DODGING THREE BULLETS

The limit of our imagination is being tested

Four years ago, in early February 2022, the Russian preparations for a full-scale invasion of Ukraine were widely documented, and most foreign affairs and military experts, incl. US and NATO officials, warned that the risk of war was very high. At the same time, the risk estimates by business and financial analysts where significantly more optimistic, two examples being predictions by BCA Research and Amundi asset management who both had the risk of war at 10% shortly before the invasion began. Within business and finance, we are often blindsided by wishful thinking, confirmation bias and lack of imagination. Looking into the geopolitical abyss of 2026, Nordic and European companies need to face reality and prepare for what used to be unthinkable. 

Wargaming What if…?

Over the years, my colleagues and I have had the pleasure of supporting multiple companies with facilitation of wargame sessions about “what if…?”. From expert workshops identifying and unfolding approaching trends, risks and scenarios, to large scale sessions pressure testing strategy assumptions or competitive landscapes at global leadership summits. We use the game-based approaches to design and facilitate meaningful conversations where we can change perspectives and step into the shoes of clients, competitors, patients, opinion leaders etc. The purpose is never to predict exactly how the future will unfold, but rather to train and expand our collected capability for imagination and empathy.    

Starting with the Arabic Spring in 2010 and the first Russian invasion of Ukraine in 2014, many of the wargaming sessions have addressed geopolitical issues and emerging threats, combing the diplomatic, military and business perspectives. Some have been internal war games for a specific corporate client, while other sessions have combined participants from multiple industries and backgrounds. Our latest wargames have explored the future of Taiwan, the ongoing global trade wars, Europe’s competitiveness, and the outlook of Trumps’ presidency. There has been plenty to discuss.

Dodging three bullets

Inspired by (or perhaps more precisely, frightened by) the recent geopolitical discussions and wargaming sessions that I have been part of, there are three imminent threats that are keeping me up at night - three approaching geopolitical bullets that we need to take deadly serious and dodge if we can. The three threats are well known and debated in the media, but based on my experience, most business leaders and policy makers still have a tendency to underestimate both the likelihood and the potential impact.

Bullet #1: The caving in of American democracy

The hard truth is that we are currently witnessing, in real-time, the unravelling of the USA that we used to know. The storm on Congress on January 6, 2022 looks more and more like a point of no return. As documented and testified by former special counsel, Jack Smith, and countless others, a premeditated attempt was made to violently hinder the democratic transition of power - police officers were killed on duty and the Vice President only narrowly escaped capture. A deadly attack at the very heart of democracy – surely, American society and institutions would react, ensure swift justice and prevent any repetitions. But the immune system of America failed miserably. We are now one year into the second Trump presidency with almost unfathomable implications both domestically and abroad.

It is becoming more and more unlikely that Trump and his supporters will accept losing power in the upcoming midterm elections or ultimately, in the presidential race in 2028, and there is a real risk that America is accelerating towards either totalitarian dictatorship or major civil unrest/war. In both cases, the humanitarian suffering and despair in a country of approximately 350 million people will be hard to comprehend.

If we consider the economic and business aspects, all the relevant wargames I have been involved with ended with the US economy imploding before the end of Trumps current term. A cocktail of tariffs boosting inflation, disruption of trade and investments, and draconian anti-immigration policy is hard to stomach for any economy. But the biggest threat is the accelerating national dept and declining faith in the dollar as reserve currency. Even before Trump signed the Big Beautifull Bill last year, USA was spending more on paying interest on their national dept than they spend on their military (which isn’t a small number). USA has traditionally been able to borrow money very cheaply to cover their dept, but that privilege has already started to evaporate. Trump’s persistent attacks on the independence of the US Federal Reserve are making things worse, and there is a real risk that the dollar will implode, and USA will struggle to honour its debt before the end of Trump’s second term. 

How likely is this bullet to hit?

Not insignificant, and my best judgement is that the probability has risen quite a bit in the first weeks of 2026 where Trump has managed to alienate longtime allies, spark resistance within the Republican camp, and create plenty of good excuses for anybody who might be considering moving business and investments away from USA.

Optimists can point to numerous sobering arguments – Trump inherited a solid economy from Biden, the US stock market has not collapsed yet, perhaps AI will soon kickstart a new golden age of efficiency, America is supposed to have a strong democratic culture that has braced constitutional crises before, etc. And we must never forget that the USA is huge - for many Americans, politics and economy at national level is a very distant thunder. But I’m not an optimist, and it has been hard to find optimistic voices on America in the wargaming discussions I have facilitated. USA is on a frightening trajectory, and things will likely get worse before we can have any real hope of relief.    

What will the impact be for Nordic and European companies?

Companies that are directly engaged in USA must consider a range of hard questions – How will we respond if Trump cancels the midterm elections by declaring martial law (or similar shenanigans)? How will our business be impacted if the US stock marked collapses, or the dollar drops significantly in value? How exposed is our business to Trump’s impromptu retaliatory tariffs/sanctions or to the potential countermoves by EU or other countries? Where are the “red lines” of our personal or company values?

But no company will be untouched - the American economy has been a key driver of the world economy for decades. A severe US downturn will affect all markets, industries and countries. Try to recall the global financial crisis of 2008 and hold that thought. If this bullet hits, we might be looking back on those years as happy times.

Bullet #2: The fall of Taiwan

It has been widely published that President Xi Jinping of China has instructed the People’s Liberation Army to be ready by 2027 to conduct a successful invasion of Taiwan, and China’s official ambition of regaining control of the seditious island has been firmly stated for years.   

In November last year, I was part of a wargame exploring how a possible Chinese takeover within Trump’s current presidency could unfold. Instead of an outright military invasion, we focused on a more clandestine scenario where China used similar tactics to Russia’s ‘maskirovka’ (‘little green men’) operations. That scenario showed that the ability for Taiwan, USA or Europe to deter or counter such a takeover is limited. China holds significant leverage over both USA and Europe in regard to rare earth minerals and deep supply chain integration where many companies are way beyond the point of no return when it comes to retraction from the Chinese economic ecosystem. One example is the German car industry which will halt within days without parts from China.

If USA wanted to, they could counter the Chinese plans by deploying military forces and escalating the conflict to outright military confrontation. Multiple wargames have been run on the outcomes of a large sale military confrontation around Taiwan and to my knowledge, the conclusion of almost all of them is, that USA with the support of Japan might prevent a successful Chinese amphibian invasion but it would be at a terrifying cost. There would be thousands of casualties, and American losses would include countless major warships, two carrier groups, and hundreds of aircrafts (most of which would be destroyed on the ground by long-range Chinese missiles).

Within a few weeks, or even days, of fighting, USA would run out of critical long-range missiles (US currently has access to a bit more than 4,000 of these missiles, LRASM and JASSM-ER), and even if America won the confrontation, it would take years to replenish the missile stockpiles, leaving USA unprepared for future confrontations. A critical factor to consider is that US missile production is highly dependent on materials and components from China which today is the biggest foreign supplier to the US military. Without support from China, it would take even longer for the US military to recover from a kinetic confrontation around Taiwan.    

Considering these circumstances, and the current return to the Monroe-doctrine by Trump’s White House, it seems more and more unlikely that USA will stand by Taiwan when it counts.

A final factor, adding complexity to the situating, is Taiwan’s unique status when it comes to the production of high-end microprocessors used for AI. Taiwan produces over 90% of the world's most advanced (sub-10nm) microprocessors, primarily driven by Taiwan Semiconductor Manufacturing Company (TSMC) which holds a dominant position in high-end logic chip manufacturing for companies like Apple, Nvidia, and AMD. Overall, Taiwan controls roughly 60% of total, global, semiconductor output. If China got control of this vital production, President Xi would gain unprecedented leverage over USA and Europe. And even a temporary disruption of the supply of microprocessors would send a shock through the world economy.

How likely is this bullet to hit?

The acclaimed historian, Niall Ferguson, stated in March, 2025 that he was absolutely certain that China would make a move on Taiwan within Trump’s current presidency. I don’t have the confidence to be absolutely certain about anything, but it is hard not to agree that the risk is real.

As I see it, Trump’s recent global endeavours are both lowering and increasing the odds, depending on how things are perceived in Beijing. On one side, Trump’s actions and statements towards Venezuela and Greenland have made it clear that the current American administration has little regard for international law or the sovereign right of nations – how can he credibly criticise China for something that he is basically doing himself? On the other side, I’m sure that President Xi knows his Sun Tzu – “He who is prudent and lies in wait for an enemy who is not, will be victorious.”. In the past year, President Trump has effectively uprooted decades of American diplomacy and alliance building, thereby making China by comparison look like a beacon of reason, stability and rule of law. Things might simply be going too well for China at the moment for Beijing to risk jeopardising everything for the sake of short-term control of Taiwan.

What will the impact be for Nordic and European companies?

It all depends on the speed and subtlety of the Chinese strategy, and the immediate reaction by USA and Europe. The best-case scenario is probably a discreet and fairly peaceful takeover, along the lines of a ‘Hong Kong model’, where China will formally gain control within a timeframe. This solution will allow daily life and business operations to continue uninterrupted, and it will be easy for Europe and USA to turn the blind eye to the fact that 23 million people is losing their freedom and civil rights.

A more concerning scenario from a Nordic or European business perspective is a prolonged crisis, incl. a blockade of Taiwanese ports, internal unrest and sanctions and counter-sanctions between China and USA/Europe. I think most European companies operating in China are well positioned to weather a short-term storm, but there is also the possibility that a crisis will lead to a prolonged fracture in Chinese and European relationships. European companies might be faced with the tough choice of choosing if they want to be inside or outside of China’s far-reaching economic and technological ecosystem. In our wargame, Europe didn’t have the appetite for standing up to China for long, but who knows, perhaps we will be surprised by the feistiness of our real-world politicians.

Bullet #3: Putin’s Gambit

Last year’s official threat estimate by the Danish Military Intelligence stated that:

“Since 2022, alongside its war effort in Ukraine, Russia has initiated a major reconstruction and reform of its military forces. Over the course of 2024, this effort has changed in character from reconstruction to an intensified military build-up, with the objective of being able to fight NATO forces on equal terms. Economic and material support from China, as well as support from North Korea and Iran in the form of troops and weapons systems, increasingly contributes to freeing up resources for Russia’s military build-up vis-à-vis NATO.

Russia sees itself as being in conflict with the West and is preparing for a war against NATO. This does not mean that a decision has been taken to initiate such a war, but Russia is rearming and building the capacity to be able to take that decision.”

The assessment is that after end of major hostilities in Ukraine, Russia will be ready to conduct a local war within 6 months, a regional war within 2 years and a large scale confrontation within 5 years. If that estimate is correct, it means that if we have a ceasefire in Ukraine this year, Putin will be ready to seriously test NATO’s resolve before the end of Trump’s current term. In several ways, 2028 will be the perfect window for Putin if he desires to make a grab for Estonia, Svalbard or another piece of NATO territory. Within that timeframe, only a fraction of the current European rearmament will have materialised as real capabilities, and with Trump in the White House, it is fair to say that the American backing of NATO’s Article 5 is questionable.    

So how might a Russian attack unfold? A classic start would be internal unrest in the eastern parts of Estonia with accusations of government discrimination against the country’s Russian-speaking citizens. Shortly thereafter, armed volunteers (‘little green men’) would emerge to defend the Russian minorities. Skirmish fighting would begin whereafter the Russian minorities would claim local independence and ask Russia for help and protection. Russian forces would cross the border to probe NATO’s resolve while claiming that their actions are solely of a defensive and humanitarian nature. And then comes the real test: will all 32 NATO members outright declare war in solidarity with their small, Baltic brother? And those that do, will they mobilise for real and send their soldiers to the new front line? If NATO hesitates, it is not unlikely that Russia will be able to take full control of Estonia in one or two weeks. And then it will be NATO who is in the offensive role which is normally very costly in casualties.  

How likely is it this bullet to hit?

It all depends on three things: how the war in Ukraine ends, if Putin is willing to make a final gamble to enshrine himself in the chronical of Russian imperialism, and how Moscow perceives the willingness in Washington to stand by NATO. I have zero faith in Putin or Trump so for me, it all comes down to supporting Ukraine and helping them ensure a just victory. In this way, it is fair to say that “NATO is already at war with Russia”, and to be cynical. Iit is currently in the best interest of Europe for the Ukrainian war to continue for as long as it can with high levels of Russian casualties and a steady weakening of Russia’s military-industrial complex and energy exports.    

Peter Apps, Reuters' Global Defence Commentator and author of the upcoming book ‘The Next World War: The New Age of Global Conflict and the Fight to Stop It’ puts the risk of a clash with Russia at approximately 30%. For me it seems a bit high - the Ukrainian fighting spirit and ability have continued to impress in the past four years, and I’m betting on Ukrainian stubbornness to outlast Russian resilience. But things can quickly change in our interesting times.  

What will the impact be for Nordic and European companies?

If a Russian attack evolves into a prolonged military confrontation, the societal consequences will be significant and all-embracing. I think very few Europeans (except for the Fins, the Ukrainians, and perhaps the Poles) fully understand what it is to be at war. In the case of Denmark, imagine Russian cyberattacks creating prolonged blackouts, airports, power plants and bridges hit by ballistics and supersonic missiles, hundreds of casualties from sunken warships, panic as thousands of refugees try to leave the major cities, government seizing control of key industries, etc.   

We might wish for a quick ending, but if Europe accepts a swift peace on Putin’s terms, the long-term consequences can turn out to be disastrous. Both NATO and EU would likely break apart, and Moscow’s shadow would engulf Eastern Europe, the Arctic, etc. for generations… 

Brace for impact and stand up for democracy

There is nothing secret or clandestine about the three bullets, Trump, Putin and Xi have all consistently been outspoken and direct about their maximalist aspirations. “We never knew…” is out of the questions as a future excuse.

And the three bullets are connected. If one hits, the odds of additional hits increase significantly. According to Peter Apps, there is a real risk that Russia will use a confrontation around Taiwan as distraction for an offensive operation towards NATO. But it might also be the other way around; President XI taking advantage of trouble in Europe to grab Taiwan.

And that leaves us with the question of Trump. Wishful thinkers might argue that his unique style of foreign policy creates a state of strategic ambiguity that will deter China and Russia from radical actions – for example, who knows what his threshold really is for the use of tactical nukes? But I think, unfortunately, that the recent lessons in Moscow and Beijing are quite the opposite – Trump has consistently shown (most recently with Greenland) that he backs down when he meets serious pressure (as they say ‘TACO – Trump Always Chickens Out).

So, what can we do, besides bracing for impact and hoping for the best? We can do a lot. Europe is immensely resourceful, and Scandinavia even more so. The only reason why we are in peril now is that we have allowed ourselves to lower our guards and take our freedoms for granted.

First of all, we must defend democracy and the rule of law at home and abroad. Totalitarian movements are on the march across Europe, and all odds become much worse if right wing parties like Alternative für Deutschland or Rassemblement National get control in a major European countries. And we must do what we can to support progressive forces in USA. A lot will change for the better if Trump and MAGA loses control of the house in the midterm elections later this year. I know that companies prefer to stay outside of politics (except for discreet lobbying), but this is the time for companies to consider all creative ways that they might support democratic values and rule of law. 

Secondly, we must support Ukraine with all that we’ve got. Preventing Putin from winning is the single most efficient way to avoid at least one of the incoming bullets. And with some luck, a failure for Putin in Ukraine might deflate President Xi’s dreams about swift military adventures. Companies have many ways to support Ukraine, and many businesses are already doing admirable work. But we need to scale those efforts.

Thirdly, there is the long-term task of improving Europe’s autonomy and strategic competitiveness. For now, both China and USA wield immense power over Europe and our companies by controlling key materials, supply chains and technologies. We have allowed ourselves to be unable to produce batteries, cars, solar cells, smartphones, heat pumps, etc. without help from China. And the technology stacks in our government institutions and corporations are bloated with American code.

Try to imagine a future conflict with USA, perhaps over Greenland, where American tech companies are forced by their government to halt services for selected European companies? How would your company be impacted if the full Microsoft package, incl. Teams, was suddenly offline? Or if all company iPhones went dead? Or if all payments by Mastercard or VISA stopped? Or if all company services powered by US-based AI shut down?

It will take a long time, but European companies, pension funds, investors and governments need to invest in Europe’s own innovation and development. Currently, European investors hold over $10 trillion in U.S. stocks and around €300 billion in European savings flow to the U.S. yearly. It is one thing is to be outcompeted, but being outcompeted by funding our competitors with our own capital is simply embarrassing.

We can do better.