The Outsider Perspective Issue 481 | The Beltway Outsiders

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Good Friday Morning! And a happy trails, of sorts, to Kristi Noem this week. Depending on the outlet, she was either fired or “promoted to better things.” All things considered, it was one of the more bizarre tenures in Trump’s two terms, which is saying something.

I say that because, beyond policy, as I’ve documented in the Almanac for months now, the weird spectacle of her alleged affair with Corey Lewandowski, while testifying to Congress with her husband behind her, was unseemly in the extreme.

That said, the funniest part was Trump sending Noem to work with Marco Rubio, which means Rubio got another job. This time, he’s the caretaker of Kristi Noem. Marco Rubio’s new job memes will never get old (as a 2016 Rubio guy, I feel extremely vindicated in my read on Rubio).

This week, I’m going to do a deep dive into geopolitics and explain why the war in Iran is debilitating for China – links to follow.

Quick Hits:

John Fetterman is getting crushed by Democrats. I said above that I felt vindicated as a 2016 Rubio guy. The reverse version of this is John Fetterman. Never have I ever been more wrong about a politician than Fetterman. I went from thinking of him as a deadbeat socialist who should have dropped out over his health and family, to now considering probably the most brilliant politician for this populist moment in American politics outside of Trump. If Democrats had two brain cells to rub together, they’d throw him into the 2028 primaries. Instead, Democrats hate the guy. The Liberal Patriot had a whole piece on how Democrats are punishing him in polls and pushing for a primary. If Democrats are successful, Republicans should roll out a red carpet for him to flip parties. There would be dancing in the streets of Republican strategists everywhere. I cannot believe Democrats are this radical and dumb to make him a pariah in their own party.
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Peace Through Strength Is Worth The Price – Conservative Institute

Obama’s Iran Legacy Burns After One Morning – Conservative Institute

The Judge-Shopping Scam That Delayed Deportations for Years Is Over – Conservative Institute

America Chose Ascendance. China Wasn’t Ready.

From Tehran to Caracas to the Panama Canal, the United States is closing the doors China and Russia spent a decade prying open.

On Wednesday, an Israeli F-35I shot down a Russian-made Iranian Yak-130 over the skies of Tehran. First manned kill by an F-35 in history. The engagement lasted seconds. The pilot finished, then went back to striking Iranian regime targets. American-built stealth technology, operating with total impunity in the airspace of a country that invested heavily in Chinese and Russian air defenses. Those defenses are now wreckage.

Pundits are screaming World War III. They’re wrong. What’s happening from Tehran to Caracas to the Panama Canal is not the opening of a global war. It’s the sound of a superpower choosing to act. Charles Krauthammer argued in his famous 2009 Wriston Lecture that decline is a choice—that nothing about America’s position is written or inevitable.

The corollary is just as true: ascendance is a choice. And the United States just made it.

The Decade Bejing Got Wrong

For the better part of twelve years, across two administrations, Washington answered Krauthammer’s challenge with equivocation. Obama chose retrenchment—leading from behind, strategic patience, red lines in disappearing ink.

Biden chose hesitation. A chaotic Afghanistan withdrawal. Slow-walked Ukraine aid. An Iran policy that amounted to hoping the regime would negotiate itself into irrelevance. Beijing watched all of it. And Beijing concluded—wrongly—that American primacy was finished. The “America in decline” narrative became doctrine in CCP circles. It shaped procurement decisions, diplomatic strategy, and the conviction that time favored China.

Six days of combat just shattered that conviction.

The Battlefield

The numbers are stark. The Pentagon reports that Iranian ballistic missile launches dropped 90% from the first day of fighting. Drone attacks fell 83%. The U.S. and Israel destroyed hundreds of ballistic missiles, launchers, and what Iran calls its “missile cities.” They established air supremacy over Tehran within the first two days. Iran’s air force is grounded—Israeli jets bombed fighters on the runway before they could take off. The regime now scatters cheap Shahed drones across 11 countries. Hasan Alhasan, a senior fellow at the International Institute for Strategic Studies, captured Iran’s current posture in two words: persistence, not volume.

Iran is one node in a much larger campaign. On January 3, U.S. special forces captured Venezuelan President Maduro in a nighttime raid. Washington now controls Venezuelan oil sales exceeding $1 billion, with revenue flowing through a U.S. Treasury account. The United States pressured Panama to terminate Chinese-affiliated port concessions at both entrances to the canal. U.S. oil production hit record levels. Washington replaced Moscow as Europe’s leading natural gas supplier. Chatham House estimates the United States now holds direct or indirect influence over roughly 20% of global oil production.

Geopolitical strategist Velina Tchakarova, who coined the “DragonBear” framework for the China-Russia strategic axis, argues these moves follow a coherent logic. She calls it Cold War 2.0—a structural confrontation between two bloc-building architectures, each trying to lock in corridors and deny the other access before the map of the next global order hardens.

The corridor logic maps cleanly onto the board. The Panama Canal links the Pacific and Atlantic. Venezuela sits at the intersection of Caribbean and Atlantic access routes, atop the world’s largest proven oil reserves. Iran controls influence over the Strait of Hormuz, through which 20 million barrels of oil transit daily. By Tchakarova’s framework, the United States is reshaping the geography of power on its own timeline.

The Tech Reckoning

The result that should worry Beijing most is the most concrete: Chinese defense technology is failing under fire. The Debrief reports that Chinese analysts are reassessing long-held assumptions about American strike reach—the speed of electronic warfare, intelligence integration, and the rapid destruction of enemy missile forces. Chinese-made HQ-9B air defense systems, reportedly deployed in Iran after last year’s 12-day war, failed to protect Iranian airspace or prevent strikes that killed senior leaders. The same pattern emerged during last year’s India-Pakistan fighting, where Pakistan’s Chinese-made HQ-9 batteries suffered damage and fed a broader debate over Chinese hardware performance.

The embarrassment extends beyond air defense. A U.S. submarine sank an Iranian frigate near Sri Lanka—part of a navy that had been deepening procurement ties with Beijing. The F-35, long maligned in the press as an overbudget boondoggle, just scored its first manned air-to-air kill in history. British F-35Bs recorded their first combat kills over Jordan. For a country that markets itself as the peer-competitor alternative to American defense technology, the Iran war is a live-fire demolition of the sales pitch. A decade of export brochures just met the real world.

Choking The Supply Lines

Energy is how a regional conflict becomes a structural great-power contest. China was the principal beneficiary of a shadow oil market that operated outside Western sanctions enforcement. Nearly all Iranian crude exports flowed to China—roughly 13% of its total seaborne crude intake, according to data analytics firm Kpler. Venezuelan crude went to Chinese refineries at steep discounts. Russian oil, sanctioned after the Ukraine invasion, sold below market to Beijing. Three rivers of cheap energy, all flowing to the same customer, all giving China a comparative advantage its rivals could not match.

Trump is damming all three at once. Venezuelan oil now flows through U.S.-controlled channels at market prices. Iranian crude is under fire. The Middle East Council on Global Affairs assessed it directly: the era in which China could reliably benefit from cheap, politically insulated energy supplies is coming under strain. The reintegration of Venezuelan—and potentially Iranian—crude at market prices compresses the discounts that made these supply lines valuable. China’s energy cost advantage is narrowing.

And the American supply cushion is real. After last year’s strikes on Iran, crude peaked at $79 per barrel and settled back to $66 within days. Energy Secretary Chris Wright cited it as evidence that Trump’s energy dominance agenda insulates American consumers from Middle Eastern volatility. The calculus is asymmetric by design: the United States does not import oil through the Strait of Hormuz. China does. Japan does. South Korea does. The disruption falls heaviest on countries that depend on corridors America now threatens—or controls.

The Silence Of ‘Allies’

If China and Russia formed a genuine military alliance, this would be the moment they’d act. They haven’t. CNN reportsthat Beijing offered nothing beyond verbal condemnation after losing two close partners in two months. China evacuated over 3,000 citizens from Iran, pressured Tehran behind closed doors not to disrupt Qatari LNG shipments, and positioned itself as the “indispensable broker” for a “future ceasefire.” Russia condemned the strikes and collected the windfall from surging oil prices. Defense Secretary Hegseth called both countries “non-factors.”

The Carnegie Endowment’s Evan Feigenbaum gives the best spin on this. Western analysts keep describing Iran and Venezuela as Chinese “allies,” but that word does enormous work it cannot support. Chinese partnerships carry no presumption of obligation or binding security commitment. Beijing does not do alliances in the American sense. It diversifies its portfolio. When an investment sours, it writes it off. China watched Khamenei die and Maduro get hauled to New York. It issued statements. That is the behavior of a stakeholder managing losses, not a superpower prepared to fight.

Former Commerce Secretary Wilbur Ross told Fortune he was “intrigued” by the absence of Chinese or Russian intervention. His assessment: the Iran campaign delivered a real-world demonstration of who is a military power.

The less positive spin for China is this: the CCP cannot project force in any meaningful way. They’ve pivoted to calling this “portfolio” management. There’s another group who acts like this, too. We call them Europeans, who are busily sending “letters of concern” while the United States acts.

Krauthammer understood this dynamic. Demonstrated will changes calculations everywhere. He pointed to Thatcher and the Falklands—improbable, risky, successful. It restored the perception of British power overnight (Keir Starmer should consider picking up a history book of his own country). Tehran is serving the same strategic function. When you prove you’ll act, and prove you can win, adversaries recalculate.

The Gulf Chooses Sides

Iran’s retaliation is doing Trump’s coalition-building for him. Tehran fired more than 1,000 drones and missiles at Gulf Arab states. Debris hit Dubai airports. Drones crashed into hotels near the Burj Al Arab and residential areas on the Palm Jumeirah. Saudi oil infrastructure took strikes. Qatar shut down gas exports after Iranian drones hit its Ras Laffan facilities.

The Wall Street Journal reports the UAE is now weighing freezing billions of dollars in Iranian assets—targeting IRGC-linked accounts and considering the seizure of Iranian ships operating from Emirati ports. If Abu Dhabi acts, it would sever one of Tehran’s most critical financial lifelines. Esfandyar Batmanghelidj, chief executive of the Iran-focused think tank Bourse & Bazaar, calls the UAE the most important conduit for Iran’s engagement with the global economy. The U.S. Treasury found that UAE-based firms received 62% of funds tied to clandestine Iranian financial activity—much of it connected to sanctioned oil sales. Years of Western diplomatic pressure could not pry that door open.

Iran’s drones accomplished what American diplomats could not: they made neutrality untenable for Abu Dhabi.

The Stretch Problem

The serious objection here is not the WWIII panic. It’s the stretch problem. The USS Abraham Lincoln carrier group redeployed from the Indo-Pacific to the Middle East. The USS George Washington sits in maintenance at Yokosuka. Bryan Clark, a former defense official at the Hudson Institute, warns that the Navy cannot maintain a steady presence in every theater. Munitions expended over Tehran are munitions unavailable for a Taiwan contingency. Japan faces delays on Tomahawk missile deliveries. Jennifer Parker, a former Australian naval officer and nonresident fellow at the Lowy Institute, notes that China expanded its South China Sea militarization the last time America was distracted. The American defense industrial base is too small, too slow, and too concentrated for the demands of a three-theater world.

This is a real vulnerability. But the argument that Beijing will exploit it assumes Chinese calculations run in one direction: opportunity. They don’t.

The Middle East Institute assessed it directly: the risks of triggering a wider conflict with an already mobilized United States likely outweigh any short-term advantage for Beijing. China lacks meaningful force projection beyond its near abroad. It has never tested its military in major combat. And it just watched its defense exports fail in live fire. A China that lunges at Taiwan while the United States demonstrates this kind of lethality is gambling that the country dismantling a regional power’s entire military infrastructure in under a week cannot pivot fast enough to respond. That is a bad bet.

And the Indo-Pacific is not bare. Japan now fields the largest F-35 fleet outside the United States—more than 40 in service with 110 on order—and operates two light aircraft carriers capable of deploying them. Nine military bases and pre-positioned forces in the Philippines fill roles that once required American carrier groups. The regional deterrence architecture has deepened since 2017. If the U.S. prevails quickly in Iran—and the Pentagon’s numbers suggest Iran cannot sustain its current tempo—the demonstration effect cuts against a Taiwan move. As Asia Times defense analyst Grant Newsham observed: a swift American victory would have a profound bracing effect on every partner in the Pacific, even the reluctant ones.

We even have some early evidence of direct impact. Reuters reports, Chinese military flights around Taiwan have “fallen sharply in recent weeks, with no flights at all in the past week.” Reuters talks up the Trump-Xi summit as a reason, but Isuspect the United States curb-stomping the Iranians while staring right at Chinese Communist Party might play a role, too. And note, Xi is purging his military staff as fast as Iran is losing new leaders.

I don’t know who I’d rather be less: a newly announced Iranian leader, or a CCP general.

The Scoreboard

Krauthammer wrote that nothing intrinsic in America’s condition dictates decline. Both decline and ascendance are choices made by leaders—not trajectories imposed by history. For twelve years, across the Obama and Biden administrations, the United States chose versions of retrenchment. The Chinese Communist Party built an entire strategic doctrine on the assumption that this was permanent. That the biggest power on the planet had lost its nerve. That the future belonged to the patient.

From Caracas to the Panama Canal to the skies over Tehran, that assumption is burning. China’s defense exports are failing in combat. Russia’s partner absorbs strikes while Moscow collects oil revenue from the sidelines. Iran’s Chinese-built, Russian-supplemented air defenses are scrap metal. The corridors are shifting. The Gulf states are choosing.

On nearly every front that defines Cold War 2.0, America is winning. The only question left is whether Washington has the discipline to finish what it started.