Good morning,

This is the Thursday morning edition of The Intel Brief, where I cover key updates from the week. Let’s begin.

Reporting Period: 26-29 May 2025

Bottom-Line Up Front:

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NATO Secretary General Anticipates Increase To Member Defense Spending Requirement

Summary
On May 26, NATO Secretary General Rutte stated that he anticipates an increase in the defense spending requirement for member states. Currently, NATO members are required to spend 2% of their GDP on defense. Rutte believes a new requirement, close to 5%, will be approved by The Hague during the NATO Leaders’ Summit in June.

Findings

• Background: Russia’s invasion of Ukraine in 2022 urged NATO members in Europe to reconsider their defense efforts. In July 2024, The Atlantic Council reported that only 23 of 32 NATO members met the 2% GDP requirement, including new members Sweden and Finland.
  Since taking office in January, President Trump has pressured NATO to increase its defense spending and for Europe to be more responsible for its security.

• Rutte’s Remarks: On 26 May, speaking in a Q&A after the NATO Parliamentary Assembly in Dayton, OH, Rutte stated he expects the alliance to approve an increase to the defense spending requirement. Rutte stated he expects the new requirement to be “considerably north of 3 percent” and closer to 5%.

• Specifics: POLITICO reported that Dutch Prime Minister Schoof clarified some details, claiming 3.5% of that increase would be for direct military spending, while 1.5% would be allocated for infrastructure and cybersecurity.

Why This Matters
While NATO officials and members seem open to the defense spending requirement, the sudden increase raises questions about feasibility. Greece, for example, already stated it will not be able to meet the requirement if instituted despite currently contributing more than 3% of its GDP on defense.

The same data from the Atlantic Council suggests there are at least 8 countries (Portugal, Italy, Canada, Luxembourg, Slovenia, and Spain) that may not reach the new target. Interestingly, you might see how their relative proximity to regional threats, specifically Russia, disincentivizes their quick surge in spending.

The Intel Brief assesses that it is very likely that the 5% GDP defense spending gets approved in June due to widespread conceptual support, but that the alliance will have trouble enforcing the change.

Sources: POLITICO, Atlantic Council, NATO

Tensions Risk Undermining U.S.-Iran Nuclear Talks

Summary
The U.S. and Iran are advancing denuclearization talks despite mixed messaging from the White House and mainstream media. President Trump has stated a deal is close, while Tehran has stated it will not dismantle its uranium enrichment program. Israel has expressed concerns over Iran's nuclear activities and has indicated the possibility of unilateral military action. The U.S. has urged Israel to refrain from such actions to allow diplomatic efforts to proceed. Iran, in turn, has issued warnings against potential Israeli strikes, emphasizing its readiness to respond.

Findings

• U.S.-Iran Nuclear Talks: Last week, the U.S. and Iran concluded a fifth round of nuclear talks in Rome, Italy. U.S. officials have stated their optimism in reaching a deal despite Iranian officials stating concerns over their uranium enrichment. Right now, a possible deal is looking like IAEA inspections, similar to the previous Iran Nuclear Deal.

• Future Israeli Actions: Israeli officials have reportedly conveyed to the Trump administration that they might carry out strikes on Iran's nuclear facilities with minimal warning, potentially within seven hours of notification. This has raised concerns in Washington about the possibility of unilateral Israeli military action undermining diplomatic efforts.

• U.S. Military Posture: Despite concerns that Israel may launch a unilateral campaign against Iran’s nuclear facilities, Newsweek reports that the U.S. is continuing to deploy forces to the UK-administered Diego Garcia island in the Indian Ocean.
  Reporting claims there are 4x B-52 bombers and 6x B-2 stealth bombers deployed to the island, as well as KC-135 tankers.

• Iran's Stance and Warnings: Iran's military leadership has warned of a decisive response to any Israeli "mistake," referencing previous operations like "True Promise" as examples of its retaliatory capabilities. Major General Abdolrahim Mousavi stated that Iran is fully prepared to deliver a significant blow if provoked.

Why This Matters
The current dynamics among the U.S., Israel, and Iran present a complex challenge to regional stability. While the U.S. pursues diplomatic avenues to address concerns over Iran's nuclear program, Israel's apprehensions and potential for unilateral action introduce risks of military escalation. Iran's warnings further heighten tensions, indicating a readiness to respond to perceived threats. The situation underscores the delicate balance between diplomacy and deterrence in addressing nuclear proliferation concerns in the Middle East.

Sources: The Times of Israel, Newsweek, Mehr News Agency

China Continues Expanding Its Footprint In South America Amid Great Power Competition

Summary
On 27 May, the Global Times announced that China, Peru, and Brazil are advancing plans for a transcontinental railroad in South America. It highlights China’s growing footprint across Latin America through substantial investments, strategic partnerships, and large-scale infrastructure projects. Beijing is deepening its influence to compete with the U.S.’s historical dominance and strategic freedom in the region.

Findings

• Transcontinental Railway Initiative: On 27 May, the CCP’s Global Times announced that Peru is coordinating with China and Brazil to advance a cross-continental railroad connecting Peru's Pacific coast with Brazil's Atlantic coast. This bi-oceanic railway aims to facilitate more direct trade routes between South America and China.

  • Chancay Port Development: China's COSCO Shipping Ports Ltd. has constructed the Chancay Port in Peru, a $1.3 billion project inaugurated in November 2024. This port serves as a critical hub for China's trade with South America.

• Strategic Partnerships: China has established comprehensive strategic partnerships with multiple Latin American countries, focusing on sectors such as energy, mining, and agriculture. Many of these are tied to Xi Jinping’s Belt and Road Initiative.
  A segment by New Tang Dynasty discussed the dual use (commercial and military) of this infrastructure and how it could be used to disrupt U.S. military strategy during conflict.

  • Trade Growth: The Global Times reports that trade between China and Latin American and Caribbean (LAC) countries surpassed $500 billion in 2024, marking a more than 40-fold increase since the early 2000s.

Why This Matters
China’s expanding presence in South America marks a rapid change to the regional status quo due to Beijing’s direct challenge to Washington’s historic influence over the region, and the speed at which it has made itself a key economic partner there.

U.S. policymakers should also grow concerned about the dual use of China’s commercial investments, particularly ports and mines. China’s influence over key ports, and even key waterways such as the Panama Canal, could disrupt the U.S. military’s ability to conduct theater deployments (especially in a Taiwan conflict scenario).

Sources: NTD, Brazil Energy Insight, Global Times

End Brief

That concludes this brief. Thank you for reading.

As a reminder, The Intel Brief may not publish briefs from 1-15 June due to my absence. Publication will be dependent on my access to electricity and the internet.

Thanks for understanding!

Nick