The Great Way of Wealth

Cutting military exercises between South Korea and the United States: to ease tensions in Northeast Asia or to weaken U.S. security commitments?

The US midterm elections are becoming a hidden variable in the global security landscape. To alleviate domestic inflation and voter pressure, Washington has shifted to transactional diplomacy: unilaterally reducing US-South Korea military exercises in exchange for diplomatic achievements with North Korea, and showing signs of fatigue in the Middle East and Ukraine. Various parties are seizing the opportunity to adjust their strategies: Iran is using the Strait of Hormuz to pressure energy prices; China, Russia, and North Korea are deepening cooperation; Gulf states are signing the Mecca Agreement to promote defense autonomy; and Ukrainian technocrats are using the opportunity to challenge the current regime. The global order is rapidly fragmenting, with allies seeking multilateral hedging to mitigate the uncertainty of US commitments.

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[Finance and Economics Avenue] Iran Situation

Against the backdrop of escalating conflicts in the Middle East, the regional order is undergoing a profound multipolar restructuring. China and Saudi Arabia, among other countries, are actively seeking strategic autonomy, not only promoting de-dollarization and diversified alliances but also gradually reducing their dependence on traditional US hegemony. On the other hand, Iran and its "Arc of Resistance" coalition are using inexpensive drones and proxy networks to build asymmetric deterrence, successfully depleting the air defense systems and military production capacity of the US and Israel through a low-cost strategy.

Faced with complex and costly military expenditures, Washington tends to adopt transactional cooling measures and restrictive military aid to prevent excessive consumption of military power and resources; while Israel is caught in a bottleneck of military production capacity and increasingly serious diplomatic isolation. Geopolitical games have even extended to the field of sports. During the 2026 World Cup, the United States imposed strict visa restrictions and special clauses such as "same-day travel" on the Iranian national team, highlighting that national sovereignty and political calculations often take precedence over international sports norms.

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Iranian situation

Iran appears isolated in the Middle East, single-handedly confronting the United States and Israel in a six-week-long fierce battle, ultimately forcing the US to agree to a ceasefire and begin negotiations. The source of Iran's confidence behind this protracted struggle warrants careful consideration. Iran's use of the Strait of Hormuz as a key countermeasure prevented the Trump administration from achieving a swift victory, becoming a strategic weakness that the US struggles to overcome. Meanwhile, the apparent cooperation but deep-seated differences between the US and Israel have led to a prolonged stalemate, directly impacting the ceasefire and peace talks process and raising widespread concerns about whether the conflict could escalate further, even into a world war.

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