Executive Summary
This academic paper models a 'Cold War 2.0' scenario where NATO and its partners completely sever trade with China, Russia, Iran, and North Korea (CRINK). The analysis quantifies the severe economic impacts on European allies, particularly on the defense industrial base, which relies heavily on Chinese raw materials. It argues that even a less-kinetic conflict involving geo-economic fragmentation would significantly degrade Europe's defense readiness, especially if the U.S. redeploys assets to the Indo-Pacific, highlighting the need for strategic de-risking.
Why It Matters
This document is crucial for defense analysts as it models the economic and security implications of a new Cold War scenario, highlighting the vulnerabilities of European allies to geo-economic fragmentation and the need for enhanced defense readiness against a coordinated threat.
Key Takeaways
- A "Cold War 2.0" with CRINK, even if low-intensity, poses significant challenges to European security and defense preparedness.
- Geo-economic fragmentation, including trade cessation and a Taiwan blockade, would severely impact European allies' ability to protect their citizens and territory.
- European allies must proactively de-risk trade trajectories and enhance defense integration to avoid costly reactive measures triggered by strategic challengers.
- The current geopolitical landscape, marked by a resurgent Russia and a shifting US global posture, necessitates urgent European strategic autonomy and increased defense spending.
Strategic Relevance
This article provides a strategic framework for understanding the economic and security implications of a potential 'Cold War 2.0' with a coalition of revisionist powers. It underscores the critical need for European defense readiness, strategic autonomy, and economic resilience in the face of coordinated threats and shifting alliances, offering a quantitative basis for policy decisions.