What We’re Watching

📍U.S. Approves Largest-Ever Arms Sale to Estonia After Russian Aggression

Facts: On Oct. 1,  the Trump administration announced its plan to massively expand critical arms sale to Estonia. The record-breaking agreement, now priced at $4.73 billion, is a significant increase from its original value of $500 million in 2022. Using the Arms Export Control Act, the White House’s decision will expand the Baltic nation’s long-range firepower capabilities with hundreds of precision missiles. The sale includes new Army Tactical Missile Systems (ATACMS), a long range weapon Ukraine uses to strike inside of Russia. Analysts say the move is a response by the White House to Moscow’s latest incursions throughout Europe.

Analysis: The timing and scale of this deal marks a significant expansion in America’s commitment to NATO defense. The announcement comes just days after President Trump questioned Russia’s military strength. Additionally, it follows Estonia’s NATO Article 4 invocation, calling for consultation among its allies in response to airspace violations by Russian jets. In the face of these events, the agreement raises the number of missile systems tenfold in a nation that directly borders Russia, introducing new strategic risks for Europe and the U.S. With Russian drone incursions proliferating across Europe, America’s major commitment to Baltic security places regional actors at greater odds with Putin, escalating the risk of further action by either side.

📍Seoul Unable to Pay $350B as U.S. Trade Negotiations Reach Deadlock

Facts: On Sept. 25, South Korea’s National Security Advisor announced Seoul will not be able to invest $350B upfront in U.S. projects as previously agreed, jeopardizing trade talks. Seoul’s investment promise came in July as part of an agreement to lower U.S. tariffs on Korean imports from 25% to 15%. Talks have since stalled as Korean leaders fear that compliance with U.S. demands would make the Korean won extremely volatile due to Korea’s limited foreign currency reserves. The U.S. Commerce Secretary is not budging, however, threatening steep tariffs if the investment falls through.

Analysis: Washington appears to have made demands that Seoul cannot meet, highlighting practical limitations of Trump’s tariff strategy. Although Trump’s coercive use of tariffs has extracted steep concessions from nations like Japan, his demands from Korea are likely a step too far. The negotiation troubles come just weeks after the detention and partial deportation of hundreds of Korean workers at a Georgia Hyundai plant, generating a sense of betrayal across the Korean political spectrum. Mounting frustration in Seoul suggests Washington may need to soften its stance to avoid alienating a critical economic and security ally in East Asia.

📍“Czech Donald Trump” Wins Parliamentary Elections

Facts: On Oct. 4, the billionaire populist Andrej Babis’s party won the highest percentage of votes ever achieved by a single party in a Czech parliamentary election. Babis’s party, the ANO (Association of Dissatisfied Citizens), represents a large coalition of Czechs who are demanding nationalist, Czech-first policies in response to widespread frustration with the incumbent government’s economic policies. Babis, who was prime minister from 2017 to 2021 and was nicknamed the “Czech Donald Trump,” has been implicated in several corruption scandals. He awaits a verdict from a Czech district court for allegedly defrauding the EU of $2 million to secure subsidies for his business empire.

Analysis: The Czech election coincides with an increase in pro-Russia, anti-EU sentiment sweeping across Eastern and Central Europe, threatening Ukraine’s support and opening the door to increased Russian political influence across the West. European officials are concerned that a partnership between Babis and the right-wing fringe parties will steer the Czech Republic towards Hungarian Viktor Orban’s and Slovakian Robert Fico’s pro-Russia governments, which oppose EU sanctions on Russia and refuse to provide military aid to Ukraine. Babis has already pledged to cancel Prague’s ammunition initiative that has delivered millions of artillery shells to Ukraine. 

📍Gen-Z Protests in Morocco Continue Amid Police Violence

Facts: Youth-led protests persist across Morocco despite police killing three demonstrators on Oct. 2. Protesters are calling for current Prime Minister Aziz Akhannouch to resign over the country’s spending in preparation for the 2030 FIFA World Cup, which Morocco will host along with Spain and Portugal. The spending could total over $5 billion USD, even though hospitals and schools across the nation remain underfunded. The protests follow in the footsteps of similar youth movements in Nepal, which resulted in the resignation of their Prime Minister, and in Madagascar, where protesters are demanding the dissolution of their government following the arrest of two Antananarivo politicians.

Analysis: The protests send a clear message to rulers of countries around the world: power now belongs to the youth. Many members of Gen Z believe that their leaders are out of touch with society, and Morocco’s Akhannouch, the 64 year-old heir to a multibillion dollar company, is no exception. This message will strongly resonate with American youth as well. The average age of the last three U.S. presidents at the time of election was nearly 76 years old, a frustrating norm for many young Americans.

📍Taiwan Rejects U.S. Proposal to Split Semiconductor Production 50-50

Facts: On Oct. 1, Taiwan rejected a U.S. proposal to split semiconductor production evenly between it and the United States. While U.S. Commerce Secretary Howard Lutnick previously said that Washington’s offer to Taipei would be a 50-50 split, Taiwanese Vice Premier Cheng Li-chiun stressed that such an arrangement was never under negotiation. The U.S. administration has expressed strong interest in reshoring semiconductor production, as 60% of the world’s chips are produced in Taiwan. This manufacturing dispute comes amid the U.S. search for technological independence from China. Similarly, Taiwan looks to maintain its economic leverage to ensure U.S. defense against Chinese pressure.

Analysis: Taiwan’s refusal highlights its primary deterrence strategy vis-à-vis China: using chips to remain indispensable to the global economy. Taiwan’s position as the largest producer of semiconductors raises the costs of Chinese incursions and deepens its economic ties with the U.S. Additionally, this gives the United States another reason to defend Taiwan beyond safeguarding global democracy; protecting the crucial supply of semiconductors America requires to stay technologically ahead of China. For Washington, the setback showcases that even close partners resist when national interests are at stake.

Looking Ahead

📍French Authorities Raid Suspected Russian Shadow Vessel, Escalating Counter-Espionage Operations

Our View: On Oct. 1, French military personnel detained an oil tanker linked to Russia’s shadow fleet, which uses unmarked ships to covertly transport crude oil and skirt sanctions. French President Emmanuel Macron declined to confirm or deny allegations that the vessels are connected to the Russian drones that violated Denmark’s airspace last month. Vladimir Putin responded by accusing France of “whipping up the hysteria” about a nonexistent Russian threat. France’s decision to detain the ship and put the captain on trial signals a shift to boldly and publicly challenge Russia’s illicit economic activities and hinder a key source of Russia’s wartime revenue.

What We’re Reading

💡Donald Trump summoned special envoy Richard Grenell back from Venezuela, formally halting diplomatic outreach efforts toward Venezualan President Nicolas Maduro.

💡The Taliban returned internet services on Sunday after instituting a two-day blackout that interrupted communication and economic activity.

💡Russian regions in the Far East and Crimea have instituted mandatory gas rations following Ukrainian attacks on oil refineries throughout August and September.

💡Greta Thunberg and other members of the Global Sumud Flotilla were detained and deported upon arrival in Israeli waters Thursday.

One For The Road…

A new study by the Energy & Climate Intelligence Unit (ECIU) found that global emissions have grown 0.3% annually since the 2015 Paris Climate Agreement, five times slower than average annual emissions from 2005 to 2015.