Trajectory Daily Brief: 21 January 2026

Pacific | Defence | Political will to deter China hardens while military capacity to sustain deterrence erodes

Situation

US Pacific allies are demonstrating unprecedented political resolve against China while facing critical gaps in military capacity. Public support for confrontation has consolidated across the region—70% of Australians expect a Chinese military threat, 76% of Filipinos view China as their greatest threat, and Japan has increased defense spending to 1.4% of GDP.

However, the industrial and geographic foundations of deterrence are crumbling. US factories produce artillery shells equivalent to 40 days of Ukrainian consumption rates. China’s missile arsenal can crater every runway within 500 miles of Taiwan, including Kadena Air Base, within hours of conflict.

Key weapons systems depend on Chinese-controlled supply chains for rare earth metals and components, creating a structural vulnerability where the deterrent requires adversary permission to manufacture.

Context

This represents a reversal of conventional strategic wisdom that democracies lose political will before military capacity. The gap between public resolve and material capability creates what analysts call “the strategic tragedy of the 2020s”—allies who want to deter but cannot.

The timeline mismatch is critical. China expects to achieve Taiwan invasion capability by 2027, while allied force improvements—AUKUS submarines, Japanese counterstrike missiles, expanded Philippine basing—won’t mature until the 2030s.

Historical precedent suggests that deterrence fails when adversaries perceive capability gaps despite political rhetoric. The alliance faces the same industrial mobilization challenges that plagued Western responses to earlier conflicts, but compressed into a much shorter timeframe against a peer competitor.

Trajectory

The widening gap between political will and military capacity may paradoxically increase conflict risk by encouraging Chinese miscalculation about allied resolve versus capability.

Allies face an impossible choice: accelerate military buildups that depend on Chinese supply chains, or accept a deterrence gap during the critical 2025-2030 window. Neither option resolves the fundamental contradiction.

The strategic outcome likely depends on whether China moves during the current capability window or allows time for allied industrial mobilization to close the gap.

Europe | Defence | Trump’s Greenland demand accelerates EU defense spending but exposes structural financing gaps

Situation

Trump’s renewed demand for Greenland has triggered emergency EU defense planning sessions and new spending commitments within weeks. Germany announced additional defense investments, France renewed calls for joint EU defense bonds, and the European Commission proposed retraining 600,000 workers for the defense sector by 2030.

EU defense spending hit record levels of €279 billion in 2023, projected to reach €326 billion in 2024. Eighteen NATO members now meet the 2% GDP target, up from eleven previously. The psychological impact appears significant—Denmark is a founding NATO member, making Trump’s territorial threats against an ally unprecedented.

Context

European strategic autonomy has remained largely rhetorical since 2016 despite institutional architecture like the Strategic Compass and European Defence Fund. Europe has underinvested approximately €1.8 trillion in defense over three decades while simultaneously declaring intentions for military independence.

The EU’s defense industrial base suffers from what the European Parliament calls “severe difficulties in obtaining finance”—banks won’t lend to arms manufacturers at competitive rates without government guarantees. This creates a temporal mismatch: EU budget cycles lock spending for seven years, defense procurement takes until the 2030s to produce capabilities, but Trump’s demands arrive immediately.

The Stability and Growth Pact’s deficit constraints limit sustained military spending increases, forcing defense ministries to compete with healthcare and pensions for fiscal space.

Trajectory

Acceleration in defense rhetoric and spending does not automatically translate to military capability. Europe’s defense industrial base cannot absorb rapid budget increases without years of workforce preparation and production line expansion.

The shift represents “autonomy by necessity” rather than choice—if US security guarantees appear conditional, European independence becomes existential rather than aspirational. However, structural fiscal constraints and industrial capacity limitations suggest the €1.8 trillion investment gap cannot be closed quickly regardless of political urgency.

China | Conflict | Australia’s US military facilities make neutrality impossible in war scenario

Situation

Australia hosts critical US military infrastructure that would be essential to American operations in any major Pacific conflict. These facilities include intelligence gathering stations, communications hubs, and logistical support bases that Beijing views as legitimate military targets.

The strategic value of these installations to Washington’s warfighting capability means Australia cannot remain neutral if serious US-China hostilities emerge. Beijing would likely strike Australian territory to degrade American military effectiveness.

Context

Australia’s geographic position and alliance infrastructure create an unavoidable strategic dilemma. Unlike the continental United States, which could potentially absorb significant damage while maintaining war-fighting capacity, Australia lacks the population, industrial base, and geographic depth to sustain major attacks.

This vulnerability highlights the inherent tension in alliance relationships where smaller partners provide critical capabilities but cannot match their patron’s resilience. Historical precedents from WWII demonstrate how geography and alliance commitments can force nations into conflicts regardless of their preferred neutrality.

The Pine Gap facility and other installations represent decades of defense integration that cannot be easily unwound.

Trajectory

Australia faces an increasingly binary choice as US-China tensions escalate. The alliance benefits that provide security guarantees simultaneously create existential risks that may exceed the nation’s capacity to manage.

Canberra must either accept this vulnerability as the price of alliance protection or begin distancing itself from US military operations—a move that would fundamentally reshape regional security architecture.

The mismatch between Australia’s strategic value and survivability suggests current arrangements may become unsustainable as conflict risks increase.

Read the full analysis →

Middle East | Analysis | Gulf states actively lobby Washington against Iran strikes despite hosting US military presence

Situation

Saudi Arabia, UAE, Oman, and Qatar are conducting intensive diplomacy to prevent US military action against Iran, despite decades of American security partnerships. CBS News reports these states have delivered explicit messages urging Washington to avoid strikes, citing regional security and economic vulnerabilities.

This represents a calculated departure from traditional alliance dynamics. The same Gulf monarchies that host major US military installations—including Al Udeid Air Base and Fifth Fleet headquarters—are now actively working to constrain American military options against their primary regional adversary.

Context

The Gulf states’ position reflects brutal geographic and economic realities that Washington’s Iran hawks consistently underestimate. Twenty percent of global oil flows through the 21-mile-wide Strait of Hormuz, within range of Iranian anti-ship missiles. Saudi Arabia alone exports seven million barrels daily through this chokepoint.

The 2019 Abqaiq attacks demonstrated Gulf vulnerability with devastating clarity. American-made Patriot systems failed to intercept Iranian drones and cruise missiles that halved Saudi oil production overnight. Gulf economies—dependent on expatriate workforces, desalination plants, and glass-skinned cities—would bear the costs of any US-Iran conflict while gaining virtually nothing from American victory.

Iran’s proxy network extends this vulnerability across multiple fronts, from Hezbollah in Lebanon to Houthis in Yemen, creating planning impossibilities for Gulf defense establishments.

Trajectory

Gulf states are pioneering a new model of alliance management: accepting American protection while actively constraining American action. This creates sustainable strategic ambiguity that serves both sides’ core interests.

The dynamic will likely intensify as China’s Gulf presence expands, giving Arab monarchies additional diplomatic leverage. Washington must adapt to allies who want security guarantees without security operations—or risk losing influence to powers offering protection without the complications of global power projection.

Yesterday’s Assessments

• Military capacity breaks first: Why US Pacific allies will run out of missiles before resolve
• Why Pacific deterrence is failing from both ends at once
• Australia’s alliance dilemma: What happens when the US builds alternatives to Australian bases
• Why Australia cannot stay neutral in a US-China war
• How China could neutralise US bases in Australia without firing a shot

Until tomorrow.