In Geopolitics Today - Friday, September 10th
Serbia In Talks to Buy Missiles From Israel and The United States Undergoing Major Supply Chain Regulation
Serbia In Talks to Buy Missiles From Israel
Serbia is modernizing its outdated defence equipment, most of which is old technology inherited from Yugoslavia. Serbia’s military modernization drive comes at a time when its defence industry is growing and undergoing transformations of its own. Serbia’s defence industry consists of roughly 200 companies and research institutes, and generates over €500 million a year as it produces all kinds of weapons, except for high-end armaments. For more sophisticated weaponry, Serbia is turning to Israel as it seeks to secure a purchase of SPIKE missiles.
Serbia increasingly purchases arms from a variety of partners. Serbia has recently chosen to purchase drones from China, the Mistral air-defence system from France, as well as MIG-29 fighter jets from Russia. On top of this diverse set of partners, the United States has consistently been one of the largest military donors in Serbia since 2018. The political alignment of the countries Serbia sources its advanced weaponry from appears to make no difference to Belgrade.
The SPIKE missile is an anti-armour missile offering tactical precision for air, ground and sea operations. Serbian President Aleksandar Vucic has said that Belgrade intends to expand military relations further via the purchase of such weapons from Israel. But despite their capabilities, equipment such as these SPIKE missiles in Serbian hands are likelier to be instruments of a political powerplay rather than conventional military operations. A country surrounded by NATO member states, Serbia has little use for such missiles on a battlefield, but may find them a useful political tool able to achieve policy goals in other areas.
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The United States Undergoing Major Supply Chain Regulation
The US is embarking on a drastic supply chain regulation effort the likes of which has not transpired since the Cold War. Earlier this year, the Biden administration issued Executive Order 14017, under which four key areas of industry are placed under scrutiny: semiconductor manufacturing and advanced packaging; large
capacity batteries; critical minerals; pharmaceutical ingredients. The reason is cited to be the geopolitical risks stemming from Chinese access to strategic goods.
The state supported investment evident in the semiconductor industry of China is now being mirrored by similar investments in the US. At the same time, trade restrictions aimed at limiting China’s advanced semiconductor capabilities now on the table. China needs ongoing access to US technology to continue to build up their industry, but the US now sees its supply chains as incompatible with China. The restrictions are also spreading to Chinese energy technology as well, with US analysts looking for chokepoints where China relies on foreign technology.
There is an imbalance of power between China and the US semiconductor chip ecosystems. The US has a dominant influence over equipment and design software, which China is ill prepared to match. China has few options to retaliate without inflicting significant damage on their own industry too, so the margins are tight. While China does have significant investments in rare earths and chip assembly, and Beijing could disrupt the foreign chip market somewhat by cutting off its supply, it would likely not be enough to dissuade the US and its allies who are already replacing Chinese capacity.
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