More on the Syria fallout. U.S. officials on Thursday said President Donald Trump’s order for a quick withdrawal of U.S. troops from Syria will also include an end to the U.S. air campaign against the Islamic State. Details remain vague at this point; U.S. Central Command said merely that the air campaign would continue so long as U.S. troops are on the ground. But defense leaders from nearly every partner in the U.S.-led coalition combating the Islamic State – including Israel, France, the U.K., the Netherlands and Germany (most of which vowed to remain in Syria), as well as U.S. lawmakers and senior defense officials – voiced concern about the speed of the move. The main critique: The job isn’t quite done yet. Kurdish officials, meanwhile, warned that the loss of U.S. air cover would force them to effectively abandon the fight against the Islamic State, so they could shift resources north to counter the impending Turkish offensive, potentially allowing IS forces to reconstitute. According to one Kurdish official, this would force the Syrian Democratic Forces to release more than a thousand IS detainees. Given all the opposition to the move from inside the U.S. and out, it’s not hard to see the U.S. withdrawal timeline getting pushed back quite a bit. But it’s clear that the U.S. campaign will not be open-ended.

On U.S. allies and credibility. Concern about the U.S. move to leave Syria was compounded Thursday by the announcement that U.S. Defense Secretary James Mattis will resign in February. One man won’t fundamentally alter the U.S. strategic course. We’ve been saying for years that the U.S. is overexposed and would seek to shift more of the security burden to allies and partners and manipulate global affairs from afar. Geopolitical structures are only as sustainable as the alignment of interests underpinning them. But Mattis’ resignation letter, in which he lambasted Trump’s apparent disregard for the value of long-standing U.S. alliances and diplomatic prowess, will only deepen the sense that the U.S. is a capricious and distracted power. Whatever the merits of the U.S. moves to recalibrate its global strategy, they are already creating vacuums of power that friends and foes alike are scrambling to fill. Along these lines, it’s worth noting that Philippine Defense Minister Delfin Lorenzana announced that Manila would re-evaluate the U.S.-Philippine Mutual Defense Treaty due to Washington’s continued refusal to confirm that it covers Philippine-claimed parts of the South China Sea. Meanwhile, North Korea’s explicit demand yesterday that U.S. troops withdraw from South Korea, if not the entire region, was partially an attempt to gauge just how far and fast the Trump administration is willing to accelerate the U.S. recalibration.

On Chinese stimulus. On Friday, the Communist Party of China concluded its annual Economic Work Conference – China’s most important economic planning meeting of the year. We’ve been watching for signs of just how wide Beijing would open the stimulus spigots as it grapples with a major slowdown stemming from its sweeping deleveraging and financial de-risking campaigns, as well as the trade war with the U.S. China is keen to avoid at all costs the fire hose of fiscal and monetary stimulus it unleashed following the 2008 crisis – which was a major contributor to many of the debt problems it’s racing to rein in today. But with 2019 looking pretty ugly – especially if the global slowdown picks up pace, as we expect it will – it may not have a choice but to go big. On Friday, Beijing announced a handful of small measures such as tax cuts and signaled that more are likely to come. What’s most notable is the shift in tone. For most of the past year, to emphasize just how serious it was about its crackdowns on lending and debt, it has sought to dash any expectations that it would do what it has always done and quickly return to stimulus at the first sign of trouble. Now, with worsening business sentiment and consumer confidence accelerating a slowdown in investment and spending, Beijing is scrambling to make the case that it will come to the rescue after all.

Honorable Mentions

  • The U.S. military has been ordered to begin planning to withdraw about half its troops in Afghanistan, an unnamed Pentagon official told the Wall Street Journal.
  • China’s Belt and Road Initiative plans in Pakistan include a proposal to expand joint production of Chinese fighter jets, according to a plan leaked to The New York Times.
  • The U.S. Justice Department on Thursday announced the indictment of two Chinese government hackers who allegedly targeted 45 companies and agencies in a dozen countries.
  • The Israeli military on Thursday began its operation to seal off four tunnels that it said had been dug by Hezbollah under the border with Lebanon.
  • The Russian population is reportedly on track to decrease for the first time in a decade. Births in Japan, meanwhile, will hit a new low in 2018, falling below one million live births for the third consecutive year.