Global Intelligence Briefing

Global security threats are intensifying on multiple fronts. In Eastern Europe, Russia’s war in Ukraine continues unabated with extremely high casualties and signs of a grinding war of attrition. Russia has suffered staggering losses (over 434,000 casualties in 2024 alone, including ~150,000 killed) in exchange for slow advancesunderstandingwar.orgalmendron.com, while Ukraine faces dwindling ammunition and manpower as Western military aid slows amid political debatesalmendron.com. In the Middle East, Israel’s offensive against Hamas in Gaza decimated much of the group’s leadership but at a tremendous humanitarian cost – over 46,600 Palestinians killed according to local authoritiesreuters.com – fueling regional anger. Iran’s support for militant proxies (Hamas, Hezbollah) and repeated clashes along Israel’s northern border have raised the specter of a wider war that could engulf Lebanon or even Iranatlanticcouncil.orgunderstandingwar.org. Meanwhile, geopolitical rivalries are sharpening: China is increasingly assertive, staging record-scale military drills around Taiwanreuters.com and deepening strategic ties with Russia, including joint war games and technology cooperation aimed at countering U.S. influencevoanews.comvoanews.com. These conflicts and rivalries are reverberating through the global economy. Energy and food supplies remain vulnerable – analysts warn a major Middle East escalation could spike oil prices by 30%, reigniting inflationbrookings.edubrookings.edu – and China’s economic slowdown is dampening global growthbrookings.edu. Adversaries are also expanding the battlefield into cyberspace and advanced technology. Chinese state-backed hackers have infiltrated critical U.S. infrastructure (e.g. power grids and communications), likely pre-positioning for disruptive cyberattacks in a crisiswired.comwired.com. North Korean cyber actors stole over $1.3 billion in cryptocurrency in 2024 – nearly 60% of global crypto theft – to fund Pyongyang’s weapons programsthe-independent.com. Rapid advances in AI and quantum computing, including claimed breakthroughs in cracking encryptionthequantuminsider.comthequantuminsider.com, signal emerging threats to U.S. technological superiority. Finally, the homeland threat environment is elevated: polarization around the recent election and foreign disinformation are heightening domestic extremism risks, and physical attacks on critical infrastructure hit a record high last yeareenews.neteenews.net. The following intelligence updates outline these priority issues and potential actions to mitigate their impact on U.S. national security.

Priority Intelligence Reports

1. Russia-Ukraine War – Stalemate with Escalation Risks

Key Intelligence:

• After nearly two years of war, Russian forces are grinding forward in eastern Ukraine at immense cost. Ukraine’s military reports Russia suffered >434,000 casualties in 2024 (approximately 150,000 killed in action)understandingwar.org, bringing total Russian losses since 2022 to roughly half a millionalmendron.com.
• Western support is now in question. U.S. aid deliveries slowed in late 2024 amid political debates and delaysreuters.comalmendron.com. President-elect Trump has signaled an intent to broker a deal with Putinalmendron.com, and while his team pledged to continue some aid, it’s unclear if new packages will followalmendron.com. European allies cannot fully replace U.S. support – even with increased arms production – leaving Ukraine short on ammunition and trained troopsalmendron.com.
• Ukraine’s counteroffensives made only modest gains before stalling. By early 2025, Russia holds roughly 20% of Ukrainian territory and is pressuring the front lines in Donbas. Ukrainian forces are stretched thin (even conducting limited raids into Russia), yet Kyiv remains defiant and refuses to cede sovereigntyunderstandingwar.orgalmendron.com. Both sides appear exhausted, and combat is settling into a brutal winter stalemate.
• Putin continues nuclear saber-rattling (e.g. deploying tactical nukes to Belarus) to deter direct NATO intervention, although there are no signs of imminent Russian nuclear use. Moscow’s disinformation blames Ukraine for lack of peace talks, even as Putin himself shows no real interest in negotiations beyond imposing his termsunderstandingwar.orgalmendron.com.

Strategic Implications:

• High risk of protracted conflict: Without a dramatic shift, the war is poised to drag on into 2025 with continued high casualties. Russia’s strategy of attrition could eventually force Ukraine into a disadvantageous ceasefire if Western military aid wanes. Putin is likely calculating that waning public support in the U.S. and Europe will constrain aid, allowing Russia to “outlast” Ukrainealmendron.comalmendron.com. A frozen conflict would leave Russia illegally occupying a large swath of Ukraine – an outcome that would embolden Moscow and undermine the post–World War II norm against territorial aggression.
• NATO unity under strain: The prospect of the U.S. reducing support has alarmed European allies. NATO countries may face domestic pressure to seek a diplomatic end to the war if they believe U.S. commitment is faltering. Any fractures in Western unity could be exploited by Russia. Conversely, if the U.S. reaffirms support, Russia might escalate asymmetrically (cyber attacks, energy coercion) to fracture the coalition.
• Global economic and security ripple effects: The war’s continuation keeps upward pressure on global energy and food prices and diverts Russian attention and resources from other theaters. However, a perceived Russian victory would have far-reaching consequences – potentially validating violent revisionism (e.g. China vis-à-vis Taiwan) and prompting U.S. adversaries to challenge the international order more boldly. Ukraine’s fight has already significantly degraded Russia’s military, which in the long term could reduce Moscow’s ability to menace NATO or project power elsewherealmendron.comalmendron.com. But in the near term, Putin’s military remains dangerous, and an emboldened Russia might intensify hybrid warfare (cyber, disinformation, proxy conflicts) against Western interests.
• Humanitarian and WMD concerns: A drawn-out war means a growing humanitarian crisis – millions of refugees and internally displaced, and Ukraine’s infrastructure in ruins. The risk of Russia using a chemical weapon or causing an accident at the Zaporizhzhia nuclear plant cannot be ruled out if Putin grows desperate. Additionally, Ukraine’s potential moves (such as strikes on Russian territory or deep into Crimea) carry escalation risks that could draw a harsher Kremlin response.

Recommended Action:

• Sustain & Shape Aid: Work with Congress to secure continued military aid to Ukraine at sustainable levels, while pressing European allies to increase their contributions. Emphasize providing air defenses, artillery ammunition, and maintenance for donated systems to prevent front-line collapse. Concurrently, quietly plan for contingencies if aid is curtailed – such as helping Ukraine shift to a more defensive posture that can hold lines with less support.
• Diplomatic Track: Coordinate closely with European partners to present a unified position to Russia regarding negotiations. Support exploratory talks (possibly via Turkey or the UN) to probe Putin’s demands, but maintain clear red-lines (no legitimation of Russia’s annexations). Make it clear to Moscow that partial sanctions relief could accompany a verifiable withdrawal or ceasefire – but also signal that continued aggression will result in tighter sanctions and long-term isolation.
• Deterrence & Containment: Posture U.S. and NATO forces to deter any Russian escalation beyond Ukraine. Continue the rotation of U.S. troops to NATO’s eastern flank and consider additional deployments of air and missile defenses to frontline Allies. Enhance intelligence sharing with Ukraine regarding any signs of WMD preparation. Reinforce public messaging that any nuclear use by Russia would be met with “catastrophic” (albeit non-nuclear) consequences, to sustain nuclear deterrence.
• Economic & Energy Mitigation: Prepare for global economic impacts. Encourage Allies to maintain sanctions pressure on Russia’s energy exports (while avoiding supply shocks). Work with G7 and OPEC+ to manage oil supply if needed to stabilize prices. Also, lead efforts to support countries hardest hit by grain shortages through alternate export routes and financing.
• Long-Term Planning: Begin formulating a post-conflict strategy: whether the war ends via diplomacy or protraction, Ukraine will need a robust reconstruction and security commitment (potentially akin to an “Israel model” of long-term aid if NATO membership is not immediate). Simultaneously, plan for managing a possibly more belligerent, sanctioned Russian state in the coming years – including reinforcing resilience against Russian cyber and influence operations targeting Western democracies.

2. Middle East – Gaza War Aftermath Fuels Regional Volatility

Key Intelligence:

• Gaza conflict outcome: After a devastating months-long campaign, Israel has severely weakened Hamas in the Gaza Strip. Israeli forces killed many senior Hamas leaders and destroyed extensive militant infrastructure. However, the human toll and destruction are immense – over 46,600 Palestinians killed since Oct 2023, per Gaza health authoritiesreuters.com, exceeding the combined death toll of all previous Gaza wars by a factor of tenreuters.com. Vast swathes of Gaza City lie in ruins, and over 1.5 million people (more than half of Gaza’s population) are displaced amid a dire humanitarian crisis.
• Iran and proxies’ engagement: The war nearly escalated beyond Gaza. Iran’s Islamic Revolutionary Guard Corps reportedly supported Hamas’ October 7 attack with training and was prepared to intervene if Israel pushed into Lebanonatlanticcouncil.org. In early October, Iran even launched ballistic missiles toward Israel (intercepted en route) prompting limited Israeli strikes on Iranian military targets in Syriaatlanticcouncil.org. Hezbollah, Iran’s Lebanese proxy, exchanged daily fire with Israel across the northern border; Israel carried out airstrikes that killed several Hezbollah commanders. At one point in late 2024, Hezbollah was firing dozens of rockets and drones per day, and Israel warned it might conduct a ground incursion into south Lebanoncsis.orgatlanticcouncil.org. While an all-out Israel–Hezbollah war was averted, both sides suffered casualties, and Hezbollah’s leadership remains intact (its leader Hassan Nasrallah survived and continues threatening attacks).
• Ceasefire and diplomatic moves: Intense U.S. diplomacy helped arrange multiple short humanitarian pauses in Gaza to facilitate aid deliveries and hostage releases. These pauses eventually led to an uneasy ceasefire by early 2025, though it is punctuated by sporadic clashes. Egypt and Qatar brokered talks between Israel and Hamas (via mediators) resulting in the exchange of dozens of hostages for Palestinian prisoners. The Palestinian Authority is in discussions with regional and international partners about resuming administrative control in Gaza, but its capacity and Hamas’s remnants pose challenges.
• Wider regional shifts: The conflict strained the Abraham Accords and nascent Israel–Arab ties. Saudi Arabia froze normalization talks with Israel when the Gaza war began. Large protests erupted across the Arab world and in Western cities, fueled by anger over civilian casualties. Iran capitalized on this, coordinating with allies (“Axis of Resistance”) to pressure U.S. interests – over 50 drone and rocket attacks were launched at U.S. bases in Iraq and Syria by Iran-backed militias in late 2024, injuring several Americansusip.org. The U.S. military responded with limited strikes on Iran-aligned militia targets. Meanwhile, in Yemen, the Iran-backed Houthis fired drones and missiles toward Israel (one intercepted by a U.S. Navy ship in the Red Seabrookings.edu). These incidents briefly disrupted shipping through the Suez Canal and Red Sea, a vital global trade routebrookings.edu.

Strategic Implications:

• Risk of broader war persists: The Gaza ceasefire is fragile. A breakdown – for instance, a major Hamas attack or an Israeli resumption of full-scale operations – could quickly reignite fighting. Any renewed conflict raises the risk of Hezbollah entering the fray from Lebanon, which in turn could draw in Iran directly. A multi-front Israel–Iran proxy war would threaten regional stability and U.S. forces. Notably, Iran’s Supreme Leader has signaled enduring support for Hezbollah and even promised to help it rebuild and re-arm after the recent clashesunderstandingwar.orgunderstandingwar.org. Tehran might calculate that opening a northern front could bog Israel down, but it also knows a wider war could invite massive Israeli and U.S. retaliation. This deterrence dynamic kept conflict limited so far, but miscalculation remains possible.
• U.S. regional interests at stake: The United States has ~2,500 troops in Iraq and ~900 in Syria who are vulnerable to militia attacks. A wider Mideast war could endanger these personnel and potentially disrupt critical oil production or shipping (if Iran sought to close the Strait of Hormuz, for example). It would also likely trigger a surge in global oil prices – a World Bank analysis warns a severe regional war could push oil above $120/barrel, undermining the global economybrookings.edubrookings.edu. Furthermore, prolonged violence harms U.S. strategic relationships: Arab partners (like Jordan, Egypt, Gulf states) face internal pressure due to the humanitarian fallout, which could erode cooperation with the U.S. on other fronts (counterterrorism, Iranian containment).
• Terrorism and radicalization: The images of destruction in Gaza and perceptions of Western indifference have become rallying cries for extremist groups. ISIS and al-Qa’ida are attempting to exploit the situation for recruitment, calling for attacks on Israeli and Western targets. Even lone actors in the West could be inspired to violence. The homeland threat from Islamist terrorism could tick upward after years of relative lull. At the same time, Israeli security is strained, having to police both Gaza and heightened tensions in the West Bank, where clashes with settlers and Palestinian militants have escalated. A weakened Hamas could lead to an Al-Qa’ida or ISIS offshoot attempting to fill the vacuum in Gaza, or Iranian proxies entrenching further – either outcome would complicate long-term stability.
• Geopolitical realignment: U.S. credibility as a mediator is being tested. Washington’s staunch support for Israel, while morally firm, has drawn criticism from some allies and could drive wedge between the U.S. and Global South countries that are sympathetic to the Palestinians. Conversely, Russia and China have positioned themselves as champions of Palestinian and Arab causes in international forums, which might earn them influence at U.S. expense. If the U.S. cannot help deliver a durable peace or reconstruction aid for Gaza, rivals might step in to fill that role, leveraging it for diplomatic capital. On the other hand, effective U.S. diplomacy that prevents wider war and addresses humanitarian needs could bolster U.S. standing.

Recommended Action:

• Prevent Wider Escalation: Continue intensive diplomatic engagement with all regional actors to keep the Gaza ceasefire in place. Use high-level channels with Israel to restrain any major offensive moves and insist on coordination before Israel responds to provocations (to avoid inadvertent Hezbollah escalation). Simultaneously, message Iran (via Qatar, Oman, or European intermediaries) that the U.S. seeks to avoid war but will respond decisively if Iran or its proxies expand the conflict. Maintain the enhanced U.S. military presence (carrier strike groups, air defense units) in the region as a deterrent signalatlanticcouncil.org, and consider additional Patriot or THAAD deployments to protect U.S. bases in Iraq/Syria.
• Support Israel and Civilian Protection: Privately encourage Israel to transition from large-scale operations to more targeted counterterrorism against remaining Hamas elements, to minimize civilian harm. Offer U.S. intelligence and specialized capabilities (e.g. tunnel detection tech, precision munitions) to help neutralize threats with less collateral damage. At the same time, push Israel to allow significantly more humanitarian aid and services into Gaza during the ceasefire – emphasizing that alleviating Gazans’ suffering now will reduce international backlash and long-term radicalization.
• Humanitarian & Reconstruction Initiative: Lead a coalition (including EU, Gulf states, and international organizations) to mount a “Marshall Plan for Gaza” once a more stable truce holds. This should include funding for rebuilding infrastructure, ensuring water/electricity, and supporting the Palestinian Authority’s return to governance in Gaza. Visible U.S. contribution to Gaza’s recovery can mitigate anger on the Arab street and deprive Iran or extremist groups of a propaganda talking point. Coordinate closely with Egypt and the UN on border crossings and reconstruction oversight to prevent aid diversion to Hamas.
• Regional Diplomacy: Re-engage Saudi-Israel normalization discussions at an appropriate time, linking progress to concrete improvements in the Palestinian situation. Quietly encourage interim confidence-building steps (e.g. Saudi humanitarian aid to Gaza, Israeli limits on West Bank settlements) that could revive a pathway to broader peace talks. Simultaneously, reinforce partnerships with Jordan and Egypt – possibly through additional economic aid or security cooperation – as they bear the brunt of regional instability (refugees, militant spillover).
• Counterterrorism Vigilance: Alert U.S. intelligence and law enforcement to the heightened terrorism recruitment environment. Intensify monitoring of online extremist activity and enhance information-sharing with allies on any Gaza-related terror plots. Update force protection postures at U.S. embassies and military facilities in the Middle East. Domestically, engage community leaders to preempt any hate crimes or retaliatory violence between communities.
• Leverage International Forums: Use the upcoming UN sessions and other multilateral forums to advocate for a two-state solution framework and the protection of civilians. Rally allies to jointly condemn acts that threaten regional peace (whether Hamas terror or excessive use of force against civilians). An international peacekeeping or monitoring mechanism in Gaza or southern Lebanon could be explored to help maintain calm – begin consultations on what such a force might require (mandate, contributors, etc.) should a window for deploying it open.

3. Global Economic & Financial Stability – At Risk from Conflict and Competition

Key Intelligence:

• War-driven commodity volatility: Ongoing wars in Ukraine and the Middle East are roiling key commodity markets. Ukraine – a major grain exporter – has seen its harvests and Black Sea exports disrupted, contributing to elevated global food prices. In energy markets, fears that the Israel-Hamas war could widen have already caused price spikes. Analysts warn a significant Middle East escalation (for example, conflict involving Iran in the Gulf) could send oil prices 30% above current forecastsbrookings.edubrookings.edu. Notably, late 2024 attacks by Yemen’s Houthi rebels in the Red Sea briefly disrupted shipping through the Suez Canal (which carries ~30% of global container traffic)brookings.edu, illustrating how regional instability can choke key trade arteries. Thus far, Europe has managed to secure alternative gas supplies after Russia’s cutoff, but a colder winter or renewed conflict could strain energy security again.
• Great-power economic rifts: U.S.-China strategic competition is increasingly spilling into the economic realm. The U.S. expanded export controls on semiconductor and AI-related technology to Chinavoanews.comvoanews.com, and tightened sanctions on Chinese companies tied to human rights abuses or support to Russia. Beijing has retaliated with its own restrictions (e.g. limits on exports of rare earth metals essential to electronics). The result is a partial decoupling of the world’s two largest economies in critical sectors. Multinational firms are re-evaluating supply chains, leading to investment shifts (the “friend-shoring” trend). Meanwhile, Russia’s economy, though hit by sanctions, has shown resilience aided by high oil revenues and deepening trade with China and othersvoanews.comvoanews.com. However, Russia is depleting reserve funds and turning to currency controls as sanctions tighten.
• China’s slowdown: China’s economic engine is losing steam, which has global repercussions. China’s GDP growth for 2024 is estimated around 4.5%, the slowest in decades (outside COVID)brookings.edu. A persistent property sector crisis (major developers defaulting and home sales plummetingbrookings.edu) and high youth unemployment are dragging on growth. This matters globally: China accounts for ~20% of developing countries’ exportsbrookings.edu, and it’s a top consumer of commodities. A sharper-than-expected Chinese downturn could knock 0.2–0.3 percentage points off global growthbrookings.edu and hit commodity exporters hard. Already, weaker Chinese demand is softening oil and metal prices, offering mixed effects (good for inflation, bad for exporters).
• Financial system stressors: The rapid rise in interest rates worldwide (as central banks fought inflation) is exposing vulnerabilities. Thus far, a broad financial crisis has been averted, but cracks are evident: several mid-sized banks in the U.S. and Europe required rescues in 2023. Global debt is at record highs (public and private), and higher debt-service costs are straining developing nations – over 50 countries are at risk of debt distress. In 2024, at least five emerging economies (e.g. Pakistan, Argentina, Ghana) have sought IMF help or restructuring. Additionally, there is heightened risk of market volatility around political events (such as a potential showdown over the U.S. debt ceiling or shifts in government in major economies).
• Economic warfare and fragmentation: Geopolitical blocs are using economic tools more aggressively. The West’s price cap on Russian oil has somewhat curbed Moscow’s revenue, while Russia tries to circumvent it via shadow fleets and currency swaps. In turn, Russia temporarily halted gas exports to some EU states in retaliation for sanctions. The U.S. Treasury is weighing secondary sanctions to enforce Russian oil caps more strictly. Outside of the Russia context, sanctions are being considered or applied against Iran (over its nuclear advances and support for militias) and against individuals in Sudan, Myanmar, etc., as conflict responses. On the flip side, forums like BRICS are expanding: BRICS welcomed six new members (including Saudi Arabia and Iran) as of January 2024, bringing its share of global GDP to over 25%cfr.org. The bloc aims to boost trade in local currencies to reduce reliance on the U.S. dollarcfr.org. While a BRICS common currency remains a distant concept, these efforts reflect a gradual fragmentation of the global financial system into Western-led and alternative spheres.

Strategic Implications:

• Recession and inflation risks: The confluence of wars and great-power rivalry raises the risk of a global recession. A severe oil price shock (from war expansion or a strategic blockage like Hormuz) could spike inflation just as it was being tamed, forcing central banks to hike rates further and choke growth. In contrast, a abrupt peace in Ukraine that eases commodity pressures could bolster growth but might also lead to complacency in confronting aggressors. The U.S. economy has been resilient, but continued high interest rates and slowing exports (due to weak foreign demand) could eventually tip the U.S. into a mild recession in 2025. Policymakers must navigate between fighting inflation and sustaining growth amidst very uncertain geopolitics.
• Allied economic strain: Key U.S. allies in Europe are bearing energy and refugee costs from the Ukraine war, and some in Asia (like Japan, South Korea) are exposed to a China slowdown. Their economic strain can translate into less bandwidth for joint security initiatives or foreign aid. For instance, European NATO members facing possible recession might push Ukraine toward concessions to reduce economic stress. Similarly, if China’s slump deepens, Beijing might become more diplomatically belligerent to divert domestic attention, affecting regional security. The U.S. needs to be prepared to assist allies economically (through currency swap lines, energy supplies, etc.) to maintain a united front on security issues.
• Dollar dominance questions: The increased talk of non-dollar trade (by BRICS, China’s yuan oil deals, etc.) is unlikely to unseat the dollar in the near term – the dollar still accounts for ~58% of global reserves. However, over time, if such efforts gain traction, the U.S. could see reduced “financial superpower” capacity (e.g. sanctions would be less effective, borrowing costs could rise if dollar demand falls). In the short run, U.S. sanctions and export controls might accelerate some countries’ moves to develop alternative financial systems. This creates a balancing act: how to wield economic tools against adversaries without undermining long-term U.S. economic leverage.
• Trade realignment costs: The push to secure supply chains (semiconductors, critical minerals) and diversify away from China (and Russia) carries transitional costs. In the interim, businesses face higher costs to relocate production, which can contribute to inflation. There’s also a risk of overcorrection – severing trade ties beyond what’s necessary could hamper innovation and growth. Conversely, failure to secure critical supply chains could leave the U.S. vulnerable in a crisis (e.g. dependence on Taiwan for advanced chips amid Taiwan Strait tensions). Striking the right balance in economic decoupling is a strategic imperative.

Recommended Action:

• Energy Security Measures: Proactively work with energy-producing allies (Saudi Arabia, UAE, etc.) to quietly plan increased output if a Middle East crisis disrupts supply. Be ready to coordinate an IEA strategic petroleum release to blunt any oil price spike. Domestically, prepare to temporarily relax certain energy export restrictions or fuel standards to boost supply if needed. Simultaneously, redouble efforts on energy transition – the more the U.S. and allies invest in renewables and efficiency, the less leverage oil exporters or transit chokepoints will have in the future.
• China Economic Contingency Planning: Assemble an interagency group to monitor China’s economy and possible spillovers. Develop contingency options if China’s downturn sharply worsens – e.g. targeted support for U.S. industries heavily reliant on China’s market (like agriculture, autos) or multilateral support via IMF/World Bank to vulnerable countries hit by reduced Chinese investment. Also, continue engaging China in forums like APEC, G20 on economic cooperation to manage competition responsibly; keep channels open to coordinate on global financial stability (as was done in 2008) despite strategic frictions.
• Protect Supply Chains: Accelerate initiatives like the CHIPS Act and Inflation Reduction Act implementation to build domestic capacity in semiconductors, EV batteries, and pharmaceuticals. Work with allies through frameworks like the Indo-Pacific Economic Framework (IPEF) and EU-U.S. Trade and Technology Council to create collective resilience – e.g. a coordinated approach to stockpiling critical minerals and a shared early warning system for supply disruptions. Moreover, consider establishing “safe lanes” agreements – where like-minded nations agree not to restrict exports of critical supplies to each other in times of crisis.
• Financial Vigilance: Direct the Treasury and Federal Reserve to intensify monitoring of global financial stress indicators – swap spreads, credit default swaps for key countries, etc. Be prepared to use financial tools to stabilize markets (for instance, re-opening Fed dollar swap lines for certain central banks if dollar funding tightens). Domestically, ensure bank supervision remains rigorous regarding interest-rate risk and capital adequacy, so that any future rate hikes don’t trigger bank failures. Also, work with Congress on prudent fiscal policy to avoid self-inflicted wounds (like a debt ceiling standoff) that could spook markets in this fragile environment.
• Economic Diplomacy: Increase engagement with the Global South on economic issues to counter narratives of Western neglect. This could include expanding development financing (through the World Bank/IMF reform agenda) and supporting debt relief initiatives for countries facing insolvency, thereby undercutting China’s influence as a lender. With respect to sanctions, continue multilateral coordination to tighten enforcement (especially on Russian oil price caps and Iranian sanctions) but calibrate their use to avoid alienating pivotal partners – for example, give India and others some leeway in reducing Russian energy imports gradually to keep them onside.
• Coordinate with Allies on Economic Statecraft: Align with G7 and others on outbound investment screening for critical technologies to prevent adversaries from capitalizing on Western capital. Present a united front on export controls so firms cannot easily shop for loopholes between jurisdictions. At the same time, discuss common approaches to address China’s non-market practices (IP theft, subsidies) – perhaps via a joint trade enforcement task force – to reduce the burden on any single country and avoid China exploiting divides. Ultimately, maintain open communication with markets and the public: clearly articulate the rationale for these economic security measures to sustain confidence and preempt misinformation that adversaries may spread about their impact.

4. Technological & Cyber Threats – Adversaries Expand High-Tech Warfare

Key Intelligence:

• State-sponsored cyber intrusions: U.S. infrastructure is under constant cyber assault by nation-state actors. A Chinese state-backed hacker group dubbed “Volt Typhoon” penetrated networks controlling critical infrastructure in U.S. states and the Pacific territory of Guamwired.com. According to Microsoft and intelligence partners, this group has been active since 2021, breaching power grids, communications, and other systems – likely for espionage and to position itself to disrupt U.S. military logistics in a future Taiwan conflictwired.comwired.com. The hackers have avoided detection by blending in with routine network activity, and they have not yet triggered destructive attacks, indicating a patient approach. Separately, Russian hacking units continue to carry out aggressive cyber operations: in the past year, Russian cyberattacks hit Ukrainian critical systems (telecom, power) as part of the war, and Moscow’s hackers probed NATO countries’ networks (including a notable breach of a European government satellite communications system, according to officials). Iran and North Korea are also active – Iran has launched cyberattacks on Israeli water facilities and Albanian government networks (as retaliation for sheltering an Iranian dissident group), while North Korean hackers have stolen an estimated $1.3+ billion in cryptocurrency in 2024, accounting for 60% of global crypto hacks that yearthe-independent.com. Pyongyang uses these illicit funds to blunt the impact of sanctions and fund its missile and nuclear programsgjia.georgetown.edu.
• AI and autonomous weapons race: The Pentagon assesses that both China and Russia are aggressively pursuing military applications of Artificial Intelligence. Russia, facing tech sanctions, has turned to China for help on AI developmentvoanews.comvoanews.com. In late 2024, Putin ordered Russia’s largest bank (Sberbank) to collaborate with Chinese tech firms on AI, aiming to improve everything from battlefield decision-making to drone swarmingvoanews.comvoanews.com. There are reports that Russia has begun deploying AI-enhanced drones in Ukraine that can autonomously identify targets and evade jammingvoanews.com. China, for its part, is integrating AI into surveillance, missile targeting, and electronic warfare systems. Beijing showcased drone prototypes with a high degree of autonomy and is experimenting with AI-assisted wargaming to refine its Taiwan invasion plans, according to defense analysts. Worryingly, both nations are bypassing discussions on norms for military AI use – raising the risk of unstable outcomes (e.g. an unchecked autonomous weapon causing unintended escalation). On the flip side, non-state actors are also leveraging AI (generative AI tools to create deepfake propaganda, or AI-driven cyber tools to enhance phishing and hacking).
• Quantum computing and encryption threat: In October 2024, Chinese scientists claimed a milestone in quantum computing that set off alarms in the cybersecurity community. Using a D-Wave quantum annealer, a research team in China executed what they called the first quantum attack on common encryption algorithmsthequantuminsider.comthequantuminsider.com. They reportedly cracked certain substitution-permutation ciphers (smaller analogs of the AES-256 encryption used in military communications)thequantuminsider.com. While Western experts note that modern encryption remains safe for now, since the Chinese demonstration did not actually break AES or RSA and was constrained by hardware limitsthequantuminsider.comthequantuminsider.com, it nonetheless shows rapid progress. The NSA warns that within a few years, quantum advancements could render today’s public-key encryption (like RSA/ECC) obsolete – jeopardizing everything from military communications to financial transactions – unless systems transition to post-quantum cryptography. Both China and the U.S. are in a race to achieve quantum breakthroughs; whoever wins could potentially decrypt the other’s secret data (including historically intercepted communications).
• Space and electromagnetic threats: Adversaries are targeting space-based assets and exploring new tech frontiers. Russia tested several anti-satellite (ASAT) weapons over the past years (including a 2021 test that created thousands of debris pieces). China is deploying “space stalker” satellites that can maneuver close to others; the U.S. has observed suspicious Chinese satellites practicing grappling maneuvers that could be used to disable U.S. satellites in a conflict. Both nations are also developing directed-energy weapons (like lasers) that could blind or damage satellites. On the electromagnetic spectrum, Chinese military writings discuss using high-altitude EMP (electromagnetic pulse) weapons to knock out adversary electronics early in a war. While there’s no evidence of deployment, it underscores the breadth of tech threats under consideration.

Strategic Implications:

• Critical infrastructure at risk: Pervasive cyber intrusions mean that in a crisis – say, a U.S.-China confrontation over Taiwan – the homeland could come under disruptive cyberattack. The fact that Chinese hackers penetrated systems as sensitive as power grids and telecom suggests they could potentially cause blackouts or communications outages on U.S. soil at a chosen timewired.comwired.com. Similarly, Russian actors might try to disrupt pipelines or the financial system as retaliation for U.S. support to Ukraine. This blurs the line between “over there” and “over here” in national security, as civilian infrastructure becomes a frontline. It also raises complex questions of proportional response and escalation control in cyberspace, since attribution can be murky and cyber effects can spill over borders.
• Technology superiority erosion: The U.S. has long relied on a tech edge in military affairs, but that edge is shrinking. If China and Russia field advanced AI-driven or hypersonic weapons faster, U.S. forces could be put at a disadvantage in certain scenarios (e.g. swarms of autonomous drones overwhelming a carrier group’s defenses). Additionally, adversaries’ progress in quantum computing could eventually negate U.S. intelligence advantages derived from signals intercepts. The U.S. must prepare for a future where secure communications are harder and where our own use of AI in weapons is mirrored by capable adversaries, potentially neutralizing some of our strengths. There is also a destabilizing effect: when all sides employ AI in early-warning or command systems, the speed of conflicts could accelerate beyond human control, raising accident risks.
• Threats to command and control: Cyber and space attacks threaten the U.S. military’s C4ISR (Command, Control, Communications, Computers, Intelligence, Surveillance, Reconnaissance) backbone. An ASAT strike could cripple GPS or reconnaissance satellites, blinding precision weapons or troops in the field. Cyberattacks could knock out the logistics software that the DoD uses to move forces. A successful high-altitude EMP detonation could fry electronics across a wide area, paralyzing military response. Such scenarios, while extreme, could undermine confidence in deterrence if adversaries believe they can disable U.S. capabilities long enough to achieve a quick victory (for example, China might think it can delay U.S. intervention in Taiwan by cyber/space strikes). This places urgency on hardening systems and building redundancies (like backup communication modes, inertial navigation in case GPS is lost, etc.).
• Proliferation to rogue actors: Cutting-edge tech often trickles down. Today’s elite cyber tools might be tomorrow’s off-the-shelf hacker kit. North Korea already shows that even a smaller nation can inflict global-scale cyber theft for profit. Non-state groups could potentially acquire malware developed by Russia or China (through black markets or leaks) and repurpose it. In the future, terrorist groups might exploit AI tools to organize or carry out attacks (for instance, using drones to target critical sites autonomously). The democratization of powerful tech means the U.S. faces a more crowded threat landscape, not just from traditional states but tech-empowered criminals and extremists. International norms and controls are struggling to keep pace – there is no equivalent of an arms control treaty for code or algorithms.

Recommended Action:

• Cyber Defense Surge: Instruct DHS and NSA to lead a 90-day “surge” on cybersecurity for critical infrastructure. This would include intensive network scanning and patching campaigns with utility and telecom companies in regions like Guam, Hawaii, and the U.S. West Coast that could be first targets in a Pacific conflict. Work with industry to deploy advanced threat-hunting teams to sniff out any persistent Chinese or Russian intrusions and quietly neutralize them. Accelerate implementation of Executive Order 14028 (Improving the Nation’s Cybersecurity) mandates, especially adoption of zero-trust architectures in federal networks. Expand information-sharing with private sector operators through the Joint Cyber Defense Collaborative.
• Offensive Cyber Posture & Deterrence: Without divulging capabilities, communicate (through backchannels to Beijing and Moscow) that the U.S. has the means to retaliate in kind to cyber attacks – e.g. the ability to disable critical Chinese or Russian infrastructure systems. At the same time, clarify red lines: for instance, signal that any cyberattack causing loss of American life or crippling vital systems would be treated equivalently to a conventional attack, potentially warranting a kinetic response. Strengthen international cyber norms by rallying allies to attribute and condemn major state-sponsored cyber incidents publicly, as was done after Russia’s NotPetya attack.
• Accelerate Tech Innovation: Invest heavily in emerging tech R&D to maintain the edge. Work with Congress to secure funding for the DoD’s Joint All-Domain Command & Control (JADC2) and AI initiatives. Expedite fielding of trusted AI tools for intelligence analysis, drone swarms for our own use, and active defenses against drone attacks. Prioritize projects under the new DOD AI and autonomy strategy to counter swarming and improve targeting. Also, fast-track quantum-resistant encryption deployment across U.S. government communications – NIST has selected new algorithms; agencies need to implement them urgently given the lead time needed before quantum threats materialize.
• Allied Tech Collaboration: Deepen tech-sharing partnerships with allies. For example, through AUKUS, expand cooperation on cyber defense and AI (not just submarines). With NATO, establish a joint center of excellence on AI in warfare and share best practices on human control and ethical use to maintain a moral high ground. Coordinate with allies on restricting exports of critical tech to adversaries (to slow their advances) and on talent acquisition (perhaps a “Tech NATO” scholarship to draw global STEM talent to work on defensive technologies in democratic countries).
• Resilience and Continuity: Direct the Pentagon to refine continuity-of-operations plans for fighting in a degraded tech environment. Ensure military units train in GPS-denied, comms-denied scenarios. Stockpile key components (like satellite spare parts, hardened radios) and consider deploying some fraction of forces with analog backups (for example, reintroducing celestial navigation training for Navy officers). Expand EMP hardening of critical C2 facilities and explore installation of surge protectors/Faraday cages in key nodes of the civilian grid.
• International Norms and Arms Control Efforts: Even as we compete, push for dialogues on tech norms – re-engage China and Russia in discussions on avoiding interference with each other’s critical infrastructure via cyber (a cyber “rules of the road”) and on preventing incidents in space (revisiting debris-creating ASAT test moratoria, for instance). Promote an initiative on military AI ethics (building on the U.S.-EU joint statement) to preempt the most dangerous uses, like autonomous nuclear launch decisions. While verifiable treaties might be distant, even informal understandings or transparency measures could reduce risk of miscalculation. Continue to support and shape global efforts on cybersecurity (such as UN GGE and OEWG processes) to advocate for norms against targeting civilian infrastructure. Additionally, incentivize secure tech development: for example, work on an international agreement for quantum encryption standards, so that when quantum computers arrive, even rivals have some interest in maintaining secure financial transactions and communications rather than complete chaos.

5. U.S. Domestic Security – Heightened Extremism and Infrastructure Threats

Key Intelligence:

• Election-linked extremism: The recent 2024 U.S. election cycle has acted as a catalyst for domestic extremist mobilization. According to DHS, the terrorism threat on U.S. soil remains “high” heading into 2025, fueled by a volatile mix of domestic grievances and global eventsdhs.gov. Both far-right and far-left violent actors showed increased chatter online about the election outcome. FBI and DHS tracking indicate that some domestic violent extremists (DVEs) were emboldened by unfounded claims of election fraud and are discussing targeting government officials and public institutions. Thus far there have been scattered incidents (e.g. an armed protester arrested near a state capitol), but no large-scale violence – however, authorities assess the risk of lone-wolf attacks (such as an anti-government militia sympathizer attacking a federal building or an election office) will persist into the inauguration period.
• Foreign influence and disinformation: U.S. agencies have detected active influence operations by Russia, China, and Iran trying to exploit domestic divisions. These actors used fake online personas and propaganda to amplify polarizing narratives around the election, vaccination policies, and recent Middle East conflictsdhs.gov. For instance, Russia’s troll farms pushed narratives of election fraud and civil unrest, aiming to undermine confidence in democratic institutions. China’s information operations have targeted specific diaspora communities and even U.S. local officials who criticize Beijing, in some cases engaging in transnational repression – e.g. attempting to intimidate Chinese-American dissidents on U.S. soildhs.gov. Iran, amid the Israel-Hamas war, tried to stoke both anti-Islamophobia and anti-Israel sentiments in U.S. populations through inauthentic social media campaigns. While these influence efforts have not resulted in major incidents, they contribute to the ambient level of mistrust and can indirectly incite unstable individuals.
• Surge in infrastructure attacks: There has been an unprecedented spike in physical attacks on U.S. critical infrastructure over the past year. The energy sector in particular is seeing alarming trends. The North American Electric Reliability Corp (NERC) reported 185 incidents of physical attacks or serious threats against the U.S. electric grid in 2023 – a record high, doubling the number from just two years prioreenews.neteenews.net. Many involve unidentified individuals shooting at power substations or deliberately sabotaging equipment. For example, an incident in North Carolina in 2022 left 45,000 people without power after attackers disabled two substations, and similar tactics have been seen in Oregon, Washington, and the Midwesteenews.net. While most attacks have not caused prolonged outages (only ~3% result in service disruption per NERC)eenews.neteenews.net, the trend is worrying. Authorities suspect some of these actions are linked to extremist ideologies (a white supremacist plot to attack the grid was foiled by the FBI earlier in 2023), aiming to sow chaos. Additionally, malicious cyber activity targeting infrastructure has risen in parallel – international tensions (Ukraine, Israel conflicts) have driven more cyber probes of U.S. utilitieseenews.net. So far, no major cyber-induced outage has occurred, but Iranian and Russian hackers have attempted intrusions.
• Public safety and other threats: Beyond terrorism, the homeland faces other security concerns. Mass shooting incidents by unaffiliated individuals remain a persistent threat, often outpacing terrorism in terms of casualties. The opioid/fentanyl epidemic, fueled by drug cartels (with ingredients often sourced from China), continues to kill over 100,000 Americans a year, although overdose deaths have slightly declined by ~10% recently with federal effortsdhs.gov. At the border, migrant influxes surged in late 2024, prompting renewed security deployments; while most migrants are asylum seekers, a few individuals on terror watchlists were intercepted among the millions, underscoring a potential infiltration risk. Also, civil unrest potential: protests related to police use-of-force incidents or economic grievances (inflation, strikes) have been mostly peaceful, but flashpoints could arise, especially as the nation remains politically polarized.

Strategic Implications:

• Threat to political stability: Elevated domestic extremist activity threatens not only lives but the functioning of democracy. Plots against elected officials or government facilities could deter public service and further erode trust in institutions. If an extremist attack were to succeed (for instance, an assassination or bombing), it could provoke a cycle of retaliatory violence or heavy-handed crackdowns, both of which adversaries like Russia might exploit propagandistically. Moreover, widespread belief in conspiracy theories (often fed by foreign disinformation) is creating a segment of the populace that is susceptible to calls for violence. The U.S. must navigate responding to threats without deepening societal divides.
• Infrastructure as Achilles’ heel: The uptick in grid attacks reveals a domestic security gap – many substations and critical nodes remain soft targets. A well-coordinated attack on multiple points in the power grid during a peak usage time (or combined with a cyberattack) could cause region-wide blackouts. Beyond immediate disruption, this could shake confidence in the government’s ability to provide basic security and services. Adversaries are surely observing these vulnerabilities; in a conflict, foreign actors could seek to incite or even assist domestic extremists to sabotage infrastructure (a classic “hybrid warfare” technique). Ensuring reliable utilities under duress is thus a national security priority.
• Resource strain and mission creep: The demands on law enforcement and security agencies are high – from monitoring jihadist terrorism to domestic militias, from securing the border to countering cyber threats. This wide threat spectrum can strain resources and focus. For instance, diverting agents to handle a spike in domestic extremism cases might reduce attention on foreign terror plots or counterintelligence against spies. Additionally, the military might be called to support domestic missions (as seen with National Guard at the border or Capitol security), which, if prolonged, can impact readiness for foreign deployments. Balance and clear prioritization are required to avoid being caught off-guard.
• Public confidence and cohesion: Events like contested elections, riots, or major terror attacks can deeply impact the national psyche. America’s adversaries benefit when we are divided and distrustful of each other. Conversely, showing resilience – such as smoothly handling security for major political events and transparently countering misinformation – can bolster unity. The presence of these threats means the administration must communicate carefully with the public, to raise awareness without causing undue alarm, and to unite citizens around common values in confronting those who seek to harm civilians or democratic processes.

Recommended Action:

• Intensify Domestic Intelligence & Law Enforcement Coordination: Direct the FBI-led Joint Terrorism Task Forces (JTTFs) to prioritize investigations of domestic extremist cells or individuals who present imminent threats, especially those discussing targeting infrastructure or officials. Increase DHS intelligence reporting to state and local partners about election-related threat trendsdhs.gov. Consider temporary surges of DOJ prosecutors to handle domestic terror and hate crimes cases to ensure swift action. Encourage passage of domestic terrorism statutes (if not already in place) to bolster charges against perpetrators planning politically motivated violence.
• Infrastructure Hardening: Launch a Critical Infrastructure Security Initiative focusing first on the electrical grid. Work with utilities and state regulators to immediately boost physical security at the most sensitive substations (e.g. install cameras, fencing, and where feasible, station security personnel or partner with local law enforcement for extra patrols). CISA and Department of Energy should expedite the development of a distributed sensor network on the grid to detect anomalous events (like gunshots or equipment tampering) in real time. Expand grant funding for states to harden other key infrastructure (water treatment plants, communications hubs). Also, rehearse incident response – tabletop exercises on how to quickly restore power if multiple substations are sabotaged, including mutual aid between utilities.
• Counter-Disinformation & Community Outreach: Enhance the Cybersecurity and Infrastructure Security Agency’s (CISA) foreign influence task force to debunk and preempt false narratives onlinedhs.gov. This could involve real-time collaboration with social media companies to flag malicious foreign influence campaigns targeting U.S. audiences. Simultaneously, invest in digital literacy and civics programs at the community level, so citizens are less susceptible to extremist propaganda and conspiracies. Empower credible local voices (clergy, civic leaders) through DHS grants to run violence-prevention and de-radicalization dialogues in communities with rising extremist recruitment. For diaspora communities threatened by transnational repression (e.g. Iranian-Americans, Chinese dissidents), increase protective measures and prosecute any unlawful surveillance or harassment linked to foreign governments.
• Border and Drug Measures: Continue the robust border security posture, but complement it with diplomatic efforts to address migration root causes (engage Mexico and Central American countries to disrupt smuggling networks and improve their asylum processing). Expand screening of cargo and mail for fentanyl and precursor chemicals (in cooperation with China, pressuring them to crack down on illicit chemical exports). Domestically, support law enforcement operations against major drug distribution rings and broaden access to addiction treatment – this is both a public health and security issue, as drug profits often fund transnational criminal organizations.
• Crisis Response Preparedness: Instruct FEMA, FBI, and National Guard units to review contingency plans for worst-case domestic scenarios (e.g. a multi-city blackout scenario or simultaneous terror attacks). Conduct interagency exercises on scenarios like a major cyber-induced infrastructure failure, ensuring clear roles between federal, state, and local authorities. Update the public communication strategy for crises – be prepared to quickly inform citizens of what is known/not known in an incident, to quash rumors that often spread panic or division.
• Preserve Civil Liberties: Ensure that efforts to counter domestic threats do not overreach in ways that could be perceived as targeting constitutionally protected speech or groups unfairly. All initiatives should be scrupulously reviewed by legal counsel. Emphasize to the public that our response is focused on violence and illegal acts, not ideology. This balance is key to maintaining public trust and cooperation in our security efforts.

Watchlist & Emerging Risks

• North Korea WMD Escalation: U.S. intelligence assesses Pyongyang is technically ready to conduct a seventh nuclear test, awaiting only Kim Jong-un’s political decisionkoreatimes.co.krkoreatimes.co.kr. Such a test could come with little warning and would mark a grave provocation, possibly intended to demonstrate a tactical nuclear warhead. Additionally, North Korea is expected to continue frequent ballistic missile launches, including potentially longer-range solid-fuel ICBMs that reduce warning time. Monitoring for signs of an imminent test or missile launch (e.g. activity at Punggye-ri test site or satellite imagery of launch prep) remains a high priority.
• China-Taiwan Flashpoint: The Taiwan Strait is a potential powder keg for 2025. China’s military is likely to maintain a heightened ops tempo around Taiwan – recent exercises saw a record 153 Chinese warplanes in a single day around the islandreuters.com. Any miscalculation (like a mid-air collision or missile firing) could spark a crisis. Taiwan’s January 2024 elections brought to power a leadership Beijing perceives as pro-independence, which could spur China to increase coercive measures (economic pressure, more frequent incursions). We should watch for signs of a possible PRC blockade rehearsal or live-fire drills next year. The U.S. Navy will need to uphold freedom of navigation patrols, and the Watchlist includes ensuring our military-to-military hotlines with China stay open to defuse incidents.
• Global South Geopolitical Shifts: The influence of non-Western alliances is rising. The expanded BRICS bloc (now 10 members) and initiatives like the Saudi-Iran rapprochement (brokered by China) reflect a changing diplomatic landscapecfr.orgcfr.org. These countries are coordinating to seek alternatives to Western-led institutions – for example, pushing more trade in local currencies and boosting the BRICS New Development Bank. While these shifts are gradual, they could, over time, reduce U.S. leverage in international forums and complicate sanction regimes. Continuous engagement and offering tangible partnerships to these emerging powers can mitigate the drift.
• Climate Security & Humanitarian Crises: Extreme weather events and resource scarcities are increasingly intersecting with security. 2024 saw record heat and drought in parts of Africa and Asia, contributing to food insecurity and conflict (notably, drought fueled unrest and migration in the Sahel, and severe floods displaced millions in South Asia). The El Niño conditions expected through 2025 may exacerbate such extremes. Regions to watch include the Horn of Africa (where drought could reignite famine and instability), the Sahel (worsening desertification amplifying jihadist insurgencies), and water disputes in Central/South Asia (melting glaciers and erratic monsoons heightening India-Pakistan water tensions). The National Security Council should be prepared for more frequent climate-linked humanitarian crises requiring relief or even stability operations.
• Space Domain Competition: As noted, potential adversaries are honing counterspace capabilities. In addition to monitoring known tests, keep watch for subtler developments: e.g. unusual maneuvers by rival satellites near critical U.S. satellites (GPS, reconnaissance); the launch of Inspector satellites that could be precursors to space weapons; or jamming incidents against U.S. commercial satellites (which could presage attacks on military ones). The planned creation of a combined U.S.-Allied space monitoring network in 2025 will help. Any sign of adversaries preparing to blind or disable space assets would be an acute warning indicator requiring immediate attention.
• Terrorism and Conflict Spillover: Despite global focus on great-power issues, jihadist terrorism remains a simmering threat. ISIS affiliates in Africa (notably ISIS-West Africa in the Sahel and Al-Shabaab in Somalia) have expanded territory amid weak governance. Their success could create larger safe havens and eventually external plotting. Likewise, instability in Afghanistan under the Taliban (economic collapse and ISIS-K attacks) raises the risk of that territory again becoming a terrorist base; the Taliban’s commitment to blocking international terror is questionable. Finally, the unresolved war in Sudan and chaos in Haiti pose risks of regional spillover and humanitarian disaster. These will require diplomatic and possibly peacekeeping responses and should stay on the Watchlist despite being outside headlines.

Each of the above emerging risks demands sustained monitoring and preventive action where possible. We will continue to update assessments and provide early warning as developments unfold, ensuring the U.S. is never caught by surprise by these evolving threats.understandingwar.orgbrookings.edu