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An $11bn signal to Beijing

On 18 December 2025 the U.S. State Department cleared a sweeping set of potential arms sales to Taiwan, a package valued at roughly $11.1 billion. The notifications, sent to Congress under the Foreign Military Sales process, cover eight separate cases and lean toward mobile firepower, air-defense munitions, and loitering drones. The timing is deliberate. Chinese military pressure around Taiwan has intensified, and Washington is trying to strengthen Taipei’s ability to make any assault costly and uncertain.

Two big-ticket items dominate. The largest line is the High Mobility Artillery Rocket System (HIMARS), estimated at $4.05 billion, followed closely by M109A7 self-propelled howitzers at $4.03 billion.

Another $1.10 billion is set aside for Altius autonomous air vehicles, a family of loitering munitions, alongside $1.01 billion for tactical mission network software meant to link sensors and shooters.

The remainder is missiles and sustainment: Javelin missiles ($375 million), TOW 2B missiles ($353 million), AH-1W helicopter parts ($96 million), and Harpoon refurbishment ($91 million), bringing the total to about $11.105 billion.

For Taiwan, the mix fits the logic of “porcupine” defense: dispersed launchers, ample munitions, and systems that complicate an amphibious campaign rather than chasing parity platform by platform.

It’s another reminder to Beijing that Washington’s one-China policy sits alongside a readiness to arm Taiwan, a combination China routinely condemns as destabilizing. The next step is procedural. The sales must still clear the congressional review period and then move into contracting and production. But it’s a clear signal of the administration’s intent to prevent a military takeover of Taiwan.

It’s the U.S. vs China, everyone else needs to choose a side

Germany accelerates its rearmament spending

Germany’s Bundestag budget committee has signed off on more than €50 billion [$58.6 billion] in defense procurement contracts, a burst of approvals that Berlin is presenting as the largest single tranche of military investment in its modern history. In practice, this is the gatekeeping step for big purchases.

The package covers a broad mix of equipment and support, from uniforms and personal gear to armored vehicles and tanks, as well as drones and satellites.

Defense Minister Boris Pistorius presented the decision as bringing parliament into line with the government’s push to accelerate rearmament in response to the war in Ukraine and a harsher European security environment. The headline figure is large, but much of the spending will be spread over several years as contracts are executed, production capacity is secured, and deliveries ramp up.

Strategically, the vote is another marker of Germany’s post-2022 Zeitenwende, a shift from incremental modernization toward industrial-scale ordering, with the aim of rebuilding readiness fast enough to matter for NATO planning.

A claims commission for Ukraine

European Union High Representative for Foreign Affairs and Security Policy Kaja Kallas said on Tuesday in The Hague that Russia “will not escape the bill” for the destruction inflicted on Ukraine, as European governments moved to establish an International Claims Commission for Ukraine.

The body is intended to convert documented losses into formal decisions on what is owed in individual cases, drawing on the Register of Damage for Ukraine, a Council of Europe-backed platform created in 2023 to collect and record claims. More than 86,000 submissions have already been registered, a measure of both the scale of the damage and the demand for a rules-based route to compensation.

The European Union plans to support the commission’s work, including an initial contribution of €1 million [$1.17 million]. The commission will be hosted in the Netherlands and is expected to begin operating once enough countries ratify the convention and funding is secured.

For now, it is best seen as legal infrastructure rather than a payout mechanism: it can validate claims and set amounts, but turning those decisions into payments will depend on political choices about enforcement and, potentially, the use of immobilized Russian assets.

The new Monroe Doctrine era & the Trump Corollary

Congress leaves Trump freer to pressure Venezuela

The margin was small, but the implications are not. On 17 December 2025 the Republican-led House rejected a War Powers resolution that would have required President Donald Trump to withdraw U.S. forces from “hostilities in or against Venezuela” unless Congress explicitly authorized the operation.

Taken together, the results amount to a political green light for the administration’s current posture, including strikes at sea against alleged drug-trafficking vessels and fewer near-term constraints on escalation against Venezuela.

The votes landed amid a widening confrontation in the Caribbean. President Donald Trump has publicly threatened a “blockade” focused on sanctioned oil tankers moving into and out of Venezuela. The War Powers effort was, in effect, Congress trying to impose a clearer legal threshold before interdictions slide into sustained hostilities.

Democrats argued that the campaign risks turning into an unauthorized war, while Republicans largely defended it as a counter-narcotics and counter-terrorism effort. The practical consequence of the resolutions’ failure is not a sudden expansion of statutory authority, but the absence of an immediate congressional directive to stop, which leaves the administration with a smoother legal and political runway.

Venezuela’s response has been to raise the risk of friction at sea. In the hours after Trump’s blockade threat, ship-tracking data cited in reporting suggested that the Venezuelan Navy escorted several tankers departing from Puerto José between Tuesday evening and Wednesday morning, carrying petroleum products, although it was unclear whether those vessels were subject to U.S. sanctions. The media separately reported that two unsanctioned ships sailed on Wednesday carrying oil byproducts, methanol and petroleum coke, and noted that enforcement details remain murky, including whether Washington would rely on the U.S. Coast Guard for interdictions. Venezuelan officials and PDVSA have said shipments are continuing “with full security”, while U.S. officials have said they are monitoring the escorts and considering options.

The escalation ladder now runs through the waterline. A naval blockade is widely treated as an act of war in international practice, and even a “sanctions blockade” can blur into coercive military action if interdictions involve force or disputed lists of sanctioned vessels.

With the House declining to pull the brake, the next test will be operational: how aggressively the U.S. tries to stop or seize ships, how seriously Venezuela escorts them, and whether either side miscalculates in the close quarters of the southern Caribbean.

Move fast and break things

A subsidy cliff looms for Obamacare

Congress has stumbled into a late-year standoff over whether to extend the enhanced Affordable Care Act (“Obamacare”) premium subsidies, which are set to expire on 31 December 2025.

On 17 December 2025 House Republicans narrowly blocked a fast-track vote on a three-year extension, with a procedural motion failing 204–203, and then passed their own health package, H.R. 6703, the “Lower Health Care Premiums for All Americans Act”, by 216–211, without renewing the extra assistance.

Democrats, backed by four centrist Republicans, countered by pushing a discharge petition to 218 signatures, a step that would force a House floor vote when lawmakers return, which House Speaker Mike Johnson said would come in the first week of January.

The Senate has already signaled how steep the path remains: the Democratic extension effort fell short of the 60-vote threshold last week (reported as 51–48), leaving the subsidies in limbo and the deadline uncomfortably close unless leaders strike a deal quickly.

A nuclear carve-out in Russia sanctions

President Donald Trump’s administration has created a narrow sanctions carve-out to keep certain cross-border payments flowing for pre-existing civilian nuclear projects that depend, directly or indirectly, on Russia’s financial system.

In a 17 December notice, the Treasury Department’s Office of Foreign Assets Control issued Russia-related General License 115C. It authorizes, until 12:01 a.m. EDT on 18 June 2026, transactions that would otherwise be prohibited under Executive Order 14024 when they involve a list of major Russian financial institutions, provided the activity is “solely to maintain or support” civil nuclear projects that were initiated before 21 November 2024.

The list is expansive by sanctions standards. It includes Gazprombank, Vnesheconombank, Otkritie, Sovcombank, Sberbank, VTB, Alfa-Bank, Rosbank, Bank Zenit, Bank Saint-Petersburg, the National Clearing Center, majority-owned subsidiaries, and even the Central Bank of the Russian Federation.

The practical effect is not to remove sanctions from these entities, but to permit a defined set of nuclear-related transactions that may be necessary for fuel, servicing, safety work, and related contracting in third countries. OFAC also spells out what the license does not allow: it does not authorize the opening or maintenance of correspondent or payable-through accounts for entities covered by Directive 2, and it does not permit debits to certain Russian sovereign accounts held at U.S. financial institutions.

The logic is risk management. Western governments want to punish Russia while limiting disruption to civilian nuclear operations abroad where Russian firms, fuel, or financing remain embedded.

General License 115C extends and updates an earlier authorization (it supersedes General License 115B), a sign that Treasury expects these nuclear-related dependencies to persist well into 2026.

Dan Newhouse heads for the exit

Representative Dan Newhouse, a Republican from Washington’s 4th congressional district, said on 17 December that he will not seek re-election in 2026 and will leave Congress at the end of his term. Newhouse, 70, presented the decision as voluntary, saying it came “with no reservations or remorse”, and he thanked constituents for the opportunity to serve.

His departure is notable because he is one of the few House Republicans who voted to impeach President Donald Trump in 2021. Most of the other nine either retired or were defeated after facing Trump-backed challengers, leaving Newhouse and David Valadao of California as the last two still serving.

Politically, this looks less like a Democratic pickup than an opening in a deep-red district that has been shaped by intraparty conflict since Newhouse’s impeachment vote. He survived those battles, including contests against Trump-endorsed challengers, but his retirement turns WA-04 into a wide-open Republican primary in 2026, with at least one familiar contender, Jerrod Sessler, expected to run again.

Newhouse’s announcement also adds to a broader midterm exodus: 24 House Republicans are not seeking re-election in 2026; four Republican senators not seeking re-election in 2026. Of course, this does not guarantee, at all, that Democrats will take these seats.

Birthplace of civilization

Israel’s gas bet on Egypt grows

Prime Minister Benjamin Netanyahu has approved what Israel is calling its largest natural-gas export agreement, a contract worth roughly $35 billion to supply Egypt with gas from the Leviathan offshore field. The deal, signed in August 2025 by Leviathan’s partners, Chevron, NewMed Energy, and Ratio, covers about 130 billion cubic meters of gas [about 4.6 trillion cubic feet] through 2040, or until the contract value is reached. Netanyahu said the agreement would generate 112 billion shekels [$34.7 billion] across the value chain, with about 58 billion shekels [$18 billion] accruing to Israel’s state coffers.

The economics rest on steel as much as geology. Reports suggest the project depends on expanding Leviathan’s capacity, including new wells and pipeline work, with an additional 7.5 billion cubic meters a year [about 265 billion cubic feet] targeted by 2029 and a new pipeline envisaged to move larger volumes.

For Egypt, the logic is blunt: domestic gas output has weakened since 2022 as power demand has surged, forcing Cairo to import liquefied natural gas to bridge the gap. Israeli pipeline gas has become an increasingly important stopgap, feeding Egypt’s domestic system and, when supply permits, its LNG export terminals.

Politics matter as much as the gas molecules. The export permit had been delayed by Israeli wrangling over terms and domestic pricing, a dispute that reportedly irritated Washington and even disrupted a planned visit by the U.S. energy secretary.

Netanyahu is presenting the approval as strategic statecraft, tightening energy interdependence with a key regional interlocutor and reinforcing Israel’s growing influence in the eastern Mediterranean.

Under threat worldwide

Washington freezes a British tech deal over online-safety rules

Washington has put on ice a high-profile technology investment package for Britain, citing concerns about the British government’s Online Safety Act and the broader direction of UK digital regulation. The pause looks less like a sudden loss of interest in Britain and more like leverage: a reminder that, in Washington’s view, rules designed to curb online harms can quickly function as trade barriers when they land on American firms.

The sums being discussed are also murky, with accounts mixing pounds and dollars and blurring the line between binding commitments and aspirational totals. Either way, the message is plain: across the Atlantic, regulation is increasingly treated not as a domestic footnote, but as a negotiating chip.

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