Competitive Strategy in a Changing International Landscape 11 these contentious issues is the U.S.–EU Trade and Technology Council.58 The United States also competes with both allies and competitors in the arms industry. The largest arms exporters in the world are the United States, Russia, France, Germany, and China.59 In the Middle East, the United States must manage fraught relations and diverging interests with Iran, Saudi Arabia, Turkey, and Israel.60 Stability in the region requires reducing tensions with Iran so as to avoid a major regional armed confrontation in the immediate term while helping part- ners transition to a post-oil economy in the longer term.61 Unexpectedly, the 2022 Russian invasion of Ukraine increased the tensions and mistrust between the United States and both Saudi Arabia and the United Arab Emirates.62 In addition, many traditional U.S. allies, and hopeful partners, invest in arms from America’s competitors such as Russia. For example, both Turkey (a NATO ally)63 and Saudi Arabia64 purchased or agreed to purchase S-400 air defense missiles from Russia, straining relations with the United States. In the Indo-Pacific, leveraging U.S. advantages means modernizing bilateral ties with traditional allies (such as Japan65 and the Republic of Korea)66 and solidifying or expanding multilateral relations (such as the security pact with the United Kingdom and Australia)67 and the Quadrilat- eral Security Dialogue, called the Quad (which includes Australia, India, Japan, and the United States). The United States must also encourage allies to strengthen their own bilateral security cooperation (e.g., Australia and Japan).68 Yet, as the nuclear submarine deal with Australia demonstrated, sometimes U.S. cooperation with its allies can hurt relations with other allies.69 Improving relationships in the region also means closer coopera- tion with allies, such as the Philippines, and partners like India, Vietnam, and other nations where interests overlap without pressuring them into binding defense commitments that they are not yet ready to assume. For example, one of the key members of the Quad, India, also signed a major trade and weapons deal with Russia in 2021, which complicates U.S. aspi- rations for closer security ties.70 Clearly, the United States will have to determine where it can or cannot compromise with its allies and partners in competing with both China and Russia. Understanding and adapting to these major shifts in the global secu- rity environment is essential to developing a competitive strategy for the United States. While some elements of the current strategic environment mirror those of the Cold War, others are clearly different and require a new U.S. grand strategy or strategic vision. The diffusion of power, the proliferation of truly global issues requiring effective and broad interna- tional cooperation, deepening economic interdependence, and the need to capitalize on an extensive U.S. network of allies and partners present both challenges and opportunities for the United States. At the same time, the United States cannot wish away competition from Russia and China. Just
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