Pentagon war game exposed a critical US aluminum risk months before Iran attacks

Bloomberg News | August 5, 2026 |

Aluminum smelter. Stock image.

Last summer, about 80 government officials and industry executives gathered in Washington to answer a key question: How would the US aluminum supply chain hold up in the event of a major global conflict?

The answer: potentially not well. That’s according to an analysis of the war simulation exercise, the details of which have not previously been reported. High-purity aluminum — an ultra-refined form used by the military for fighter jets and armored vehicles — emerged as a critical vulnerability. The metal is a niche, specialty material that accounts for a small share of the overall market but is crucial for defense and the aerospace industry.

The report noted that while China is the world’s dominant aluminum producer, the United Arab Emirates is a crucial supplier of the high-purity variety to the US. It provides about 90% of American imports of that metal, according to people with direct knowledge of the matter. Any hostilities that disrupt UAE aluminum production, then, threaten deliveries to the US. The report didn’t go into detail about how US aluminum supply would fare overall. 

Seven months after the Pentagon war game, the US attacked Iran. Iranian drone strikes damaged major plants in the UAE and Bahrain in March, driving prices for the metal to a four-year high. While the UAE facility has since restarted, it will take months to return to full capacity. The closure of the Strait of Hormuz, meanwhile, has made it harder to get aluminum shipments to global buyers.

War-driven bottlenecks are amplifying concern that years of falling US aluminum production have eroded vital supply chains, putting them at risk despite the Trump administration’s tariffs and other efforts to rebuild domestic manufacturing.

The Iran war has laid bare a key weakness in the US defense industrial base: America effectively no longer makes high-purity aluminum. The nation’s sole large-scale producer shut down in 2022 because of soaring energy costs, leaving the government dependent on foreign suppliers.

That reliance on imports comes at an inopportune moment. The US military is racing to replenish high-purity aluminum stockpiles after months of war, while a global surge in defense spending is intensifying competition for the materials that underpin modern weapons production.

The attacks on Persian Gulf aluminum producers show that facilities essential to Defense Department logistics are increasingly at risk of targeted strikes, according to Bill Greenwalt, a senior fellow at the American Enterprise Institute.

“It’s a huge wake-up call for the department to be looking at supply chains in all areas around the world to ensure that they’re not especially vulnerable to attack or sabotage,” said Greenwalt, who served as Deputy Undersecretary of Defense for industrial policy during the George W. Bush administration.

Companies that sell high-purity aluminum for US military use are rushing to pin down supply as the Iran war boosts defense spending. The ultra-refined metal has exceptionally low iron and silicon content, which means it can be used to produce alloys engineered for the strength and durability that’s required for fighter jets buffeted by extreme aerodynamic forces. 

While the high-purity aluminum market is not in a true shortage, it remains tight and it’s unclear how much metal these suppliers can secure, according to people familiar with the matter.

High-purity aluminum trades about 5 to 10 cents a pound above the so-called US Midwest premium, industry consultant Greg Wittbecker said. The Midwest premium, or the surcharge added to global price benchmarks to deliver aluminum to that region, surged in June to record highs in data going back to 2003 as the Iran war roiled supply, though prices have since pared some gains.

Regular suppliers of high-purity metal include Tennessee-based Kaiser Aluminum Corp., France’s Constellium SE and Apollo Global Management’s Arconic Corp., according to one trader. The companies are the top three providers of the ultra-refined metal to defense contractors including Lockheed Martin Corp. and Boeing Co. 

A spokesperson for Kaiser declined to comment. Spokespeople for the Defense Department, Constellium and Arconic didn’t immediately respond to requests  for comment. 

Much of the supply is likely to come from Emirates Global Aluminium PJSC. It’s the dominant supplier to the US, providing about 75,000 to 85,000 metric tons of high-purity aluminum per year for military needs, according to a person with direct knowledge of the matter. Whether the three manufacturers can obtain enough material now hinges on uninterrupted shipments from the Middle East and how fast EGA’s damaged plant can restart, they added. Aluminum stockpiles held by EGA in the US are running low, they said.

A spokesperson for EGA declined to comment.

“This is a very specific type of aluminum product that is very much business to business, so it’s not something that you can go and pick up from a distributor,” Uday Patel, senior research manager for global aluminum markets at Wood Mackenzie, said in an interview. “We’re in a situation where there is no solution. Much will depend on how much stocks are in the pipeline.”

‘Large-scale combat’

The Pentagon war game unfolded over two days in July of last year, according to a report from the nonprofit Institute for Defense Analyses, which oversaw the exercise. 

The government officials and executives gathered were presented with a task: Increase the capacity of the US aluminum industry before and after a “major large-scale combat operation” that would curtail imports in 2027. A second event, such as a cyberattack leading to the loss of a smelter, would occur at the same time.

The participants were given cards representing actions they could take, like enforcing a “Buy American” rule, along with the estimated cost. They had to stick to specific budget scenarios ranging from $12 billion to $1 billion. Using wall charts, they wrote down their actions on sticky notes placed along a timeline.  

At the end of the exercise, the participants made a series of recommendations for government agencies and policymakers. They advised amassing a domestic stockpile of high-purity aluminum and related products, as well as expanding US production of the metal and investing in new equipment. They also suggested improving access to low-cost, reliable power sources, which they said could be done by reopening old coal-fired plants or opening new nuclear reactors and natural gas generators.

The war game was part of a broader effort to identify strategic dependencies. That’s an area where Washington has made far more progress diagnosing the problem than fixing it, according to Michael O’Hanlon, the Philip H. Knight Chair in defense and strategy at the Brookings Institution, a Washington think tank.

The Pentagon frequently lacks information about subcontractors who are multiple steps removed from prime Defense Department contractors like Lockheed Martin, meaning dependencies become fully apparent only after a disruption occurs, according to O’Hanlon. Though the president can invoke the Defense Production Act — a federal law that grants emergency powers to control domestic industries — to prioritize the use of aluminum for the military, that would mean less supply for civilian consumption.

“If you start prioritizing for the military, then you’re going to deprioritize for somebody else,” O’Hanlon said.

As part of an effort led by Deputy Secretary of Defense Stephen Feinberg, the Pentagon has been working to gain better visibility into its supply chain, including for sub-tier suppliers many rungs below the primary contractors.

Treasury Secretary Scott Bessent in late June called for assessing supply-chain vulnerabilities across various industries and expanding domestic capacity to ensure the US is never at the mercy of foreign chokepoints.

The Defense Department’s war game “makes clear that America’s military readiness is inseparable from America’s industrial readiness,” Charles Johnson, chief executive officer of the Aluminum Association industry group, said in an emailed statement. 

Johnson said the Aluminum Association is urging the Senate to advance the provisions in the House-passed National Defense Authorization Act that would strengthen the US domestic aluminum supply chain. The legislation would direct the Defense Department to submit a report to Congress on the supply chain, including an analysis of opportunities to increase aluminum production in the US.

Falling short

US policy efforts have so far fallen short, however.

In the clearest acknowledgment yet that President Donald Trump 50% tariffs on foreign aluminum haven’t boosted domestic manufacturing as intended, his administration recently unveiled an incentive program aimed at bringing aluminum smelting back to the US. The plan offers to halve duties on imports of the metal for companies building domestic plants.

Despite “the benefits from the aluminum tariff regime, the domestic production and supply of primary aluminum, which is critical to the US economy and defense industrial base, is still in insufficient supply,” according to a White House proclamation. 

Trump’s tariffs have also hindered domestic stockpiling of aluminum. That’s because they’ve helped drive up US prices, forcing manufacturers to buy only what they need as costs rise. 

The Pentagon’s Defense Logistics Agency has sought to procure high-purity aluminum on its own. Last year, it put out a tender seeking a contractor to provide the metal, with a stringent requirement: The material had to come from a US supplier. That’s a common provision in Defense Department contracts.

The agency later withdrew the tender without explanation. While Arconic makes the ultra-refined metal at its plant in Davenport, Iowa, the facility uses feedstock that’s partly imported. And the output is on a small scale and is only for the company’s internal consumption.

Artificial intelligence is a growing threat to US aluminum manufacturing, albeit an indirect one. Aluminum production, among the most energy-intensive industries, is struggling to compete with power-hungry data centers for cheap electricity. 

Before it was shut in 2022 due to high energy costs, Century Aluminum Co.’s Hawesville, Kentucky, smelter was identified by the Commerce Department as the only high-purity aluminum producer in the US to meet military demand. Century Aluminum sold the site earlier this year to TeraWulf Inc., a company that plans to build a data center there for AI behemoth Anthropic.

The US military can still get the high-purity aluminum it needs if it’s willing to pay a higher price, according to Eugene Gholz, an associate professor of political science at the University of Notre Dame. The metal can be produced elsewhere, although at elevated cost or with delays, he said. 

“If the government really wants the high-purity aluminum, they’re going to get it,” said Gholz, who served as senior adviser to the Deputy Assistant Secretary of Defense for Manufacturing and Industrial Base Policy from 2010 to 2012.

Still, supply-chain adjustment is neither immediate nor inexpensive. New production can take years to develop, especially in defense industries where permitting and investment are lengthy processes. That will remain a challenge for the US as it seeks to diversify its sources of high-purity aluminum and other critical materials, according to Jerry McGinn, director of the Center for the Industrial Base at the Center for Strategic and International Studies in Washington.

“These markets migrated out of the U.S. in the ’80s and ’90s because of market forces,” McGinn said. “Bringing them back is a hard thing to do.”

(By Yvonne Yue Li)

Deconstructing The Western Anxiety Over Chinese Industrial Ascendancy – OpEd

August 6, 2026
By Dr. Imran Khalid


Key Takeaways:

The Western “Chinese overcapacity” narrative is a politically convenient fiction that externalizes blame for domestic industrial decline rather than addressing structural weaknesses at home.

China’s manufacturing scale is the natural outcome of historical shifts in global industrial centres and comparative advantage; its capacity utilisation rates and trade surpluses are normal by historical and international standards.

Restricting Chinese production would raise energy costs, slow the green transition, inflate consumer prices in the West, and hinder industrial development in poorer countries — making decoupling far more damaging than the supposed problem it claims to solve.

For the better part of the current decade, Western trade discourse has been anchored to a singular, convenient fiction. Across policy circles in Washington and European capitals, the narrative of a Chinese overcapacity crisis has been elevated to an article of faith. Policymakers and protectionist lobbies frame Beijing’s massive industrial footprint not as a triumph of economic efficiency, but as an existential menace to global market equilibrium. Trade investigations, tariff escalations, and breathless warnings of an impending industrial flood dominate international forums. Yet, beneath the diplomatic posturing and the hurried policy memos, this narrative crumbles under rigorous examination. It relies on a malleable and politically motivated definition of industrial capacity, a profound amnesia regarding economic history, and a willful disregard for the disastrous consequences that an artificial decoupling from Chinese manufacturing would inflict upon the global economy.

To comprehend the contemporary panic, one must first recognize its geopolitical utility. The overcapacity thesis serves as a rhetorical shield for industrial sectors in the West that have lost their competitive edge through decades of underinvestment, short-termism, and financialization. Rather than confronting structural deficiencies at home, Western policymakers find it politically expedient to externalize the blame, casting Chinese manufacturing prowess as an anomaly rather than the logical result of systemic discipline, continuous technological upgrading, and deep-going market reform.

The foundational flaw in the Western argument is its historical illiteracy. Since the dawn of the Industrial Revolution, global manufacturing centers have never remained static fixtures on a map. Industrial dominance has always migrated in response to capital accumulation, technological diffusion, and comparative advantage. In 1880, British industrial output accounted for a peak of 22.9 percent of the global total. By 1953, the United States seized the mantle, commanding 44.7 percent of world industrial output. In the decades following the Second World War, the global industrial landscape fractured into multiple centers, shifting from the United States to Europe, then to Japan, and subsequently across East Asia. Today, North America, Europe, and East Asia account for 17 percent, 17 percent, and 38 percent respectively of the world’s total manufacturing value added. China’s emergence as the world’s premier production hub is neither an aberration nor a distortion of market forces. It is the natural culmination of participation in the international division of labor. To treat China’s manufacturing scale as an unnatural threat is to deny the foundational mechanics of global capitalism.


Compounding this historical evasion is the fundamental ambiguity of the term overcapacity itself. International organizations possess no universally accepted definition for the concept. In market economies, the relationship between supply and demand naturally moves through cycles of adjustment, oscillating between balance, imbalance, and rebalance. A permanent state of capacity equilibrium has never existed in a capitalist system. Economists routinely point to capacity utilization rates as a definitive metric of excess, yet standard benchmarks vary wildly across regions. For developed economies, a rate between 75 and 80 percent is typical, while developing nations generally range between 50 and 64 percent. China’s industrial capacity utilization rate sits comfortably within normal operating parameters, with significantly higher utilization observed in high-tech manufacturing, advanced equipment production, and strategic emerging industries. These empirical realities render the overcapacity label entirely fraudulent.

Critics frequently invoke China’s trade surplus as definitive proof of structural overproduction. This argument collapses under comparative historical scrutiny. Throughout modern economic history, major manufacturing economies have routinely maintained prolonged trade surpluses. Britain, the United States, Japan, and Germany have all run substantial surpluses for extended periods. Germany and Japan have frequently recorded current account surpluses exceeding 6% of GDP. Emerging market economies follow a remarkably similar trajectory, with nations like Indonesia, Mexico, Brazil, and Vietnam maintaining trade surpluses across multiple years. At the industry level, global trade specialization is standard practice. Approximately 80 percent of United States semiconductor production is exported, while roughly two-thirds of Boeing’s commercial aircraft deliveries are destined for customers outside North America. The European Union routinely records massive trade surpluses in automobiles, pharmaceuticals, and cosmetics. Singling out China for participating in the exact same structural specialization reveals a glaring double standard.


Furthermore, the narrative of unilateral Chinese export dominance ignores who actually captures the value within China’s manufacturing ecosystem. Foreign companies operating within China command a substantial share of export revenues and profits. Foreign-invested enterprises account for over a quarter of China’s exports and a significant portion of its trade surplus, with their profit growth frequently outpacing domestic counterparts. Nor is this export orientation driven by weak domestic demand. Domestic consumption and investment have historically accounted for the vast majority of China’s economic growth, with the domestic consumer market expanding dramatically. Adjusted for purchasing power parity, China’s retail market stands as the largest in the world, eclipsing that of the United States. Import growth has consistently outpaced export growth in recent structural periods, demonstrating that China functions as a vital consumer market rather than an insular fortress dumping goods abroad.

The most dangerous dimension of the overcapacity narrative is its profound disregard for what the global economy would face in the absence of Chinese manufacturing. The rhetoric of decoupling assumes that alternative suppliers could seamlessly step into the void without economic dislocation. The physical reality is starkly different.

Consider the global energy transition. Amid persistent geopolitical volatility and strained energy markets, shifting to green energy has graduated from a climate obligation to an economic survival imperative. Over the past decade, the levelized cost of electricity for global wind and solar photovoltaic projects has plummeted by more than 60 and 80 percent respectively, driven almost entirely by the scale and efficiency of Chinese production capacity. Developing nations rely heavily on this affordable technology. In Pakistan, for instance, the rapid adoption of distributed photovoltaics, fueled by imports from China, allowed the country to reduce its oil and gas imports significantly over a multi-year window, saving billions in import costs and cushioning the economy against severe external energy shocks.


For consumers in developed nations, restrictions on Chinese imports translate directly into rising living expenses. Economic analyses in the United States indicate that prolonged trade barriers have measurably inflated annual household expenditures for the middle class, as alternative suppliers struggle to match pricing and volume. Conversely, empirical estimates from European monetary authorities suggest that expanding trade integration with China helps suppress inflationary pressures across advanced economies.

Developing economies face a parallel predicament. Without access to affordable industrial equipment, machinery, and components, climbing the manufacturing ladder becomes an insurmountable challenge. Over the past decade and a half, China has exported tens of billions of dollars worth of textile machinery and industrial tools to developing nations across Asia and Africa, enabling local economies to build viable domestic manufacturing sectors. At the same time, China has dramatically expanded its imports of labor-intensive goods from the developing world, creating mutually reinforcing trade loops.

Ultimately, the debate over excess capacity is not a technical dispute over capacity utilization or subsidy metrics. It is a political contest over the distribution of global power and the rules of international trade. As major powers grapple with shifting industrial competitiveness, the language of overcapacity provides a convenient justification for protectionism. Yet, framing structural competitiveness as an economic pathology obscures the real challenges facing the global economy. A rational international order cannot treat export success as a security threat, nor can it wish away the foundational efficiencies of global supply chains. If the international community yields to the impulse of fragmentation, the cost will be paid not in abstract economic theory, but in higher energy costs, delayed climate targets, and a crippled global development ladder. Managing industrial rivalry requires realism, not rhetorical panic.


About Dr. Imran Khalid
Dr. Imran Khalid is a geostrategic analyst and columnist on international affairs. His work has been widely published by prestigious international news organizations and journals.
View all posts by Dr. Imran Khalid →

 

LONG READ: Zelenskiy sounding increasingly desperate as the hunt for air defence ammo fails

Down to his last Patriot interceptors, short a defence minister and a commander-in-chief the public trusts, and watching the Donbas fortress belt crack, Ukraine's president is running out of levers to pull. / bne IntelliNewsFacebook

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By Ben Aris in Berlin August 3, 2026

Ukrainian President Volodymyr Zelenskiy is starting to sound desperate. A terrifying winter bombardment by Russian missiles is clearly on the way as soon as the mercury begins to fall, but the Uralian president said at the weekend, Kyiv is down to its last PAC-3 Patriot interceptor missile left. He has about six months to find some more.

And the chances of getting any more have fallen close to zero. Zelenskiy made a deal with US President Donald Trump during the Ankara Nato summit on July 8 to get a license to manufacture the only missile that can take out Russia’s deadly ballistic missiles, only for Trump to walk his commitment back less than a week later. He talked with Russian President Vladimir Putin by phone in the meantime.

Zelenskiy also asked Trump for an emergency tranche of 300 interceptors from the US stockpile. But an audit of the US stockpile just found the US military is down to only 759 interceptors left, according to the Center for Strategic & International Studies (CSIS), after the first month of the Iran war. Zelenskiy was demanding a third of the remaining US stock of PAC-3s and obviously Trump said no. “We need them ourselves.”

Europe can’t help either as they are also scrapping the bottom of the barrel after generously sharing what spares they had over the last four and half years. Orders to replace those missiles are already backed up for years as the US only makes about 650 interceptor missiles a year. They are very complicated and expensive to produce.

But none of this has stopped Zelenskiy from appealing for help on nearly a daily basis.

“The United States knows what we need. Europe knows what we need. Anti-ballistic missiles must protect people – not sit in stockpiles. And every day without this vital assistance gives Russia another chance to kill our people,” the president said in his daily video address again on August 1.

This campaign is summed up in a project, known as FREYJA, that is the centerpiece of the newly created Integrated Anti-Ballistic Missile Coalition, launched by Ukraine and several European countries to develop a joint missile defense capability. But unless some more actual missiles can be found, all FREYJA is, is a new rhetorical device to pretend something is being done about defence. 

The tone has changed. The swagger of the wartime “I don’t need a ride, I need ammo” hero has faded. The talk of Nato membership has been abandoned as that is never going to happen. Plans for counter-offensives and coalitions with the US plus Europe has given way photoshoots with the E3 (France, Britain and Germany), which has been reduced to the E2 after UK Prime Minister Keir Starmer was forced to resign and will be reduced to an E1 when French President Emmanuel Macron leaves office next year. Zelenskiy sounds almost plaintive as he pleads with allies to dig even deeper into stockpiles that have already been run down to below strategic minimums.

Zelenskiy is left grappling with a problem to which it seems there is no solution as Ukraine is about to face its Battle of Britain moment.

One interceptor

Russia is getting ready to repeat last winter’s campaign where Russian President Vladimir Putin attempted to freeze Ukraine into submission by destroying what remains of Ukraine’s power sector. Ukraine went into this war with just under 60GW of generating capacity but currently has 14GW left. Russia has reportedly already begun stockpiling missiles for this year’s campaign and has ramped up missile production capacity in the last year – almost doubling the output to some 2,500 missiles a year.

It's crunch time for Kyiv. For much of the second and third year of the war residents of Kyiv became almost blasé about the air raid sirens, confident that the Blue and Yellow Iron dome of air defences that cover the capital could repel the inbound Russian rockets and drones.

That has changed now as the volume of Russian missile attacks has mushroomed just as the supply to interceptor missiles dwindles. Tens of thousands of Kyivians now find themselves spending the weekend sleeping in the ornate subway stations. Kyiv's mayor Vitali Klitschko warned last weekend that the city's shelter network, roughly 4,000 sites, cannot expand fast enough because district administrations have failed to spend funds already allocated for mobile shelters.

On August 1-2, Russia launched 35 missiles and 185 attack drones at Ukraine overnight - 27 of them ballistic. Ukraine's air force intercepted precisely one.

"Only one ballistic missile was intercepted, simply because there are no interceptors for the Patriot systems," Zelenskiy said in his evening address, adding that Kyiv bore the brunt of the attack while Dnipro, Sumy, Kharkiv and Poltava regions were also hit. Eighteen residential buildings, a school and the Lithuanian Embassy were damaged; nine people were killed.

Russia is rapidly scaling up its missile war, as Zelenskiy correctly said in Turkey earlier this month: “The war is going into the air.” The president has been pleading with the West to close the skies over Ukraine since the first week of the war, but his worst fears have been realised. The skies over Ukraine are now open. This was the worst possible time to sack Defence Minister Mykhailo Fedorov and then fail to replace him as part of the recent surprise government reshuffle.

But the missile shortage is only the most visible of four crises now running in parallel: a presidency shaken by its worst domestic unrest since the war began, a front line buckling in the Donbas, and a civilian-economy war that both sides are now waging deliberately against each other. None of the four is new on its own; but now they are all escalating at once.

Russia launched a record 376 missiles at Ukraine in July – half of which were ballistic missiles that only Patriot interceptors can bring down, and more than twice as much as in June, according to a new AFP analysis. For comparison, Russia launched between 200 and 300 ballistic missiles at Ukraine in all of 2024. At the same time, the Kremlin has ramped up its use of drones to around 2,000 per month and slightly fewer of the very powerful FAB glide bombs, again which Ukraine has no defences at all. Not even the Patriot interceptors can stop a glide bomb, as it falls rather than flies.

Washington gives, then takes back

The interceptor shortage was supposed to have a fix. At the Nato summit in Ankara, Trump made a dramatic volte-face on support for Ukraine by pledging to grant Ukraine a licence to make Patriot missiles itself, even though the construction of those factories would likely take years to complete.

But only days after Ukraine signed off on joint ventures with the leading US manufacturers in the same week, Trump told a Cabinet meeting at Camp David "we have not agreed to that", calling Patriot production technology "a hard thing to give away". Then Boeing put the kybosh on the project by refusing to share its advanced seeker technology with Ukraine.

As it becomes increasingly clear Ukraine will not be resupplied with new interceptors, Zelenskiy turned to Plan B: if the Armed Forces of Ukraine (AFU) can’t shoot inbound Russian missiles down while in the air, then it will blow up the launchers before they ever leave the ground. But for that to work, Zelenskiy needs US help too.

Zelenskiy asked Trump to lean on US billionaire Elon Musk to widen Starlink access for Ukrainian strikes deep inside Russia: the Kyiv Post reported that Trump said he would consider the request but made no commitment; the owner of the satellite communications company, Musk’s SpaceX, currently allows Ukraine to use Starlink only on its own territory, including Russian-occupied Crimea, and blocks it inside Russia proper thanks to the intervention of Ukraine’s now ousted Defence Minister Mykhailo Fedorov, who struck up a good rapport with the eccentric US tycoon.

Despite Zelenskiy's Churchillian reputation, Musk rejected a Bankova-request for a meeting while in Washington. It appears that the president’s decision to sack his popular Defence Minister has turned out to be a major blunder, The Atlantic reported.

The last plank in Zelenskiy defence strategy is a call on G7 allies to close "all the gaps" in their sanctions regimes and specifically targeting companies supplying components for Russian ballistic missiles as well as demanding a total crackdown on tech aiding Moscow's oil refining sector in a last-ditch effort to cut off Russian supplies of critical technology.

That is not working either. As IntelliNews reported, the Armed Forces of Russia (AFR) is crippling Ukraine’s ports with the new cheap-to-produce Banderol cruise missile that has only recently joined the fray to devastating effect. A large share of its electronics is sourced from the so-called “unfriendly countries” that have imposed sanctions on Russia. The EU recently passed its 21st sanctions package, but was forced to significantly water its measures down thanks to heavy lobbying by member state vested interests. Despite the upbeat rhetoric, the entire “extreme” sanctions regime remains as leaky as a colander.

A presidency under siege

The war in Ukraine has moved into its most brutal phase so far as both sides are endeavouring to make life for the general population as hard as possible – and that is costing Zelenskiy at the polls.

Zelenskiy is fighting a second war at home. Ukraine's largest street protests since 2014 broke out following the dismissal of Fedorov, who local reports claim the president saw as a growing political rival. Zelenskiy is believed to have also sacked the former commander-in-chief General Valerii Zaluzhnyi when he also overtook the president in the polls. The official explanation was an irreconcilable personality clash with commander-in-chief Oleksandr Syrskyi, who was also sacked. "Without me they don't sit down together [to talk]," Zelenskiy told the Financial Times.

Tensions in Ukrainian society are rising before the reshuffle scandal broke as weariness with the war and hardship grows. Videos of the much hated Territorial Recruitment and Social Support Centres (TCK) officers snatching young men from the street and bundling them into buses -- the “busification” campaign – are a daily occurrence. There was an outpouring of public outrage after TCK officers grabbed a 34-year-old single father from Kryvyi Rih, snatched in front of his 5-year-old daughter as he picked her up from school. The father was the sole caregiver and the school’s principal took the weeping little girl to the recruitment centre to try and have the father released. They refused. It was only when the video of the girl crying blew up on the social media that Bankova relented.

Violence towards the TCK officers has tripled in the last year, with one officer reportedly dying after being stabbed in the neck by his victims already. There were reports and video of a man opening fire on a TCK officer trying to busify him just this weekend. An anti-conscription riot broke out in Lviv two weeks ago where protestors rioted and smashed up a TCK car causing the officers to flee the scene.

Zelenskiy’s approval rating in the polls have tumbled to 59%, still high but much less than Putin’s own 66%. An Ukrainska Pravda-reported poll from July put trust in former commander-in-chief General Valerii Zaluzhnyi at 70%, Fedorov at 65% and Kyrylo Budanov, Ukraine’s former HUR spy master who now the head of the presidential administration, at 62%. All three men now poll ahead of Zelenskiy.

At the start of July Zelenskiy was mulling with the idea of holding elections in September and reportedly asked Zaluzhnyi to stay out of the race. Zaluzhnyi refused. Zelenskiy has since dropped the idea of a vote.

It’s not a political crisis yet: a separate July 20-21 first-round vote-preference poll still had Zelenskiy comfortably ahead of both potential rivals with 22.3% to Zaluzhnyi's 14.9% and Fedorov's 13.4%. But protesters have continued gathering outside the presidential administration on and off for over two weeks now since the government reshuffle in an unprecedented display of public wartime opprobrium. One demonstrator quoted online on July 31 compared the chants directly to those that opened the 2014 Maidan revolution and Ukrainian protestors have already forced two presidents out of office.

Crowds fill a central Kyiv boulevard during one of the ongoing protests against the government reshuffle on August 1. Source: social media.

Fuelling the unrest is the metastasizing Energoatom corruption scandal that has implicated most of Zelenskiy's inner circle, focused on his close friend Tymur Mindich, who skipped town only hours before investigators raid his home and office in Kyiv. He is accused of siphoning off $100mn in kickback schemes – a toilet made of solid gold was found in his apartment – that left Ukraine’s nuclear power infrastructure defenceless in the face of Russian drone attacks and now lives in self-imposed exile in Israel.

More ominously, protests first erupted last year after Zelenskiy attempted to gut Ukraine’s anti-corruption reforms by ramming through law 21414 at the weekend during the Rada’s summer break. Caught out by the popular anger and Brussel’s harsh criticism, he was rapidly forced to back down and reverse the decision. Last summer, Zelenskiy was criticised for becoming increasingly authoritarian. He has yet to directly address the complaints of the crowds currently gathering on the Maidan square.

Coming a year apart, the two sets of street demonstrations have fed a narrative, encouraged by critics and Russian disinformation alike. Iuliia Mendel, Zelenskiy’s former press secretary, has become a vocal critic of her former boss, denouncing the corruption surrounding him in a widely shared interview with US celebrity journalist Tucker Carlson on March 22. Bankova, Ukraine’s presidential administration, has countered with a large-scale media campaign to discredit her and reportedly threatened to conscript her husband and send him to the frontlines.

The front is buckling too

Zelenskiy is facing major setbacks on both the international and domestic fronts, but the most threatening is things are going badly on the battlefield too, although exactly what is happening remains the subject of a lively debate.

In the run up to the Ankara Nato summit, Bankova’s media machine went into overdrive to push the “the war has reached a turning point” narrative that became a well-established meme, but since then reports from the Donbas are starting to admit that the Russian forces are making slow by steady progress, albeit at an enormous cost in lives, and the famed “Fortress Belt” is in danger to falling to Russia.

“We may soon learn that Zelenskiy expended unsustainable levels of Ukrainian manpower in the first half of 2026 to create his "turning point" PR campaign to try to win over Trump by the July Nato summit. And now the damage is coming due,” said veteran Russia reporter Mark Ames in a social media post.

Several key cities have fallen into Russian hands in the last six months. The key logistics hub of Pokrovsk was captured in December that stands at a nexus of road and rail to supply Ukraine’s forces protecting the unoccupied parts of Donbas. Although it is not completely controlled by Russia, it is in effect lost to the Ukrainian government.

More recently Kostiantynivka has also been taken by the Armed Forces of Russia (AFR) this month, one of the three fortress cities that make up the belt cities at the heart of the war today. And in the last week Chasiv Yar that commands the approach to the fortress belt also fell to Russia after just under three years of fighting.

It has been impossible to confirm the status of these battles, and the milbloggers' reports on them disagree on the extent of Russian control. Thanks to the advent of drone warfare, a city's capture is no longer a binary event. The AFR have largely pushed the AFU out of Pokrovsk, but a Russian soldier attempting to patrol its streets faces the constant threat of a death-from-above drone strike by AFU units still operating in or near the city.

The Lyon-based AMK Mapping milblogger has reported that not only has Kostiantynivka fallen, but the AFR are now only a few kilometres away from Kramatorsk and Sloviansk, the remain two fortress cities in the defensive belt and Russian troops are starting to infiltrate the suburbs, which is how Pokrovsk was captured. He released a video, purportedly of a Russian First Person View (FPV) drone flying at ground level through Kramatorsk, hunting for Ukrainian military vehicles this weekend.

 

Russian FPV drone footage, flying at street level inside the Ukrainian fortress city of Kramatorsk. Source: AMK Mapping

Other milbloggers, such as the Washington-funded Institute for the Study of War (ISW), claim the AFR’s progress is much slower, taking less than 1.2km/day. The oft sited DeepState milblogger also reports slow progress, but critics complain it releases its widely followed maps with long delays and suspended releasing fresh maps in the run up to the Turkish Nato meeting entirely. Nevertheless, all the milbloggers admit that the AFU defenders are on their backfoot and Russia is making progress.

As the Russians get closer to the fortress cities, they come into both artillery and glide bomb range. The massive FAB glide bombs – powerful WWII-era gravity bombs with wings and jets strapped to their backs – can carry as much as 3,000kg of high explosive, whereas a typical drone carries only 50kg of explosives. A drone can kill a man; a glide bomb destroys the entire building he is hiding in.

But glide bombs have a maximum range of 100km, which is why reports by milblogger Military Summary this weekend of a very rare patrol over Donetsk Oblast for the first time in two years by a Russian SU-57 all the way up to the southeastern outskirts of Donetsk city, coming within 78 km of today's frontline, are unsettling. Glide bombs are typically released from the SU-57.

Ukraine remains defenceless against these cheap and plentiful weapons. Even Patriot interceptors cannot stop them. The only way is to shoot down the plane that drops the bomb and Ukraine only has 37 F-16s to Russia’s fleet of 350 highly advanced fighter jets.

One of Fedorov’s innovations was to introduce medium-range drones that have been playing havoc with Russian supply lines, but on balance the destructive power of glide bombs outweighs those disruptions, and Zelenskiy reports that Russia has been using them in large numbers.

“The loss of the people and infrastructure just increased. People are running from Ukraine and this tendency will increase before winter,” said Mendel in a comment on the reports coming out of the Donbas. Last week, unconfirmed reports appeared on social media of a large increase in the number of people queuing up at the border trying to leave.

The deteriorating picture is now the first major test for incoming commander-in-chief Mykhailo Drapatyi, who takes over a front requiring difficult stabilisation decisions before the end of summer.

And the lack of manpower remains a major headache for both Ukraine and Russia. The AFR is reportedly losing around 1,000-1,400 men a month – more than it is able to recruit. However, the AFU is also losing an estimated 200 men a month: four times less than Russia if you accept the official estimate of 35mn people in total, and six-times less if you believe the alternative estimates of 25mn people that includes the 8mn refugees that have left the country since the war starter. In other words, proportionally, Ukraine is losing as many or more men each month as Russia.

Answering in kind

With interceptors scarce and the front under pressure, Ukraine's only option hurt Russia too as much as it is hurting Ukraine. That is fuelling the rapid escalation in the tit-for-tat missile war.

In the middle of July Kyiv's drones destroyed the warehouses of Russia’s largest e-commerce company, Wildberries' Elektrostal and Kotovsk logistics centres that accounts for just under 9% of the country’s entire retail turnover and 3% of GDP. Wildberries also owes trillions of rubles to Russia’s second largest bank, VTB, and could also cause a financial crisis if it goes bust – which seems increasingly likely.

Operation Wildberries killed and reconstruction alone could cost Wildberries' parent RUB35.8bn ($446mn). But the real damage it is has brought the war in Ukraine into the front room of regular Russians; Putin has worked hard to insulate the bulk of society from any effects of the war, but that façade is crumbling now.

Kyiv is also racing to close its missile-production gap rather than wait on empty promises from Washington. Ukraine gave up all its missiles at independence three decades ago, but since the war began has set up new production that is now starting to churn out domestic missiles. Ukraine already successfully adapted its Neptune ship killer and sank Russia’s Black Sea flagship right at the start of the war. Since then Fire Point, a company founded by Zelenskiy’s associates, has already developed the Flamingo cruise missile and the FP-9 programme to make Ukraine’s first true ballistic missile, is expected to go into production this autumn.

Russia's sheer size was the key advantage in the war against Napoleon in 1812, It is now a liability against Ukraine as the Kremlin cannot effectively protect even a fraction of its own territory. Even Moscow has a population the size of most Central European countries. Military analysts say that Ukraine does not even need to reach parity with Russia’s missile production to inflict complete chaos on the Russian economy. But it has become a race against time and time is running out fast.

  

Insight: Trump may need to allow Chinese minerals as US industry struggles to meet 2027 deadline

Reuters | July 27, 2026 |

Aerial view of MP Materials’ Mountain Pass rare earths mine photographed in 2022. Credit: MP Materials.

US President Donald Trump’s push to end Washington’s reliance on Chinese critical minerals by January is colliding with a stark reality: American miners and processors aren’t ready.

Trump has made US mining and processing of critical minerals a national security priority since returning to office, pouring tens of billions of dollars into ​nearly 150 minerals companies to loosen China’s grip on supply chains for weapons and other strategic products.

The defense industry and other manufacturers are now just over five months away from a January 1, 2027, deadline under federal regulations to ‌stop purchasing rare earths, magnets, tungsten, molybdenum and tantalum from China, Russia, Iran or North Korea.

Washington has been trying to limit such imports for years but has routinely granted companies waivers because the US supply can’t meet the demand.

Trump railed against such waivers in a May 10 post on his Truth Social platform, saying: “ALL FEDERAL AGENCIES MUST BUY AMERICAN — NO EXCUSES!” Last Monday, he signed an executive order making it even harder for defense contractors to obtain waivers.

But the reality is that US minerals companies are nowhere close to meeting domestic needs, according to interviews with 16 industry executives, investors, analysts and policymakers.

In 2025, US demand for the most-common type of rare ​earth magnet, for example, was roughly 48,000 metric tons while domestic sources supplied 300 metric tons, according to data from the Arthur D. Little consultancy. US firms are on track to have the capacity to produce 5,000 metric tons by year-end.

Rare earths, ​which are among the 60 minerals considered critical by Washington, must be processed before they are turned into magnets used to make weapons, automobiles, computers and other products.

US firms haven’t produced tungsten since 2015 and ⁠tantalum since 1959. Guardian Metal Resources is working to open a US tungsten mine by 2028, while Lion Rock Resources is developing a tantalum mine in South Dakota, with no timeline for opening.

Chris Berry, a minerals industry analyst and consultant, said the US industry has little chance ​of producing enough minerals to end waivers by January.

“It’s going to take many more years to get the needed infrastructure in the ground to compete,” said Berry.

The United States has reserves of most critical minerals; what it lacks is the capacity to mine and process many of them. ​China grew to dominate the minerals-refining industry in the late 20th century and controls more than 80% of the sector today. The International Energy Agency warned this month that $6.5 trillion of global manufacturing is at risk if Beijing imposes export restrictions on rare earths, as it has periodically in recent years.

Asked for comment, the White House referred to Trump’s executive order, which says waivers can only be issued if a contractor shows an “exhaustive effort” to avoid Chinese material and has a timeline for weaning itself off such supply.

The Pentagon did not respond to requests for comment.

US rare earths investment has been hindered by persistently low prices for many minerals, which ​Washington blames on China subsidizing its producers and flooding the market with cheap products, thus making American projects unprofitable.

China has repeatedly said it abides by World Trade Organization rules on global trade and works to ensure stable markets. A representative for the Chinese embassy in Washington had ​no further comment.

Ucore Rare Metals, a minerals refining startup backed by the Pentagon, has developed a processing technology known as RapidSX that it believes is similar to but faster, cleaner and cheaper than the industry standard solvent extraction.

Ucore had planned to start refining by 2025 but has reworked its plans due to ‌what it says ⁠are changing demands from the Pentagon. It now won’t begin some production until 2027 at the earliest, company CEO Pat Ryan told Reuters.

“Can the entire supply chain be propped up by 2027? Boy, I tell you, that’s a battle,” Ryan said.

Trump moves to stockpile imported minerals

The Trump administration in February launched Project Vault, a $12 billion effort to stockpile critical minerals for American manufacturers. Officials acknowledged in April that they will need to initially buy minerals from “anywhere in the world,” including China.

Defense contractor Lockheed Martin has given a list of minerals to the Department of Defense it would like stockpiled, CEO Jim Taiclet said at a conference earlier this month.

That push for stockpiling irks US minerals companies who say they need defense contractors to place orders with them.

“Defense contractors have just assumed they can keep buying Chinese products,” said Nick Myers, CEO of Massachusetts-based Phoenix Tailings, a minerals ​startup that last month received a $500 million Pentagon loan to build ​a processing facility. “The defense industry is never going to stop if ⁠you keep giving waivers.”

Defense contractors Boeing General Dynamics, Huntington Ingalls Industries, Northrop Grumman and RTX did not respond to requests for comment. L3Harris Technologies declined to comment.

Delays, uncertainties for refining projects

The complexity of refining minerals has slowed down US projects.

Partnerships with South Korea, Japan and other allies may offer a bridge for manufacturers until US suppliers can ramp up operations, said Samantha Carl-Yoder of the law and lobbying firm ​Brownstein Hyatt Farber Schreck.

Among the biggest US companies in the field, MP Materials, which is financially supported by the Pentagon, spent years calibrating its solvent extraction processing equipment, part of what CEO Jim Litinsky described ​as a “painstaking” process.

MP has built a magnet ⁠facility in Texas and said it expects to have some magnets approved for use by its first customer, General Motors, by the end of the year. A separate magnet facility that MP is building for the Pentagon is slated to open in 2028.

In Marion, Indiana, ReElement Technologies plans to process minerals using a technology common in the pharmaceutical industry. Known as chromatography, the technology has never been used to process large volumes of minerals.

ReElement said it aims this year to build the capacity to process 10,000 metric tons of germanium or other minerals. In a statement, ReElement CEO Mark Jensen said the company’s ⁠germanium production is “profitable ​at any volume.” ReElement received a $25 million Pentagon investment earlier this month.

Another company, USA Rare Earth, spent more than five years studying chromatography before pivoting to solvent extraction, ​a source with direct knowledge of the company’s strategy said. USA Rare Earth, which is building a South Carolina magnet facility, declined to comment on its processing research.

Elsewhere, Energy Fuels, which last month received a $725 million Pentagon loan, plans to be processing small amounts of rare earths by the end of the year and 6,000 metric tons annually by 2029. ​It is buying an existing US magnet producer.

Ucore, Energy Fuels and ReElement have each agreed to supply rare earths to magnet maker Vulcan Elements, which is building a North Carolina manufacturing plant, slated to open by 2030.

(By Ernest Scheyder and Jarrett Renshaw; Editing by Veronica Brown and Claudia Parsons)

Trump signs order on export curbs to retain critical minerals

Bloomberg News | July 30, 2026 | 

US President Donald Trump speaking with Cabinet members in March. Credit: U.S. Secretary of Agriculture | X

President Donald Trump signed a measure Thursday that gives officials authority under the Defense Production Act to implement export restrictions on some industrial waste in a bid to retain critical minerals and rare elements contained in those products.

The move is the latest effort by the Trump administration to shore up supplies of critical minerals, which are crucial to producing a range of cutting-edge technologies and products, and to reduce US dependence on China for those elements.

The presidential determination gives the Commerce secretary authority to institute export restrictions on recoverable critical minerals and materials, or CMMs, according to a White House fact sheet.

The US holds substantial CMMs in finished products such as magnets and lithium ion batteries. Those minerals and materials can be “reclaimed and recycled” from those goods, according to the White House.

Trump’s proclamation marks his latest use of the Cold War-era Defense Production Act to buttress US supply chains and industry. He’s previously tapped authorities under the law to renew oil production off the southern California coast and to support domestic coal power plants.

The DPA allows presidents to take unilateral actions to bolster US national defense capabilities, including by directing private-sector companies to expand production of critical industrial materials.

While Trump set the stage for aggressively using the DPA to support American energy and critical minerals development with a declaration his first day in office, he’s far from alone in seizing the statute’s robust authorities. Former President Joe Biden also invoked the law to bolster energy technology, with the aim of boosting domestic production of solar panels, transformers, heat pumps and fuel cells.

Rare earths have gained outsized importance since last year when China placed export controls that rattled US manufacturers. Reopening access to critical minerals and rare earths was a central focus of a broad trade deal the US and China eventually reached that eased tariffs on goods and curbed some export restrictions.

Despite that detente, the Trump administration has moved to secure alternative sources of those minerals.

(By Jennifer A. Dlouhy and Skylar Woodhouse)