Beijing says artificial intelligence will give the state a visible hand to allocate capital. Here’s the rub: Washington’s economic authority sits in five places, and none of them is in command.

This column begins a four-week series ahead of The Cipher Brief Threat Conference on economic-warfare. The author is hosting a live session on this topic with former Commander of U.S. Special Operations Command, General Bryan Fenton (Ret.). Apply now to attend.

On September 26, the President answered the week's largest security question in just four words: "I'm rejecting their deal." Iran's offer to reopen the Strait of Hormuz within seven days, in exchange for lifting the blockade and waiving oil sanctions, had been on the table since September 24. It received its answer in public, from the one official authorized to give it, inside forty-eight hours.

The week's economic questions received no answer of that kind. The trade truce with China, and the pause on Beijing's rare-earth licensing regime tied to it, moved from November 10 to January 10 on the strength of a Treasury Secretary's statement; Beijing has yet to publish a matching notice.

The Russia sanctions act the President signed on September 18 requires determinations on the largest buyers of Russian energy by October 18, a deadline set by Congress rather than the executive, with waivers broad enough to let it pass unenforced. In February, the Supreme Court ruled six to three in Learning Resources v. Trump that the International Emergency Economic Powers Act does not authorize tariffs, removing the instrument the executive had used for its broadest tariffs.

This is important because Washington can decide a war in a sentence. But on the economic front, authority rests with Treasury, Commerce, the U.S. Trade Representative, Congress, and the courts. Each is competent. None is in command. The arrangement is by design and has served the country well for most of the last eighty years. But not anymore.

Beijing is now claiming a different design. In a recent lecture on Xi Jinping's economic strategy, former Australian Prime Minister Kevin Rudd, who has tracked Chinese ideology for fifty years, described a shift in the Communist Party's theoretical literature. Artificial intelligence (AI) and other "new quality productive forces" are portrayed not only as sources of productivity but also as "a superior macro-allocation mechanism for resources," driven by algorithms. Rudd says the literature now uses the term "the visible hand of the state," offered for the first time as a rival to the market's invisible one. He is careful about its status: the idea sits in the ideological literature, "not yet in the policy literature," and not yet in the behavior of firms. But in his reading, ideology in China is where policy begins.

The hand is already visible without the algorithm. The rare-earth regime now paused until January, the Ministry of Commerce's Announcement No. 61, applies to any product anywhere that carries more than 0.1 percent Chinese-origin rare-earth content by value. One ministry notice imposed it; one more can reimpose it. The capital moves the same way. Chinese households, burned by property and wary of equities, hold record savings in low-yield bank deposits, and the state draws on those deposits through local, provincial, and national loan instruments to fund its technology bet. Rhodium Group puts China's AI capital spending at 932 billion renminbi this year, double last year's, financed by state banks and equity placements rather than bond markets.

America's AI buildout is financed the other way. Its five largest builders raised a net $163 billion in debt in the first half of this year, compared with $90 billion in all of 2025, in a bond market where the ten-year Treasury has reached 5.18 percent, its highest since 2007. No ministry allocated that capital. The market did, and the market will reprice it.

Neither design is simply superior, and the distinction matters more than the verdict. A single allocator is fast and brittle. It can direct capital, licenses, and supply to a strategic target within a week, and it can misallocate at the same speed. The household savings now financing the AI bet were poured into a property boom that left many of those households with assets worth only a fraction of what they paid. A distributed system is slow and resilient. Its errors stay local, its capital carries a price, and no single notice can switch it off. In peacetime competition, resilience compounds. In economic warfare, tempo is the contested variable, and the side that can decide within the other's cycle sets the terms. Beijing has already shown what that looks like. It imposed its rare-earth regime by notice on October 9 of last year and suspended it by another on November 7, having collected in between Washington's agreement to delay its own rule extending export controls to the affiliates of blacklisted firms. Two notices, one month, one American concession.

This column has traced the same gap from the drone fleet to the power grid: the capacity exists, and the decision does not. The economic front shows it at national scale. Washington holds the reserve currency, the deepest capital markets, and the reach of the dollar system. What it lacks is a place to settle competing claims on those instruments and to make them binding on the timeline decided by an adversary.

October 18 is the first live test. The sanctions act's determinations are due that day, just sixteen days before the midterm elections. They will be imposed, waived, or deferred, and whichever it is will say more about the American economic hand than any strategy document published this year. Beijing will be watching the same date, holding a notice it can publish on any morning it chooses.

The question for Washington is who, when economic warfare requires a decision, is empowered to make it, and whether that decision can arrive before the adversary's action. Coordination assigns. Integration arbitrates.

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Allied navies are still counting hulls. The contest at sea is now about who sees, decides, and acts first.

Earlier this month, Western officials disclosed that American, British, and Norwegian forces had tracked and confronted Russian deep-sea units near Svalbard this spring as they rehearsed a method for disabling undersea cables. The Russian vessels were stopped before they finished the sabotage and left the area. The confrontation matters less than how it was won. The Allies saw the activity in time to act.

That is the right lens for NATO's maritime future.

For four centuries, the sea hid things. Distance, weather, and the Earth's curvature made finding a fleet harder than fighting one. Navies were built accordingly. They concentrated their combat power on a small number of survivable platforms and used the ocean's opacity to arrive where the enemy was not.

That premise is failing.

Commercial satellite imagery now refreshes at rates that were classified a decade ago. Radio-frequency geolocation, synthetic aperture radar, and machine-assisted pattern analysis have turned surface tracking into a subscription service. A warship radiating in the Eastern Mediterranean is a known quantity to anyone willing to pay for the data, and increasingly to anyone willing to scrape it for a fee.

Detection has always been the hard half of the kill chain. Once it becomes cheap, the economics of naval warfare is inverted. A ship that can be found continuously must survive continuously, against munitions that cost a small fraction of its value. That is NATO's real maritime problem, and procurement alone will not solve it. The Alliance cannot out-build its way to advantage at sea, because the thing being contested is no longer mass. It is decision speed.

Each of NATO's maritime theaters is a variation on that single condition, and each demands a different answer.

The High North: The Last Opaque Water

The waters from the Bear Gap to the Greenland-Iceland-United Kingdom Gap remain the transatlantic hinge. Reinforcements to Europe still move by sea. Whatever the state of Russian industry, the Northern Fleet's submarine force remains the most credible threat to those sea lines.

It is also the one theater where transparency does not yet hold. The undersea domain is still opaque, which is precisely why Russia invests there. Submarines and seabed activity are the remaining sanctuary in an otherwise observable world. Moscow's sustained attention to cables and energy infrastructure, now including the rehearsal near Svalbard, suggests it understands the asymmetry well.

NATO's task in the north is therefore not defensive patrol. It is extending transparency into the last place that lacks it. That means persistent autonomous pickets and fixed and deployable seabed sensors. It means uncrewed underwater vehicles operating on timescales no crewed platform can sustain, and a processing architecture that fuses it all.

Success should be measured by time to detection and time to cue, not by the number of frigates on the plot. Frigates that NATO cannot crew and cannot protect neither improve either condition.

The Baltic: Where Geography Argues Back

The Baltic is different. It is shallow, narrow, and cluttered with islands and commercial traffic, and that environment degrades the sensing advantage transparency depends on. Bottom clutter defeats sonar. Littoral noise defeats classification. Mines remain cheap, legal, deniable, and effective. Whoever occupies the ground beside them can hold or lose the chokepoints that matter.

Sensors do not clear a minefield, and autonomy does not hold an island. Marines, mine countermeasures forces, and special operations teams remain vital in the Baltic in a way they are not in the Norwegian Sea.

The Baltic incidents of recent years, including repeated damage to cables and power interconnectors, were not failures of firepower. They were failures of attribution. The Alliance was too slow to see, too slow to characterize, and too slow to connect a dragged anchor to a named ship.

The Baltic needs a sensing web that knows what happened while it is still happening, and forces postured to contest key terrain when it does. Transparency buys nothing if nothing is ready to act on it.

The Black Sea: The Demonstration Already Happened

Everywhere else, this argument is a forecast. In the Black Sea, it is a finding.

Ukraine, with no meaningful surface fleet, forced Russia to move much of its Black Sea Fleet away from Sevastopol. It did so with shore-based missiles, uncrewed surface vessels, and targeting drawn from allied and commercial sources. Whatever else that campaign proved, it showed that persistent surveillance plus cheap effectors can deny sea control to a navy that normally holds it.

The post-war theater will be shaped by that memory on both sides, and access will remain constrained. The Montreux Convention caps the aggregate tonnage that non-Black Sea powers may keep in the sea and limits their warships' stays to 21 days. Separately, Türkiye has barred belligerent warships from the straits under Article 19 since February 2022, subject to the convention's exception for vessels returning to their home bases. These are distinct levers, and NATO's re-entry planning depends on which one relaxes, and when. Neither is NATO's decision.

The Black Sea will therefore be secured, if it is secured, by its littoral allies. Türkiye, Romania, and Bulgaria will need to operate as a single sensor-shooter architecture. Other allies should contribute data, munitions, uncrewed systems, and shore-based fires rather than visiting hulls. The theater will not become permissive. The realistic objective is to make it transparent and ensure NATO is the party that sees first.

The Mediterranean: Transparent but Crowded

The Mediterranean presents the opposite problem from the High North. It may already be the most transparent sea NATO operates in. It is ringed by allied coastlines, saturated with commercial traffic, and covered by dense sensor networks. Finding ships there is not hard. Making sense of them is.

The strategic picture has also shifted. The fall of the Assad regime has left Russia's naval foothold at Tartus in doubt and its Mediterranean presence diminished. That eases one long-standing challenge without lightening NATO's load. The remaining threats are harder to categorize. They include shadow-fleet tankers of uncertain ownership, activity near undersea cables and pipelines, uncrewed systems in the hands of state and non-state actors, and southern-flank instability that spills into the maritime domain.

In a sea this crowded, the limiting factor is not detection but discrimination. The task is to separate the one vessel that matters from the thousands that do not, fast enough to act. The Mediterranean is where NATO should prove it can turn an overwhelming volume of maritime data into timely decisions. If the Alliance cannot do that in its most observable waters, it will not do it anywhere else.

Measuring the Right Thing

The Svalbard episode is a preview of the maritime contest to come. As satellites, distributed sensors, and AI-enabled analysis make the surface ever more visible, advantage will belong to whoever can see beneath it, make sense of what it sees, and act before the other side does.

That requires NATO to change what it counts. Hulls and tonnage remain necessary, but they are no longer sufficient measures of naval power. The metrics that matter now are time to detect, time to attribute, and time to act, in every theater from the Arctic to the Levant.

An Alliance that measures itself that way will hold the maritime advantage. One that keeps counting ships risks investing in fleets built for a world that no longer exists.

This piece was originally published by Matthew Van Wagenen

“During its 11-month deployment [mostly in the Middle East] which ended in May, and was the longest for an [aircraft] carrier since the Vietnam War, the USS Gerald R. Ford conducted more than 11,000 aircraft carrier launches using electromagnetic catapults, more than carriers with steam [aircraft launching] systems could achieve…But perhaps the biggest benefit of the electromagnetic catapults are their lower cost and lighter personnel requirements. With the Navy running out of operating funds, and retention likely to plummet in the aftermath of the war with Iran, the fleet needs to make the most of every dollar and sailor.”

Writing that opinion piece in The Washington Post last Wednesday was Bryan Clark, a former Navy officer who at one time served as Special Assistant to the Chief of Naval Operations and Director of his Commander’s Action Group. Currently, Clark is a Senior Fellow and Director of the Center for Defense Concepts and Technology at the Hudson Institute.

I am using Clark’s article because it provides information that challenges a recent military step contained in an August 13, Presidential Memorandum which ordered “the Secretary of War, in consultation with the Secretary of the Navy, shall provide to the President… a plan on the required measures to replace the Electromagnetic Aircraft Launch System and Advanced Weapons Elevators with steam and hydraulic systems for the construction of [aircraft carrier] CVN-81[USS Doris Miller], including timelines and resourcing requirements.”

Electromagnetic catapult systems accelerate aircraft more smoothly and gradually, thus putting less stress on airframes. They also recharge faster than steam catapults which need to pressurize gases and they eliminate the need for boilers and other plumbing equipment needed to create steam.

Trump, who never served in the military, has been obsessed for years with the way that steam propels fighter jets off the decks of carriers and where a carrier’s tower structure or “island” is located.

I will point out, according to former Defense Department officials the Navy designers moved the island from the middle of the carriers to the back of the vessel to make more space for moving jet fighter aircraft around on the flight deck, in order to increase the number of flights or “sorties” that the carrier could generate.

These Trump aircraft carrier views apparently first came to him less than two months after he took office based on a March 2, 2017, tour he had on the then-under-construction USS Gerald Ford being built at the Newport News shipyard in Virginia.

Two months later, in a May 8, 2017 wide-ranging, 100-minute interview with Time Magazine editors and reporters, Trump at one point apparently brought up his visit to the Gerald Ford at Newport News where he was shown the catapult system for launching aircraft from the deck.

According to TIME, the conversation went, “Sir, this is our digital catapult system…we’re going to this because we wanted to keep up with modern [technology]. I [Trump] said, ‘You don’t use steam anymore for catapult? No sir. I [Trump] said, Ah, how is it working? Sir, not good. Not good. Doesn’t have the power. You know the steam is just brutal. You see that sucker going and steam’s going all over the place, there’s planes thrown in the air.’”

The TIME transcript then has Trump saying, “It sounded bad to me. Digital. They have digital. What is digital? And it’s very complicated, you have to be Albert Einstein to figure it out. And I [Trump] said -- and now they want to buy more aircraft carriers. I [Trump] said what system are you going to buy -- Sir, we’re staying with digital. I [Trump] said no you’re not. You going to goddamned steam, the digital costs hundreds of millions of dollars more money and it’s no good.”

I should note, at the time Trump visited and for months thereafter, there were issues with the new electromagnetic catapults, but fixes were made, although not in Trump’s mind.

Before I continue with Trump, let’s turn back to Hudson’s Bryan Clark, a real Navy expert, who wrote, “The biggest benefit of the electromagnetic catapults are their lower cost and lighter personnel requirements.”

Clark also noted, “The Ford’s crew is about 500 sailors smaller than its predecessors, largely because it is an all-electric ship outside of the engine room. Because they needed steam for catapults, older carriers also used steam for a variety of other functions throughout the ship — such as cooking equipment and water purification…And the steam catapults have so many moving parts and failure modes that they require about 10 more sailors per catapult — there are four catapults on a modern carrier — than electromagnetic systems.”

A Navy February press release said preliminary reports from the Sortie Generation Rate test program for aircraft show that the flight deck design in conjunction with electromagnetic systems and arresting gear “have contributed to an increased sortie generation rate compared to that of a Nimitz-class carrier.”

However, Trump over the years has kept calling for a return to steam catapults and retelling the story of his 2017 visit to the Gerald Ford.

For example, at a November 2, 2023 campaign rally in Houston, Texas, Trump was talking about shipbuilding and veered off to tell about a ship that was “in trouble” because “it was $10 billion over budget, and I wanted to go and see this ship that was costing so much money.”

At that Houston rally, Trump went on, “And I landed with a helicopter on top of this massive, incredible ship [USS Gerald Ford] being made in Newport News. And I said to the people…I want to meet the catapult people, the people that have done the catapulting.”

Trump continued, “I want to find out what the hell happened because the catapults weren't working. So for 50 years, we used steam more. And that beautiful scene, that steam goes off, and that plane gets thrown the hell off, the power, beautiful, and it's cheap.”

Trump said he asked a sailor “Which is better, steam or electric? ‘Steam, sir.’ I [Trump] said why did they design electric? ‘Because it can keep going like this all day long, but it takes us 59 seconds to reload a plane. And when we reload the plane, the steam builds up, and it's all set, sir. It's perfect. It works so well. And we can fix it with a blowtorch if something happens. And if a wave hits it, it actually cools us down, sir. We love the waves hitting us. If a wave hits the electric [catapult], we're out of business, sir. We might -- we'll die with this thing.’"

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Last July 15, at the U.S. Army War College in Carlisle, Penn., Trump again was talking about shipbuilding and switched saying, “I went to the ship [USS Gerald Ford], because I came into office and the ship was way over budget, built in Newport News, unfortunately, was way over budget.”

Trump went on, “I said, I want to meet the ‘catapultier’ and a man came over, along with four of his assistants. And I said, what's better, electric catapult or steam? He's been there for 25 years. He said, ‘Steam is better, sir. We can fix it with a hammer and a blowtorch. When the electric [catapult] goes bad, I have to send to MIT to get geniuses over here’…But I [Trump] said, so you're saying we spend billions of dollars extra to build electric catapults instead of using steam.”

Bryan Clark concluded his Post article saying, “Steam power was cutting-edge technology in the 19th century. It is the wrong choice for a Pentagon that is leaning into artificial intelligence and autonomous systems. The Navy should stay the course with electromagnetic catapults to keep the carrier fleet strong and deliver more firepower. It could use the savings to help refill the fleet’s weapons magazines.”

Clark told CNN the cost of changing catapults on the USS Doris Miller, already under construction, “will probably be into the billions” and it could delay the carrier — which was expected to be in service around 2034 — “until the end of the next decade.”

Clark also Clark said, “Nobody builds them anymore. There’s no steam catapult manufacturers in the…U.S. anymore so they’d have to restart that production line, which would cost tens of millions of dollars to get going and that’ll be, it’ll take years to start that up again and build the first catapult.”

To add insult to injury, various recent news reports have said Navy senior staffers are reviewing the name USS Doris Miller for CV-81.

Named on January 20, 2020 -- during the Trump first administration -- by then-Acting Navy Secretary Thomas B. Modly during a Martin Luther King, Jr. Day ceremony, it honors African-American Mess Attendant Third Class Doris “Dorie” Miller, who received the Navy Cross for extraordinary heroism during the attack on Pearl Harbor on December 7, 1941, where he manned an anti-aircraft machine gun without prior training and aided wounded crewmates.

In giving the new aircraft carrier Miller’s name, acting-Navy Secretary Modly said, “In selecting this name, we honor the contributions of all our enlisted ranks, past and present, men and women, of every race, religion and background.”

One name said to be under study to replace Miller’s is that of President Trump.