Taking stock: Where are geopolitics headed in the COVID-19 era?

Mon, Jun 1, 2020

Taking stock: Where are geopolitics headed in the COVID-19 era?

Issue Brief by Jeffrey Cimmino, Matthew Kroenig, and Barry Pavel

Related Experts: Barry Pavel, Matthew Kroenig, Jeffrey Cimmino,

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The COVID-19 pandemic is a strategic shock, and its almost immediate, damaging effects on the global economy constitute a secondary disruption to global order. Additional secondary strategic shocks (e.g., in the developing world) are looming. Together, these developments pose arguably the greatest threat to the global order since World War II. In the aftermath of that conflict, the United States and its allies established a rules-based international system that has guaranteed freedom, peace, and prosperity for decades. If the United States and its allies do not act effectively, the pandemic could upend this order.

Post-Covid-19

This issue brief considers the current state of the pandemic and how it has strained the global rules-based order over the past few months. First, it considers the origins of the novel coronavirus and how it spread around the world. Next, it examines how COVID-19 has exacerbated or created pressure points in the global order, highlights uncertainties ahead, and provides recommendations to the United States and its partners for shaping the post-COVID-19 world.

Taking stock: Where are geopolitics headed in the COVID-19 era?

Mon, Jun 1, 2020

Executive summary: The virus and global order

The COVID-19 pandemic is having dramatic effects on everyday life, but its geopolitical implications could prove to be even more profound. The pandemic is exacerbating and unleashing pressure points in the global order, including intensified US-China competition, that could fundamentally reshape geopolitics.

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Strategic shock: What is COVID-19?

On December 27, 2019, health officials in Wuhan, China, learned that a novel coronavirus was responsible for a mysterious respiratory illness that proved resistant to anti-flu drugs and which had been observed in patients several weeks prior. Over the next few weeks, Chinese officials attempted to cover up the outbreak, reprimanding doctors for publicly discussing the new virus, ordering samples of the virus destroyed, and denying it could be spread from human to human. By January 13, the virus had spread beyond China, and soon after arrived in the United States. Chinese officials eventually implemented lockdowns, but not before around five million people had left the city of Wuhan unscreened.

COVID-19 is a disease caused by the novel coronavirus, part of a family of viruses known to cause respiratory infections in humans. Other well-known coronavirus-induced diseases include severe acute respiratory syndrome (SARS), which infected thousands in China and elsewhere from 2002-03, and Middle East respiratory syndrome (MERS). Like SARS, COVID-19 originated in China, in this case most likely at an animal market in Wuhan.

At the time of writing, the COVID-19 pandemic had infected more than 4.2 million individuals worldwide, although the number of infected is almost certainly higher as testing has been limited in most countries, including the United States. Around 1.3 million cases of COVID-19 have been confirmed in the United States, with New York and New Jersey affected the worst. The virus’s estimated mortality rate is 1 percent, with older individuals, as well as those with preexisting conditions, at a greater risk of death. At the time of writing, there were more than 280,000 global deaths, including around 80,000 in the United States.

The pandemic is unlikely to end anytime soon, even as at least 70 different vaccines are in development around the world. It could take more than a year before a vaccine and other treatments are ready for distribution. In the meantime, many countries have enacted measures to require social distancing in order to slow the virus’s spread and prevent health care systems from being overwhelmed. A March study by researchers at Imperial College London warned that the time when the measures are implemented, as well as strict enforcement, are critical for effective social distancing.

Countries such as Italy and Spain have seen their health care systems overrun by COVID-19 patients. In the United States, while the initial response to the virus was slow, social distancing measures appear to have slowed the spread of the virus in some parts of the country, although new hotspots continue to emerge.

Pressure points: How COVID-19 has affected the global order

At the onset of the COVID-19 pandemic, many analysts suspected that the crisis would alter the global order. After all, we have seen throughout history that plagues have contributed to the rise and fall of great powers. And, indeed, we are seeing that COVID-19 is already having important geopolitical consequences.

A Brief History of Plagues and Geopolitics

A brief consideration of history reveals pandemics have the capacity to shape the rise and fall of great powers. In the fifth century BCE, Athens was a vibrant commercial state and naval power, but it fell victim to a plague during the Peloponnesian War with its rival Sparta. Its population ravaged by disease, Athens was defeated by the Spartans and lost its position as the premier power in Greece.

Similarly, early modern Venice was a commercial center and naval power, a dominant force in the Mediterranean. The Italian Plague of 1629-31 decimated Venice, however, and Northern European states such as England and the Dutch Republic filled the gap left by the declining Venetian Republic. The word “quarantine” comes from the Venetian dialect’s word for “40 days.”

In the fourteenth century CE, the Black Death led to the collapse of the British feudal system, which helped lay the groundwork for the rise of the modern capitalist economic system. In the fifteenth and sixteenth centuries, the Aztec Empire was destroyed by smallpox, opening the door to European colonization in the Americas. More recently, the Spanish Flu of 1918 killed fifty million people, adding to the tens of millions who died during World War I.

As these examples illustrate, pandemics have the capacity to alter geopolitics and to accelerate already present trends. We are currently seeing such effects in many areas, most notably in the global economy.

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Trouble for the global economy and developing world

The open, interconnected global economy is being battered by the pandemic. Some of the world’s largest economies, including the United States, China, the EU, and Japan, have put forth massive stimulus and relief plans to limit the economic damage. Nevertheless, the current and anticipated economic downturn has already spurred a small cottage industry of speculation about the end of globalization.

Since the start of the COVID-19 outbreak, major stock indices ranging from the Dow Jones Industrial Average to the Nikkei have witnessed large falls. Unemployment is skyrocketing in the United States, while in China industrial production is falling and decades of annual growth almost certainly will end this year. The travel and hospitality industries are suffering as countries implement tough travel restrictions to stem the spread of the virus. Global supply chains are being disrupted as countries face lockdowns and factories reduce or halt output.

At the start of 2020, the International Monetary Fund (IMF) and the Organisation for Economic Cooperation and Development (OECD) each predicted the global economy would grow by around three percent by year’s end. The OECD has since cut its prediction in half; some analysts think this revision might be too optimistic.

Furthermore, while many developing countries have yet to suffer the worst health effects of the pandemic, their economies are already suffering negative consequences. African countries such as South Sudan and Angola, which depend heavily on exports to China, are facing a decline in demand. China’s demand for oil, for example, has fallen by around twenty percent. Declining production in China is also leading to a shortage of goods in many African nations. For tourism-dependent African economies, global travel restrictions are wreaking havoc.

In developing countries with fragile health care systems and poor living conditions, social distancing measures are essential to preventing a catastrophe. Many such countries have put in place lockdowns. Nevertheless, the developing world remains vulnerable to viral spread and a worsening downturn due to decreased production and reduced demand for certain exports (e.g., oil) around the world.

Major uncertainties ahead:

How long will the global economic downturn last, and how damaging will it be?
When will economic recovery begin, and how long will it take to make up the losses sustained due to the pandemic?
Will certain countries limit the economic downturn better, or recover faster, than others? How could this affect the global balance of power?
How will the economic downturn affect the future of globalization and an open, interconnected global economy? How will countries try to insulate themselves from global supply chain shocks?
Will the developing world be spared the worst effects of the virus or will these hit them after it peaks in developed countries, resulting in a combined medical and economic catastrophe?
Will the United States step in to help developing countries or will China be perceived as a more reliable partner among these nations?

US-China Rivalry Intensifies: Economy

Since Xi Jinping became president of China in 2013, the US-China relationship has grown more confrontational. Xi adopted a more assertive foreign policy and reinforced domestic authoritarianism. The 2017 National Security Strategy of the United States of America declared the return of great-power rivalry with Russia and China to be the foremost threat to US security and economic well-being. The COVID-19 pandemic thus comes at a time when a rising power (China) has been using its newfound strength to rattle the international order, and the reigning global power (the United States) is perceived by many as losing influence. In just a few months, the virus has shaken the economies of both of these economic giants, turned into a battle for political influence abroad, and likely raised the prospect of military conflict.

China’s economy, which is suffering due to the coronavirus, contracted for the first time in almost half a century, shrinking by 6.8 percent in the first quarter of 2020. The world’s second-largest economy saw retail sales and industrial output decline significantly in the first two months of 2020, according to data published in March. China’s unemployment rate also grew. Chinese officials have tried to paint the downturn as temporary, but the country’s economic outlook for the year is likely to remain poor, especially as global supply chains and demand are negatively impacted by the disease. Manufacturers are leaving China, and this early trend could continue even after the pandemic wanes.

In response to the economic crisis, China is prepared to infuse trillions of yuan into the economy to stimulate it, but Chinese officials will have to lower growth expectations for 2020. One forecast suggested growth would be around three percent, half of this year’s six percent target, although a recession is also possible.

The US economy is also being devastated by the virus, with the stock market highly volatile and subject to steep declines, and a recession certainly ahead. The number of Americans filing for unemployment has also jumped as the transportation and hospitality industries, among others, have suffered. More than 30 million Americans have filed for unemployment since mid-March.

To limit the economic damage of the virus, Trump signed a $2 trillion relief and stimulus package that includes direct cash payments to most Americans. The legislation also expands access to unemployment insurance and provides loans to small businesses. Even with this legislation, the US economy is expected to continue to take a severe hit, and the Trump administration is weighing when and how to reopen the economy without unleashing a surge of new infections.

The relative rapidity of economic recovery in both the United States and China may be a crucial determinant of their near to mid-term economic health. If China recovers faster while the United States remains in lockdown or has a sluggish reopening, common trading partners such as Japan and South Korea will have no choice but to increase economic exchange with China.

Major uncertainties ahead:

Will the pandemic facilitate a balance of power shift in favor of China? Or will the United States and its allies reassert global leadership and emerge stronger from the crisis? Or will both the United States and China emerge equally weakened or strengthened?
Will the US-China relationship enter an extended phase of competition, or will cooperation on more than a limited set of issues, such as global public health, be possible in the aftermath of the pandemic?
Will China’s economy recover more rapidly than Western economies? And, if so, will this facilitate a shift in the balance of power?
Will US-China economic decoupling continue, such as if the United States seeks to reduce dependence on China for certain pharmaceutical and medical supplies?

US-China Rivalry Intensifies: Political Influence

The pandemic also sharpens the United States and China’s battle for global political influence. Notable is the return of a battle over domestic political and economic systems: China’s model of authoritarian state capitalism stands against the US model of open-market democracy. The US model faces skepticism entering the post-COVID-19 era, both as a result of the global financial crisis of 2008 and concerns about a US withdrawal from the world stage. The Chinese model, on the other hand, appears to some to offer political stability and steady growth. The current crisis gives both countries a chance to show their respective systems’ resilience and capacity to lead a global recovery.

China’s image was tarnished during the early stages of the pandemic when it mismanaged its response and suppressed information, thereby allowing the virus to spiral out of control into a global disaster. In response, China launched a propaganda war to deflect blame from its irresponsible behavior.

Initially, Chinese officials tried to muddy the waters, with spokespeople from the country’s Ministry of Foreign Affairs claiming in early March that the virus’s origins had yet to be determined, despite the prevailing scientific opinion it had emerged in Wuhan. Some Chinese officials then started claiming the US military unleashed the virus on China. The United States challenged this narrative, with Trump, US Secretary of State Mike Pompeo, and others labeling the disease the “Wuhan virus” or “Chinese virus.” Cui Tiankai, China’s ambassador to the United States, said in a March interview that spreading conspiracy theories about the coronavirus’s origins was “very harmful,” seeming to indicate a break with other Chinese authorities. But while Chinese officials have pulled back from blaming the United States directly, they have focused instead on arguing that determining a virus’s origins is difficult.

As this conflict over the virus’s origins was heating up, the US and Chinese governments engaged in a media war. In February, Chinese authorities revoked the press credentials of three Wall Street Journal reporters after the newspaper published an opinion column criticizing the government’s response to the virus. In March, China announced that it would expel all US nationals working for the New York Times, the Wall Street Journal, and the Washington Post, and demanded these newspapers and other outlets release detailed information about their operations. The United States, meanwhile, announced in February it would treat five Chinese state-run media outlets as foreign missions and require them to register their property with the State Department. In early March, the Trump administration told several Chinese state news organizations to reduce the number of Chinese nationals working in the United States.

In addition to the propaganda and press conflicts, the third front in this war of media narratives and political influence came in the form of China sending aid to US partners in Europe. To repair its image and show its resilience, China has sent medical supplies to European countries suffering from the virus.

On March 21, Chinese aid arrived in Serbia, prompting profuse expressions of gratitude from Serbian President Aleksandar Vučić. China also sent aid to Italy, which has been hit particularly hard by the pandemic. More recently, Germany agreed to a deal with China to obtain medical supplies.

But much of the equipment China has provided has proven faulty. The Netherlands recalled hundreds of thousands of face masks it received from China, while Spain determined 60,000 testing kits it had received were defective.

In Asia and Africa, China’s image has taken a hit in some countries where it is completing infrastructure projects as part of its Belt and Road Initiative (BRI). Many BRI projects have been delayed, with Chinese workers prevented from leaving China and factories unable to produce the requisite materials. Furthermore, many residents of countries where these projects are taking place are reportedly fearful of being infected by Chinese workers, which has bred anti-Chinese sentiments.

China has also renewed its push for a “Health Silk Road,” an extension of its BRI in which China would lead coordination on public health matters with participating countries. As described by Nadège Rolland of the National Bureau of Asian Research, the Health Silk Road “is not a multilateral institution per se,” but “more a hub-and-spoke organism” with China playing the central role.

Relations with African nations have also worsened due to rising xenophobia in China. In the Chinese city of Guangzhou, African residents have been targeted for forced quarantines and some have been evicted from their homes. These actions have prompted public criticism from African officials.

While China is trying to regain its footing in developing countries tied to the BRI, the US Agency for International Development (USAID) and the State Department have given more than $500 million to combat the virus’s spread around the world. Combined with charitable giving and the work of private businesses, the United States has provided more than $3 billion to boost global health security.

In recent weeks, China has reported significant improvements in its effort to control the coronavirus, which has contrasted sharply with the situation in the United States. Officially, the United States has reported several hundred thousand more cases than China. The initial US response to the virus was perceived as slow, and even now more widespread testing is needed to gauge a full picture of the virus’s presence. But China’s reported success in containing the disease is likely untrustworthy.

A classified US intelligence report reportedly claimed Chinese authorities have intentionally concealed the extent of the outbreak. Other reporting suggests China has significantly undercounted infections and deaths, although it is unclear if the culprit is China’s senior leadership, local officials trying to obscure bad news, or both.

What is clear is that China is trying to clean up its global image after mismanaging the early stages of the pandemic. The United States’ struggle to mitigate the virus’s spread has given China a window to increase its influence abroad, but even with that opportunity it has continued to make missteps. In sum, the fight for political influence and global opinion has intensified competition between the United States and China.

Indeed, one domestic consequence of this fight has been a rare example of bipartisanship in the United States. A majority of Republicans and Democrats agree that the United States needs a tough approach to China. There is also a bipartisan consensus that Chinese authorities should not be trusted and that China bears responsibility for the pandemic.

Among members of the US Congress, US Sen. Tom Cotton (R-AR) has said China must be held accountable for the pandemic, while others have urged decoupling from China. Lawmakers have expressed concern about the United States being overly dependent on China for medical equipment and ingredients in medicines. Another senator, US Sen. Marco Rubio (R-FL), has said China has proven to be an irresponsible global power, thereby necessitating a more confrontational approach in this time of crisis.

Major uncertainties ahead:

In the coming months, will the narrative about the pandemic center more on China’s mismanagement and suppression of information, or a perceived lack of US global leadership?
Despite initial stumbles, will China be able to expand its soft power abroad, particularly among the United States’ transatlantic partners? Or will faulty equipment and continued resentment for its missteps limit China’s ability to extend its soft power?
To what extent is the health situation still serious in China? Or have authorities largely contained the virus?

US-China Rivalry Intensifies: Military

The United States and China are diverting military resources to address the crisis at home and facilitate humanitarian relief. This could prove more costly to the United States as it tries to maintain the ability to project military power worldwide.

The United States also has struggled with a military distraction at home after the now-former Acting Navy Secretary Thomas Modly called the captain of the USS Theodore Roosevelt, an aircraft carrier, naïve and stupid. The captain had sent a memo to superiors highlighting a crisis aboard the ship due to crew members being diagnosed with COVID-19. The memo was quickly obtained by the press and published. Modly fired the captain and then called him naïve in a speech to the carrier’s crew. The subsequent uproar prompted Modly to resign.

The USS Theodore Roosevelt is now stuck in Guam, and the other US aircraft carrier in the Pacific, the USS Ronald Reagan, was, until early May, stuck in Japan while undergoing several months of maintenance. The crew of the USS Nimitz, the next carrier scheduled for duty in the Pacific, was quarantined in Washington state until late April. Both ships are now preparing for deployment, but China has been able to operate the lone carrier in the region, which it recently sent near the territorial waters of Japan and Taiwan along with several battleships.

With the United States having to divert resources and deal with the distraction in its Navy at home, it is possible China could calculate that the United States is insufficiently prepared to respond militarily far from its shores. China could use this crisis as an opportunity to advance on targets in its near abroad, such as Taiwan. Prior to sending the carrier group, the Chinese military had increased flight drills near Taiwan.

Perceptions of military readiness also could change based on how the virus affects military forces. As of now, the virus has had a limited impact on US forces, and China claims its forces are virus-free—although that is almost certainly inaccurate. In addition, the virus makes it difficult to recruit and train military personnel given that people are unable to congregate.

China could also apply lessons and technologies from its lockdown in Wuhan to military conflict. China’s use of drones to track individual Chinese citizens, for example, has possible intelligence, surveillance, and reconnaissance (ISR) applications on the battlefield.

To boost the US presence, US Indo-Pacific Command has called for $20.1 billion in additional spending between 2021 and 2026 directed at deterring China’s military in South and East Asia. The risk of a direct US-China military conflict remains low, but it is higher than before the COVID-19 outbreak.

Major uncertainties ahead:

Will the virus infect large swathes of US or Chinese troops, further damaging readiness? Will China calculate that the United States’ military readiness is weakened enough to engage in military opportunism, such as against Taiwan?

Russia Faces Internal Pressure, But NATO Preparedness Is Weakened

While China is the United States’ primary geopolitical adversary, Russia remains a key player in the global landscape, and in recent years has acted to disrupt the rules-based order. It has intervened militarily in Georgia, Ukraine, and Syria. Russia has also interfered in Western elections and conducted influence operations to divide NATO. Unlike China, however, Russia is not a rising power and its economy is smaller than that of Brazil, Italy, and India. Still, disorder caused by a global pandemic serves Russia’s interest in undermining the legitimacy of the US-led world order. But Russia’s fragile health care system also leaves it highly vulnerable should the virus continue to make inroads in the country.

At first, Russia appeared to have avoided the worst effects of the virus. In late March, Russian authorities claimed that of the more than 130,000 individuals who had been tested, only a few hundred had been found to be infected with the virus. This ratio of positive cases to tests raised the eyebrows of health care experts. Furthermore, cases of pneumonia, a common secondary infection in COVID-19 patients, spiked in Russia in the early part of this year, raising the possibility that many people were misdiagnosed. As of mid-May, there are more than 230,000 reported cases of COVID-19 in Russia. The virus has infected even those close to Putin, as his spokesperson, Dmitry Peskov, was hospitalized in May.

Russian authorities initially tried to contain the virus by closing Russia’s border with China and monitoring Chinese nationals for possible infection. Policies instituted by Moscow’s mayor that targeted Chinese residents of the city earned a rebuke from the Chinese Embassy. In late March, Moscow enacted a citywide quarantine, Russia’s borders were closed, and public gatherings such as sporting events and VE day canceled or scaled down. In mid-May, despite surging cases, Putin announced a gradual easing of lockdown measures.

The situation adds to Putin’s domestic challenges. Since Russia’s invasion of Ukraine in 2014, living standards in Russia have declined and trust in Putin has fallen from 59 percent in November 2017 to 35 percent in January 2020. In addition, Russia’s currency suffered due to an oil price war with Saudi Arabia that was eventually resolved in April.

Despite his weakened political position, Putin announced earlier this year a plan to change the constitution to extend his tenure as Russia’s leader. But the virus has forced him to delay this plan, and he pushed back the scheduled April 22 referendum on constitutional changes.

Even while facing internal challenges, Russia has tried to use the crisis to its advantage abroad. It won an optics victory when it delivered medical supplies to the United States. Russia also sent medical supplies to Italy, 80 percent of which were reportedly useless.

Russia has also conducted a disinformation campaign, with propaganda outlets suggesting the coronavirus originated in Latvia or as biological weapon in the United States. An EU report claimed Russia is trying to worsen the virus’s impact on the West and sow distrust.

More consequentially, US and European military preparedness in Northern and Eastern Europe has taken a hit. On March 18, Norway, the United States, and other European allies called off the joint exercise Cold Response 2020, which involves practicing a defense of northern and central Norway. The Defender-Europe 2020 exercise, which planned for 40,000 soldiers practicing rapid deployment to, and advancement through, Europe was also halted. On March 25, NATO announced twenty troops in its multinational battalion in Lithuania had tested positive for COVID-19. The unit, part of NATO’s forward defense against Russia, has reduced its activities. On that same day, the US Department of Defense issued a stop-movement order for military personnel and exercises for two months. While the risk of military conflict remains low as Russia also suffers from the effects of the virus, NATO’s weakened state raises the possibility that Russia could see the current situation as an opportunity for a hostile act.

Major uncertainties ahead:

Will the virus overwhelm Russia’s health care system and weaken an economy already struggling with sanctions and corruption?
Will the pandemic accelerate Russia’s decline as a great power with the ability to disrupt the global order? If so, would Russia become more aggressive amid decline? Would accelerated decline lead Russia to turn to the West or become closer to China given their shared threat perceptions and authoritarian ideals?
Will Putin survive the pandemic? Or will his political position, already weakened, become untenable?
Will Russia’s disinformation campaign further encourage populism and distrust of authorities in Europe?
Will Russia see NATO’s weakened military readiness as an opportunity for aggression in its near abroad?

Transatlantic Relationship Weakens, While China’s Influence Creeps Into EU

While military readiness among the United States and its European allies vis-à-vis Russia has weakened, so has the transatlantic relationship, more broadly. When Trump announced travel restrictions on Europeans visiting the United States in mid-March, he also criticized the EU, saying it “failed to take the same precautions” as the United States to contain the virus. Trump’s announcement surprised the United States’ European allies who were upset the president did not coordinate with them before announcing the restrictions. US allies have also complained about the United States’ tactics to obtain medical supplies, which include paying far above market price and blocking shipments to buyers who have already signed purchase agreements. In late March, foreign ministers from the G7 countries (which include France, Germany, Italy, and the United Kingdom) could not agree on a joint statement on the pandemic after Pompeo insisted on using the term “Wuhan virus.”

The EU is also wrestling with internal divisions driven by the virus. European solidarity has been slow to develop, with borders closed and, at least during the early stages of the virus’s spread to Europe, countries left to fend for themselves. Italy, which is participating in the BRI, has received assistance from China during the pandemic. One survey showed only a fifth of Italians think EU membership benefits Italy, while two-thirds believe membership is a disadvantage. A more recent poll found a plurality of Italians think the country should look more to China than the United States when developing alliances outside of Europe.

Vučić, Serbia’s president, has lavished praise on Xi, saying: “I believe in my friend and my brother, Xi Jinping, and I believe in Chinese help.” The EU has since provided millions of euros in aid to Serbia, but the country’s orientation toward China could make its accession to the EU more difficult.

Meanwhile, Hungary’s Parliament granted broad power to Prime Minister Viktor Orbán. Parliament approved by a two-thirds majority on March 30 a bill that gives Orbán the power to rule by decree. These new powers have no end date, and there can be no elections while the law is in effect. Former Italian Prime Minister Matteo Renzi called for Hungary’s removal from the EU on the grounds that the legislation marks a move toward authoritarianism.

On a more positive note, the EU has begun to put together a broad response to the economic damage already being wrought by the virus. On March 18, the European Central Bank (ECB) said it would buy €750 million worth of EU corporate and government bonds. The ECB’s policies will help governments such as those in Italy and Spain, which have been hit especially hard by the pandemic, support struggling businesses and the unemployed.

In early April, EU finance ministers agreed on an economic support package after overcoming disputes between the Netherlands and Southern European nations about access to credit. Countries will be able to access the credit lines of the European Stability Mechanism, also known as the EU’s bailout fund, as long as spending directly responds to the pandemic. But in late April, EU leaders failed to agree on a broader, long-term economic recovery program.

Major uncertainties ahead:

Will the United States and its European partners come together to revitalize the rules-based order and orchestrate a coordinated, global response to the pandemic? Or will cooperation be limited, deepening tensions in the transatlantic relationship that have grown in recent years?
Will the EU be able to stave off an economic crisis as severe as a decade ago? If the economic situation does worsen significantly, will it be able to recover quickly? Or could an extended economic calamity lead to a fracturing of the EU?
Will China’s rising influence in Europe sow skepticism of the EU and divide the Continent? Will the current crisis drive some European countries closer to China for an extended period, potentially leading them to embrace things like Chinese-built 5G technology?
Does recently passed legislation in Hungary mark a move toward authoritarianism, and if so, will other countries follow? Will others call for Hungary’s expulsion from the EU?

Across the Pacific, an Opportunity in Taiwan

US allies and partners in the Indo-Pacific region have shown themselves to be quite adept at containing the spread of the virus, thereby serving as examples of successful democratic responses to the current crisis. Through quick action, testing, and contact tracing, South Korea mostly quashed the outbreak in the first half of March. Taiwan, similarly, has very effectively avoided a massive outbreak despite its proximity to China.

The Trump administration, moreover, views the pandemic and Taiwan’s successful response as an opportunity to promote Taiwan abroad. The United States is pressing for Taiwan’s inclusion in the WHO, and on March 26, Trump signed a law requiring the United States to take certain unspecified actions against countries that undermine Taiwan’s security or prosperity. In an important soft power victory for Taiwan, its president, Tsai Ing-wen, announced plans to donate ten million protective masks abroad, including seven million to Europe and two million to the United States.

Meanwhile, Japan has struggled to contain the virus. In early April, the US government expressed concern about rising cases of COVID-19 in Japan. While Japanese Prime Minister Shinzo Abe’s government had resisted sweeping measures to contain the virus, it finally declared a state of emergency on April 7. Abe requested residents of Tokyo and several other districts to stay home for one month. Japan’s government also announced a $1 trillion stimulus package to limit the economic damage caused by the virus. In early May, some parts of the country began easing restrictions.

The virus also has the potential to have a catastrophic outcome in India. As a rising democracy of comparable size to China, India is a vital partner to the United States as it seeks to counterbalance China’s influence in the Indo-Pacific region. Trump’s visit to India in February signified closer ties between the two nations.

The number of cases of COVID-19 in India is growing and now includes more than 70,000 people. Moreover, a case was discovered in the notoriously overcrowded and unsanitary Dharavi slum in Mumbai, which houses close to one million people. The virus also almost led to a rift with the United States after India said it would not allow the export of hydroxychloroquine, an antimalarial drug touted by Trump as a possible treatment for COVID-19. India eventually agreed to export the drug to “nations that have been badly affected” soon after an April 4 call between Trump and Indian Prime Minister Narendra Modi.

Major uncertainties ahead:

Will South Korea avoid the worst effects of the coronavirus-induced global economic downturn? If so, to what extent will South Korea increase its soft power and become a more crucial regional bulwark against China’s rise?
Will Taiwan greatly improve its soft power and influence abroad? To what extent will the United States’ increased support for Taiwan intensify competition with China? Will China increase its efforts to marginalize and delegitimize Taiwan?
Will Japan suffer an extended economic meltdown and health crisis as a result of its slower response to the virus? If so, how much will this weaken its position in the region?
Will India, an important global supplier of generic pharmaceuticals, continue to export these or will it decide to stockpile them? To what extent would this damage India’s relationship with the United States and its position as an up-and-coming democratic power in Asia?

WHO Faces Criticism

International institutions, such as those related to health security, are a vital part of the postwar rules-based order, but the WHO’s slow response to the pandemic and its deference to China have brought it under scrutiny. On January 22, the WHO denied it was necessary to declare a “public health emergency of international concern,” a declaration it finally made just over one week later. By that time, the outbreak had spread to more than a dozen countries and infected around 8,000 people. The organization also praised China’s leadership for being transparent, and in February a WHO report praised China’s “ambitious, agile, and aggressive disease containment effort.” The WHO finally declared COVID-19 a pandemic on March 11.

The organization was slow to respond despite the fact it had received new emergency authorities after a previous COVID-19 outbreak in China. During the 2002-03 SARS outbreak, Chinese authorities similarly suppressed information about the virus in its early stages. New regulations approved in 2005 granted the WHO more powers to respond to an outbreak before it could become a global crisis, but the organization’s leadership was reluctant to exercise them in response to COVID-19.

The WHO is also being criticized for its treatment of Taiwan. In March, a senior WHO official hung up on a reporter when asked whether the organization would give Taiwan membership, which China has blocked. After reconnecting with the reporter and being asked about Taiwan’s containment efforts, the official said all parts of China were doing well. In addition, WHO Director-General Tedros Adhanom Ghebreyesus has claimed racist slurs have been directed at him from Taiwan, an accusation Taiwanese officials reject. For its part, Taiwan has claimed the WHO has been uncooperative in giving out important health information, something the organization denies.

On April 14, Trump announced his decision to withhold US funding for the WHO, pending a review of its handling of the outbreak. In 2019, the United States gave more than $400 million to the organization, about ten times as much as China’s contribution. Trump’s aides are also reportedly considering whether the United States should try to establish an alternative institution, although taking aim at a global health organization during a pandemic has opened the United States to criticism from abroad.

Major uncertainties ahead:

Will the WHO restore its reputation and help lead a global recovery from the pandemic or will it continue to show deference toward China?
Will the WHO cooperate closely with Taiwan and will Taiwan be granted membership or at least be restored to observer status in the body? If so, will this decrease China’s cooperation on international health matters? If not, will this drive the United States toward more vociferous criticism of the organization?
Will the United States continue to withhold funds or seek to create an alternative global health institution free from China’s influence? Will such an effort be met with praise or distaste abroad given the dire global health situation?
How will the global approach to health security change in the aftermath of the pandemic? Will the WHO receive new authorities as it did after the SARS outbreak of 2002-03, or will it face a crisis of legitimacy? Will the United States push reform in the WHO?

Policy Recommendations

Despite these uncertainties, there are some obvious next steps for US and allied policy. Most importantly, the United States and its allies and partners need to develop a comprehensive joint strategy to address COVID-19 and shape the post-pandemic global order. The United States and its allies should orient their strategy toward revitalizing and adapting the rules-based order in light of the weaknesses made plain by the pandemic.

Public Health: Reduce the Threat of Coronavirus and Bolster Global Public Health Resilience

The United States should lead a “Counter-Coronavirus Coalition” made up of allies and partners to implement strong joint measures to curb the virus’s spread, as well as unleash its economic might to produce materials (e.g., masks, ventilators) necessary to ensure those afflicted with the illness receive care. Abroad, the United States needs to resist temptations of nationalism and going-it-alone: the United States should work closely with its allies and partners, supporting them with medical resources and acting as a more reliable partner than China. The United States should act as the global leader in this crisis, stemming China’s efforts to seize the crisis as an opportunity to expand its influence abroad. Once the virus has been brought under control, the key factor in gauging global leadership will not have been who was responsible for the start of the pandemic, but who finished it. The United States’ vast resources, partnerships, and capacity for innovation puts it in a prime position to take up the mantle of leadership, produce medical supplies and vaccines, and quash the pandemic.

Moreover, while the United States should be tough on the WHO for its deference to China, it should also seek to strengthen global public health institutions, erect new ones where necessary, and reassert its influence in them. Whereas China has increased its influence in international organizations such as the WHO, the United States has retreated from multilateralism in recent years. The Chinese government, despite its culpability in allowing the virus to spiral into a pandemic, is also pushing for a new multilateral public health apparatus in the form of the Health Silk Road. The United States should not cede global leadership in refashioning and constructing multilateral institutions. In leading a global response to the pandemic, it should also lead the revitalization of international health institutions to ensure they have the capacity to address outbreaks, facilitate cooperation, and avoid the baser influences of authoritarian states. In the end, transparency is a major attribute in stemming fast-breaking global health crises, and democratic countries led by the United States, therefore, have an advantage over authoritarians who suppress and destroy important health data.

Economics: Facilitate a Global Economic Recovery

The virus will likely cause a global recession and possibly a depression. Protectionism will prove tempting, especially as populists in the West use the pandemic to attack globalism as fragile and dangerous. But this temptation should be rebuffed—protectionism failed to stem the Great Depression in the 1930s and only worsened an inward, nationalistic turn among global powers that fed into World War II. Instead, the United States and its partners should immediately work together to rebuild the global economy. China will look for Western divisions and lasting economic weakness as an opportunity to carve out a larger role for itself in the global order; however, resolute actions by the United States and its partners will both facilitate a quicker economic recovery and place them in a stronger position to approach China on shaping the post-pandemic global economy. The United States’ $2 trillion stimulus is a positive step in the direction of economic recovery, as are the recent steps taken by the EU. Furthermore, the Federal Reserve is working in conjunction with other nations’ central banks to ease the pressure on the global economy. Moreover, whereas China has limited experience with booms and busts due to an extended period of economic growth, the United States and its partners are used to market cycles, and this should give them added resilience to the current shock.

Diplomacy: Strengthen Alliances

The United States should reach out to its allies to strengthen coordination for a global response to the pandemic. When working together, the United States and its allies can amass an impressive degree of economic, diplomatic, and military clout, as well as scientific knowledge, all of which is integral to a comprehensive response to the pandemic. Where relationships have been frayed in previous months, the United States should work to repair them and be willing to take the lead of a coalition of states dedicated to countering the coronavirus. To revitalize the rules-based order requires determined US and allied leadership, and a willingness to forge new institutions to address the challenges of the post-pandemic world, as when the G20 was elevated in importance during the 2008 financial crisis.

National Security and Defense: Reorder National Security Priorities and Deter Chinese and Russian Aggression

The United States and its allies must lead the reordering of national security priorities in the post-pandemic era as well as demonstrate the resolve to defend the rules-based order against aggressive acts on the part of China and Russia. Western publics are rightly going to demand that the concept of national security be broadened to include security against pandemics. How this new concept is integrated into US national security as well as US alliances and security partnerships should be a top priority for planners during the rest of 2020. This must be done in a way that effectively balances pandemic prevention and mitigation with other national security threats and challenges.

Moreover, revisionist powers have already launched disinformation campaigns to muddy the origins of the virus and sow confusion in the West. The United States and its allies should take steps to ensure this disinformation is countered and that democratic systems of government can withstand its effects. While the United States’ and its allies’ military readiness has been weakened by the virus, they are still able to exercise a great degree of military power. High-level statements and shows of force can be used by US and allied forces to demonstrate their commitment to deterring and defeating aggression.

Conclusion

In just a few months, the COVID-19 pandemic has upended global health security, sent the world economy into a tailspin, and intensified great-power rivalry. Precisely how long it will take for governments to contain the virus and for scientists to develop effective therapies and a vaccine remains unclear. This analysis of the coronavirus’s impact on the global order has shown there are many geopolitical uncertainties that should be monitored in the coming months. The next paper in this series on shaping the post-pandemic world, an Atlantic Council Strategy Paper, will consider how these uncertainties might be resolved and what the world could look like in the coming months and years.

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