upon. A period of detente in U.S.-China relations should be accompanied by a strengthening of U.S. ambition, strategic intent, and posture in cyberspace. Where the recent U.S. National Cybersecurity Strategy 2026 was too light on the threat landscape and policy detail, the administration should publish a follow-up implementation plan as to how it will contest China and re-establish U.S. superiority in cyberspace. This should include the following:
* A clear vision as to how it will revitalize the U.S. cyber ecosystem (including institutions, policies, and capabilities) across the full levers of statecraft. This should include a commitment to reverse the cuts it has made since 2025 that have crippled the United States' premier cyber agencies, whether in terms of funding, personnel, or leadership.
* An annex that addresses China specifically, including cross-domain responses (i.e., noncyber) to malicious Chinese cyber activity.
* A reinvigorated approach to the U.S. partnerships, including with international partners, the private sector, civil society, and academia.
* A commitment to revitalize the U.S. cyber defenses and supply chains. Where the United States has retreated on regulating the private sector and is overly focused on private sector involvement in OC operations, the Trump administration should identify other levers to hold the private sector accountable for failing to implement basic cybersecurity measures.
In the longer-term, the Trump administration should consider an alternative--and enduring--strategic framework that sets up the United States to better compete against China in cyberspace. This should move away from the notion of "cyber deterrence", which has failed to achieve any commensurate or lasting shift in China's behavior in cyberspace. Instead, it should be anchored in regaining a strategic edge relative to China, playing to the United States' strengths, while doubling down on China's weaknesses. This starts with the Trump administration acting now to counter the gains China has made in cyberspace.
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Nikita Shah is a senior fellow with the Intelligence, National Security, and Technology program at the Center for Strategic and International Studies in Washington, D.C.
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Original text here: https://www.csis.org/analysis/why-china-now-peer-competitor-united-states-cyberspace
[Category: ThinkTank]
American Action Forum Issues Commentary: Tracker - The Federal Reserve's Balance Sheet Assets
WASHINGTON, May 16 -- The American Action Forum issued the following commentary on May 15, 2026, by Financial Services Policy Director Thomas Kingsley:* * *
Tracker: The Federal Reserve's Balance Sheet Assets
Introduction
This tracker follows the Federal Reserve's (Fed) total consolidated assets, held on its balance sheet, as the best indicator of the Fed's direct intervention in the economy.
Context
The Fed's dual mandate requires it to ensure both stable prices and maximum employment. The traditional tool the Fed uses to accomplish these goals is the adjustment of the federal funds rate, ... Show Full Article WASHINGTON, May 16 -- The American Action Forum issued the following commentary on May 15, 2026, by Financial Services Policy Director Thomas Kingsley: * * * Tracker: The Federal Reserve's Balance Sheet Assets Introduction This tracker follows the Federal Reserve's (Fed) total consolidated assets, held on its balance sheet, as the best indicator of the Fed's direct intervention in the economy. Context The Fed's dual mandate requires it to ensure both stable prices and maximum employment. The traditional tool the Fed uses to accomplish these goals is the adjustment of the federal funds rate,the short-term interest rate that determines how much it costs for banks to lend to each other overnight. The 2007-2008 financial crisis, however, demonstrated that even lowering the interest rate to zero was considered insufficient to shore up economies in freefall, and the Fed turned to more unusual tactics. One of these measures was what the Fed refers to as "large-scale asset purchases," which is more commonly known as "quantitative easing."
Under this process, the Fed enters the market to buy securities, typically mortgage-backed securities (MBS) and Treasuries, injecting both capital and liquidity into the market. This approach is not without risks - for the first time in its history, the Fed is regulator, supervisor, and now participant in the economy.
The development of quantitative easing as a go-to tool for the Fed in times of crisis has led to an unprecedented focus on one of its traditionally unremarkable aspects - the Fed total assets. Just as with any other firm, securities that the Fed purchases are considered assets and therefore are represented on the Fed's balance sheet.
This therefore is the most reflective guide of the state of quantitative easing and, by extension, the degree to which the Fed has deemed it necessary to intervene in the economy.
Each week, the Federal Reserve publishes its balance sheet, typically on Wednesday afternoon around 4:30 p.m.
As of May 13, the Fed's assets stand at $6.7 trillion, up nearly $19 billion from the prior week and up over $15 billion from a year ago.
Sources:
https://fred.stlouisfed.org/series/WALCL
https://fred.stlouisfed.org/series/TREAST
https://fred.stlouisfed.org/series/WSHOMCB
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Thomas Kingsley is the Director of Financial Services Policy at the American Action Forum.
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Original text here: https://www.americanactionforum.org/insight/tracker-the-federal-reserves-balance-sheet/
[Category: Think Tank]
America First Policy Institute Issues Commentary: America Needs a Comprehensive National Security Strategy for Artificial Intelligence
WASHINGTON, May 16 -- The America First Policy Institute issued the following commentary on May 15, 2026, by AI and Emerging Technology Director Yusuf Mahmood:* * *
America Needs a Comprehensive National Security Strategy for Artificial Intelligence
AI Dominance Means National Security
Recent developments in artificial intelligence (AI) leave little doubt: this is no ordinary consumer product. AI systems are now capable of enabling sophisticated cyber-attacks by uncovering thousands of software vulnerabilities in infrastructure thought to be secure. The latest AI systems are so capable of ... Show Full Article WASHINGTON, May 16 -- The America First Policy Institute issued the following commentary on May 15, 2026, by AI and Emerging Technology Director Yusuf Mahmood: * * * America Needs a Comprehensive National Security Strategy for Artificial Intelligence AI Dominance Means National Security Recent developments in artificial intelligence (AI) leave little doubt: this is no ordinary consumer product. AI systems are now capable of enabling sophisticated cyber-attacks by uncovering thousands of software vulnerabilities in infrastructure thought to be secure. The latest AI systems are so capable ofcyber offense that AI companies no longer give the public access to their best models.
These product releases are now national security events.
But it would be a mistake to solely fixate on AI's cyber capabilities. AI will transform the national security enterprise and will become increasingly critical for both scientific and weapons research and development (R&D). Drones and robotics will transform the battlefield. AI will accelerate biotechnology, including the synthesis of novel biological weapons no responsible state would pursue. On the current trajectory, we are not prepared to prevent these capabilities from proliferating to our adversaries, nor are we prepared to address the stark reality that these capabilities may threaten the homeland.
The Trump administration has taken bold actions to bolster American AI leadership, calling for AI dominance to be the north star of AI policy. President Trump defined it broadly:
"It is the policy of the United States to sustain and enhance America's global AI dominance in order to promote human flourishing, economic competitiveness, and national security."
However, recent AI capabilities demand a re-examination of the national security component of AI dominance. To truly dominate, America needs a national security strategy for AI. The US government (USG) must reject the "safetyism" and "doomerism" of previous approaches that would have overregulated AI, recognize the ways in which AI will determine the geopolitical future, and act to meet the challenge.
AI Will Fundamentally Transform National Security
In the process of crafting a National Security Strategy for AI, we must consider the fundamental factors driving AI's importance to the national security enterprise:
First, AI is rapidly developing national security-relevant capabilities on uncertain timelines. Today's AI systems are critical for military decision support and can autonomously discover and exploit cyber vulnerabilities. Tomorrow's systems will likely be far more capable, yet it is difficult to predict exactly when critical capabilities will be developed. AI will likely become capable of significantly accelerating weapons R&D with little to no human involvement, but we do not know whether this capability will be reached in one year or ten years. Similarly, AI will likely streamline the creation of novel bioweapons, but we do not know when the first AI-enabled pandemic will spread. This uncertainty extends beyond timelines. As increasingly capable AI agents are deployed into higher-stakes settings, the potential for large-scale malfunction grows in ways that are themselves difficult to predict.
The USG must prepare for these contingencies.
Second, there is no guarantee that America will continue to lead in AI innovation and adoption. Given AI's potential to rapidly shift the national security landscape, America must possess the best AI capabilities and the ability to deploy them across military and civilian sectors. However, dense regulations (such as energy-related permitting) and internal red tape (such as burdensome procurement policies) may squander our current lead.
Third, we cannot assume that defenders will keep pace with attackers. In certain domains, advanced AI capabilities may offer attackers a fundamental advantage over defenders. AI will likely accelerate the development of at least some such "offense-dominant" technologies, such as biological weapons in violation of the Biological Weapons Convention. It will likely be far costlier to defend against a lab-designed deadly virus than it will be to manufacture one.
Fourth, advanced AI capabilities tend to proliferate widely, including to hostile states, terrorists, and criminals. It takes an average of three months for open-weight AI systems to catch up to the capabilities of frontier AI systems. The proliferation and use of open-weight AI systems cannot be limited by either AI developers or the USG. This means that once powerful capabilities are discovered, defenders have only a brief window before a wide variety of malicious actors can easily obtain these capabilities. For some capabilities, threat actors may need little compute to threaten the American homeland.
Finally, American AI is not secure from theft and sabotage by adversaries. As AI becomes more critical for national security, foreign adversaries will be increasingly incentivized to steal and sabotage American AI technology. We are not prepared for such threats. No major AI company's security posture is sufficient to prevent the theft of its frontier AI model technology by sophisticated nation-state adversaries. Once AI technology is stolen, it is trivial for the attacker to fine-tune away any safeguards and immediately weaponize the AI's capabilities against the American people. Adversaries are also likely capable of sabotaging our most valuable AI systems by clandestinely inserting malicious, undetected behaviors into our most advanced AI.
Toward a National Security Strategy for AI
To address AI's transformational impacts on national security, America needs a national security strategy for AI. Such a strategy should address: (I) promoting situational awareness of AI in the USG; (II) ensuring American AI leadership; (III) denying our adversaries access to AI; and (IV) preventing AI-enabled emerging threats.
Pillar I: Situational awareness of AI in the national security enterprise
To better inform all future decisions about a technology as complex and high-stakes as AI, the USG needs deep expertise in the technology and an accurate sense of its trajectory. This must include:
* Achieving real-time awareness of AI's national security-relevant capabilities so that the USG can quickly take necessary actions before emerging threats can no longer be addressed;
* Bringing sufficient AI talent and expertise into the federal government to understand complex information about AI; and
* Assigning agency leads to conduct independent testing and evaluation of frontier AI.
Pillar II: Ensuring America leads in AI innovation and adoption
This administration has taken unprecedented and necessary steps to accelerate American AI. Yet, given AI's expanding importance to national security, further action is needed. A national security strategy for AI should have:
* A whole-of-government approach to accelerating AI adoption, including software and hardware;
* A robust domestic supply chain for physical actuators, like robotics and drones, lest we become dependent on our adversaries for the weapons of war; and
* Actions to maintain and widen our lead through AI infrastructure deregulation.
Pillar III: Denying our adversaries access to advanced AI
As advanced AIs become cyber weapons and engines of military R&D, we cannot afford to supply them or their ingredients to those who seek to harm Americans--whether sold willingly or stolen because of insufficient security. Denying access will require a strategy that:
* Secures the entire AI supply chain from theft, industrial espionage, and complex cyber operations;
* Strengthens export control rules and enforcement on physical chips, cloud computing resources, and semiconductor manufacturing equipment; and
* Develops a toolkit to track, assess, and potentially disable foreign projects that develop dangerous capabilities.
Pillar IV: Preparing for and preventing AI-enabled emerging threats
We must plan to become resilient to AI-enabled national security threats--both known and unknown. Doing so must include:
* Developing robust plans of action for responding to AI-enabled cyber crises;
* Analyzing and developing plans of action for AI-enabled bioweapons crises; and
* Requiring foreign adversaries to prove, using technical verification methods, that they are not using AI to threaten American lives.
AI is the newest frontier in national security. There is a narrow window for the federal government to shape AI for American dominance. Before us, the Cold War generation contained unfathomable risk through strategy and bold action. Our task is no smaller, though our window is smaller. Now is the time to act.
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Yusuf Mahmood, Director of AI and Emerging Technology
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Original text here: https://www.americafirstpolicy.com/issues/america-needs-a-comprehensive-national-security-strategy-for-artificial-intelligence
[Category: ThinkTank]
AFPI Continues to Stand for Virginians' Second Amendment Rights
WASHINGTON, May 16 -- The America First Policy Institute issued the following statement on May 15, 2026:* * *
AFPI Continues to Stand for Virginians' Second Amendment Rights
The America First Policy Institute (AFPI) has released the following statement from Knox Williams, AFPI Senior Fellow for American Justice, in response to a new Virginia anti-gun rights law that bans purchasing of AR-15s and standard capacity magazines, even by law-abiding citizens:
"Virginia has taken the draconian step of passing a law that bans ownership of the most common firearms in the country as well as the most ... Show Full Article WASHINGTON, May 16 -- The America First Policy Institute issued the following statement on May 15, 2026: * * * AFPI Continues to Stand for Virginians' Second Amendment Rights The America First Policy Institute (AFPI) has released the following statement from Knox Williams, AFPI Senior Fellow for American Justice, in response to a new Virginia anti-gun rights law that bans purchasing of AR-15s and standard capacity magazines, even by law-abiding citizens: "Virginia has taken the draconian step of passing a law that bans ownership of the most common firearms in the country as well as the mostcommon, standard capacity magazines owned by citizens," said Williams.
"While state officials fail to protect citizens from actual criminals, they pass a law that treats exercising Second Amendment rights like a criminal act.
This blatantly unconstitutional action highlights the fact that Virginia's anti-gun lawmakers will stop at nothing in their tyrannical quest to dismantle and ultimately eliminate the constitutional rights of Virginians."
The right of the people to keep and bear arms is a God-given right that is explicitly protected by our nation's most sacred document--the U.S. Constitution.
AFPI condemns any attempt by a governing body to infringe upon the inalienable and constitutionally protected rights of all law-abiding Americans.
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Original text here: https://www.americafirstpolicy.com/issues/afpi-continues-to-stand-for-virginians-second-amendment-rights
[Category: ThinkTank]