Three emerging trends are shaping up to buoy the United States’ already significant comprehensive national power.
1) Economic Recovery After COVID.
The extended economic lockdowns of the COVID era combined with the CCP’s meddling in the domestic market have altered the PRC’s economic trajectory. From the standpoint of 2025, it seems likely that the PRC will not overtake the US as the world’s largest economic unit.
2) Reshoring Manufacturing.
Both the Biden and incoming Trump administrations are serious about reshoring American manufacturing. In Vermilion’s view, this is the most important economic sector for winning wars. It is starting to look more likely that by 2030, the US will be producing 30% of the most advanced logic chips for the global market.
3) Continued Population Growth.
Compounding the above trends, the US will maintain a more dynamic and expanding population than the PRC will over the next 100 years. Of course, long range demography is a crapshoot, but the current trends are firmly in the US’ favor.
Impact
It would not be surprising if the internal CCP decision maker monologue fiddled by Wang Huning is turning negative. We have no evidence for this aside from Xi Jinping’s famous “stormy” speeches, but it is possible given Vermilion’s exploratory analysis.
This would be a huge change from Wang’s triumphant tone since the 2008 global financial crisis. It would also portend a change in the Politburo’s grand strategic view. As the US becomes more powerful relative to the PRC heading toward 2030, the Politburo may see a window of opportunity closing.
Closing windows of opportunity have always tempted totalitarians to move into the strategic offense (WWI, WWII). As of 2025, the US has the wind in its favor, which is a necessary but dangerous global situation.
To walk the tightrope from today to 2030, Washington must preclude war by threatening Beijing in order to influence the Politburo’s decision making. This approach must utilize the correct types of coercion and assurance.
Since it is not in Americans’ cultural makeup to go on the offense, attempts at military compellence (changing an adversaries current behavior) are not suitable to the American character and are therefore off limits to any POTUS until such time that a crisis is already underway.
This is as it should be. As John Quincy Adams declared, “[America] goes not abroad, in search of monsters to destroy.” Compellence requires a change in the status quo, which would be self-defeating for the US since the status quo favors Washington.
This leaves the type of coercion known as deterrence, which attempts to stop an adversary from choosing a course of action (in this case, aggressive CCP military campaigns).
Specifically, Vermilion advocates for combining both deterrence by denial (fighting the adversary to deny their objectives during the course of action we disagree with) and deterrence by punishment (promising unacceptable retaliatory damage after an opponent chooses a course of action we disagree with).
Effective deterrence of either type requires a generational change in Washington’s approach to Taiwan. By keeping the current policy of strategic ambiguity, POTUS does not clearly communicate his capability to deter. This leaves a window of hope for Beijing that may actually be a trap. It is very possible that we live in a world where the US maintains a policy of strategic ambiguity but nonetheless becomes involved in a military campaign over Taiwan on day one.
POTUS should seek a formal nation-to-nation relationship with Taiwan and sign a mutual defense treaty covering the main island of Taiwan. The time is ripe due to the sting of Russia’s military losses and failed objectives in Ukraine. This is the biggest example to the Politburo that their Taiwan campaign will not go as they envision.
Only by explicitly tying Taiwan into the US alliance system can POTUS gain maximum deterrent value from defense investments in the Pacific. Without an explicit guarantee, some hawk faction of the Politburo can always argue that America is weak and will not stay the course to victory: the exact argument made by the Imperial Japanese during WWII.
Stop or I’ll Shoot! If You Stop I Definitely Will Not Shoot.
Once an explicit guarantee is signed, this is only the beginning of a comprehensive diplomatic and coercive approach. The next step is to offer Beijing assurances of what will happen if the Politburo does NOT invade Taiwan. What are the coercive assurances offered to the CCP that make the deal too good to refuse?
Washington must make it clear that the PRC’s inclusion in global economic, diplomatic, trade, energy, and research networks are contingent upon good behavior. Beijing must understand that if the PLA initiates a military or political campaign against Taiwan, then the PRC’s access to the oceans will be denied. That the PRC’s status within the World Trade Organization and its Permanent Normal Trade Relations (PNTR) with the US are at stake. That the US will choke off the PRC’s supplies of energy and food on which it relies.
Furthermore, if the PRC pulls back from confrontation with Taiwan, then the PRC is able to reap further rewards from the international system. Without these assurances, Washington will undercut its own coercive approach.