U.S. Navy Sailors set the sea and anchor detail while transiting Souda Bay, Greece, June 8, 2026. (U.S. Navy, Mass Communication Specialist 1st Class Brandon Williams-Church)

1. Saudi Arabia, Turkey, and Pakistan’s new Mecca Defense Pact is more economic cooperation than mutual defense. Regional actors are looking for alternative security and energy agreements to offset the volatility caused by Iran. It’s a reminder that Washington should refocus on the India-Middle East-Europe Economic Corridor (IMEC), a U.S.- and Gulf-backed energy security plan that cuts out hostile governments.

• Mecca pact unpacked: The agreement commits each state to treat an armed attack on one as an attack on all. But will they? Just two days after signing, Iranian-backed Houthi forces struck a Saudi oil refinery, yet it drew no collective response. This has also been the case with Saudi Arabia’s other mutual defense agreements. Neither its pact with Pakistan in 2025 nor the Gulf Cooperation Council in 2000 has produced anything resembling a collective response, despite attacks on Saudi Arabia by Iran and its proxy militias.
• The pact’s true value: While it is light on security substance, the economic logic underlying the agreement is far more consequential. Members are planning economic integration projects to create alternative infrastructure networks, including a Saudi-Turkish railway connecting the Gulf with Europe that would notably bypass Israel, the UAE, and Greece. These same three countries anchor IMEC. “If the Mecca Accords endure, they could become the security framework that ties together economic and energy projects that would ultimately have adverse consequences for the countries left outside of it,” warn FDD’s Sinan Ciddi and Ahmad Sharawi.
• The value of IMEC: IMEC is part energy alliance, part security coordination, and it includes India, the United Arab Emirates, Israel, Greece, and Cyprus. It is also a tool to advance countries normalizing ties with Israel. “If fully implemented, IMEC would connect Indian ports to the Persian Gulf by sea, move cargo and energy across the Arabian Peninsula on the ground, and then ship it from Israel to Europe,” explains FDD’s Jonathan Schanzer. “All the players here are American allies. IMEC would thus be an innovative expression of a U.S.-aligned regional order.” Saudi Arabia is also a signatory to IMEC and understands that it is the better bet, but Schanzer explains that it’s hedging amid uncertainty.
• The safer corridor: For all its ambition, the Mecca bloc reaches back to old alliances rather than the more stable options now taking shape in the region, FDD Action’s Tyler Stapleton tells us. IMEC’s lasting edge over the corridors the Mecca members envision is that it avoids hotspots like Iran and Syria, allowing for safer infrastructure development and fewer disruptions. “While the Mecca Accord’s defense pact will be a mostly diplomatic tool, IMEC would rewrite the map of energy flows in the region, isolating authoritarian regimes like Iran and providing Europe an alternative to Russian energy,” Stapleton adds.
• Give IMEC a boost: Congress can strengthen IMEC and encourage broader regional participation by passing the Eastern Mediterranean Gateway Act (H.R. 3307 / S. 4443), which advanced out of committee in both the House and Senate earlier this year. Reliance on Russian and Iranian energy has long undermined regional stability. This bill, however, diversifies and secures energy flows through the Eastern Mediterranean by prioritizing regional cooperation agreements to institutionalize IMEC energy purchases and deliveries. Moreover, it would establish the Eastern Mediterranean as a U.S. foreign policy priority. It also has security benefits, prioritizing energy and defense projects for joint security infrastructure and strengthening strategic coordination with IMEC partners.
• Regional connectivity: As Saudi Arabia, Turkey, and Pakistan seek to create alternatives to IMEC, Reps. Brad Schneider (D-IL) and Gus Bilirakis (R-FL) led a letter to the State Department and U.S. International Development Finance Corporation underscoring IMEC’s centrality to the future stability and prosperity of the region. The members urged the agencies to prioritize the Great Sea Interconnector, an infrastructure project central to IMEC’s development. It would link the electrical grids of Greece, Cyprus, and Israel and provide additional reliability and cost savings to all three countries, Stapleton tells us. At a time when conflicts in Europe and the Middle East are disrupting energy markets, Washington should do what it can to bolster this alternative to infrastructure dominated by strategic competitors.

U.S. Sailors work on the flight deck of USS George Washington (CVN 73) as the aircraft carrier transits the Arabian Sea, Aug. 20, 2026. (@CENTCOM via X)

2. President Trump announced “unprecedented” economic warfare against Iran on Wednesday, just days after the 60-day negotiating window set by the June 17 U.S.-Iran MOU expired this week. We unpack what’s happening in the Strait of Hormuz as well as Iran’s economic woes, missile efforts, and support from U.S. adversaries 👇

• U.S. pressure at work: The announcement is confirmation that economic pressure is now Washington’s preferred weapon of war. The central tool in that pursuit has been the U.S. blockade on Iranian ports. Iran’s Central Bank confirmed on Wednesday that Iran’s oil sale revenues “have fallen to zero.” The same cannot be said for everyone. Energy Secretary Chris Wright announced an average of nine million barrels of oil are passing through the strait every day. This success is thanks to a covert U.S. operation to escort oil tankers through the waterway over the past several weeks. Meanwhile, the UAE announced it halted all trade and financial transactions with Iran, Iran’s currency has reached a new low, and polling is demonstrating Iranians’ ire with the regime.
• Don’t let up: Washington should stay the course while working with Gulf allies to further eclipse Iran, urge FDD’s Mark Dubowitz and Richard Goldberg. Between the U.S. covert operation, Gulf investments in expanding oil pipelines, Venezuelan oil exports, and record U.S. oil production, Dubowitz and Goldberg foresee the flow of energy could be liberated from rogue states’ manipulation. But that future has not yet arrived and may only come to fruition if Washington sees these developments through to completion. “That’s why President Trump needs to double down and resist the temptation to cut a deal with Iran that legitimizes its control over Hormuz,” the pair add.
• Payroll crunch: As Trump keeps the Iranian regime in what FDD’s Janatan Sayeh calls a “no war, no peace” limbo, the growing economic cost threatens regime stability. Importantly, the majority of the regime’s—now cratered—oil export revenues are used to pay security forces and other state workers, explains FDD’s Miad Maleki. Economic hardship among ordinary citizens is one thing, but Tehran’s attitude will likely shift once the Islamic Revolutionary Guard Corps and elites begin to feel the strain, he adds. Converging grievances have kept anti-regime momentum alive and can exacerbate rifts across armed institutions, further eroding morale, Sayeh notes. If Washington wants these grievances to create defections, personnel must have a path to break with the regime. At a bare minimum, Sayeh recommends a serious internet access and public messaging strategy.
• The missile threat: Even as the regime faces economic turmoil, recent reporting reveals that Iran has renewed ballistic missile production capacity. Now, FDD’s Behnam Ben Taleblu says American policy might have to adapt to a scenario in which Iran duplicates its above-ground production capabilities deep underground. According to previous reports, Tehran was able to access underground missile depots entombed during Operation Epic Fury. Beyond pursuing weapons capable of penetrating these facilities, Taleblu explains the long-term solution lies in targeting the supply and demand sides of the equation. Targeting the demand side requires “a long-term strategy to undermine the regime and its hold onto power,” Taleblu says. On the supply side, that means intercepting materials destined for Iran’s missile program, especially from Beijing and Moscow.
• The wider axis: China and Russia’s growing support for Iran has increased its resilience, lethality, and leverage, warn FDD’s Bradley Bowman and Cameron McMillan. Moscow has provided valuable drone and intelligence support to enable Iranian attacks on American military positions. Meanwhile, Beijing has supplied dual-use materials for Tehran’s ballistic missile program and a surveillance satellite of its own. Washington should block and deter China and Russia from propping up Iran, urge Bowman and McMillan. This should include imposing sanctions if Beijing provides Iran with weapons systems or significant military components. Washington should also interdict Chinese chemical shipments that boost Iran’s ballistic missile program. Finally, Congress should require an annual intelligence report detailing Beijing’s dual-use support to Iran to be shared with U.S. partners.

A U.S. Marine shows a member of the Republic of Korea Marine Corps how to operate the M240B machine gun, Pohang, South Korea, Jul. 27, 2026. (U.S. Marine Corps photo by Lance Cpl. Madison Plos)

1. President Trump ordered the Pentagon to “substantially reduce” combined military exercises with South Korea. In truth, the U.S. military should be doing the opposite and increasing military coordination with Seoul.

• Cutting important exercises: The U.S. and South Korea’s two major annual combined exercises enhance the readiness and interoperability of the two armed forces. These exercises and other aspects of the military-to-military relationship also send a powerful deterrent message to Washington and Seoul’s shared enemy: North Korea. Reducing the frequency of these exercises “is a risky move that lowers coalition readiness and puts U.S. forces at risk with no real tangible benefit to the United States,” explains FDD’s RADM (Ret.) Mark Montgomery.
• North Korea is the aggressor: Despite South Korean President Lee Jae-myung’s attempts to bring stability by proposing peace talks and pursuing a nuclear-free peninsula, North Korea is ramping up its aggression. Pyongyang is actively building up its military, including launching two nuclear-armed destroyers and hardening southern border defenses, warn FDD’s Logan Rolleigh and Ryan Brobst. What’s more, Moscow is helping Pyongyang modernize its military tactics and ballistic missile accuracy, increasing the danger that those capabilities will be used against the United States, South Korea, and Japan.
• Expand the exercises: To strengthen deterrence against North Korea, Washington should instead expand combined exercises with Seoul and work to integrate Japanese forces as well, advise Rolleigh and Brobst. Doing so would bolster combined deterrence against North Korean aggression and make a future conflict less likely. Moreover, Congress should “oppose any efforts to reduce U.S. military posture on the peninsula,” by making clear that it expects the administration to fully follow Sec. 1255 of the FY2026 NDAA, the pair add. Lawmakers should further require reports on Russia-North Korea security cooperation and on whether U.S. war plans account for growing North Korean capabilities.
• Axis of Aggressors: Moscow and Pyongyang’s military collaboration, however, is not a one-way street. Kim Jong Un has backed Putin’s war on Ukraine with ammunition, troops, and missiles. North Korea is just one node in a broader coalition of American adversaries—including China, Russia, and Iran. FDD’s Bradley Bowman, Elaine Dezenski, and Montgomery lay out this convergence in their new book, Axis of Aggressors.

The table at high-level U.S.-China trade negotiations, hosted at the residence of the Swiss Ambassador to the United Nations, Geneva, Switzerland, May 11, 2025.

2. In a new report, the White House accused over 40 countries of participating in a “global Shadow Transshipment Network” as the Trump administration expands trade barrier enforcement. Washington can begin to address this by closing some of the legal loopholes that let adversaries undermine U.S. trade policy.

• Goods in disguise: The report frames transshipment primarily as a tariff enforcement gap, where exporters route finished products through third-party countries to disguise their origins and exploit lower tariffs. It flags three kinds of risk: deep manufacturing ties to China (e.g., Vietnam), those that trade heavily with China (e.g., India), and those with smaller, unique vulnerabilities (e.g., Cambodia). “Transshipment predates today’s trade fight, but high tariffs have intensified it,” warn FDD’s Elaine Dezenski and Susan Soh, with the report highlighting estimates of annual transshipment flows between $40 billion and $303 billion. Beyond tariff evasion, transshipment also undermines U.S. export control and sanctions enforcement.
• Eroding U.S. power: As the United States confronts China’s non-market practices, enforcing trade barriers is as critical as imposing them. “Gaps like transshipment quietly erode U.S. economic power, allowing Chinese goods to reach American markets duty-free under a different flag,” explain Dezenski and Soh. While transshipment is outright customs fraud, a related legal loophole compounds the problem, the pair add: minimal final assembly, not substantial production, sets a good’s legal origin. Chinese manufacturers can ship largely finished components to a low-tariff country, do minimal assembly, and have the product classified as made there, not in China.
• Enforce trade barriers: Washington must work with allies and trade partners to address the report’s transshipment risks, advise Dezenski and Soh. This is an especially critical agenda item for the U.S.-Mexico-Canada Agreement (USMCA) negotiations. The three countries must redefine USMCA rules of origin to reflect where goods were substantially transformed, not just minimally assembled, because this definition grants goods preferential North American market access. At the same time, the administration should continue prioritizing the enforcement capacity of U.S. Customs and Border Protection. That means tracking and closing gaps, like transshipment and rules-of-origin loopholes, that let adversaries undermine U.S. trade policy.
• Read more: Transshipment and rules of origin are not the only loopholes adversaries exploit to evade sanctions. Congress should work to pass the Manifest Transparency Act, which would extend the disclosure rules that already govern ocean shipping to cover aircraft, truck, and rail freight. Dezenski and FDD Action’s Matt Zweig unpack the issue here.

A soldier gets settled into his temporary bedroom that he will be sharing with several hundred other troops at FedEx Field, Maryland, Jan. 18, 2017. (Air National Guard photo by Tech. Sgt. Jonathan Young)

Expand the military’s operational security requirements.

Iran is exploiting open-source data, from soldiers’ own posts to commercially available location data, to conduct psychological and kinetic attacks on U.S. forces. The Pentagon must update and enforce social media and personal device policies now, or adversaries will continue exploiting vulnerabilities to locate, study, and threaten American forces. In a recent Cipher Brief article, FDD’s Ari Ben Am outlines measures that would limit the open-source data that, at present, is readily available to Iran and other adversaries:

• Remove Mobile Advertising IDs (MAIDs). Iran may have used commercially available location data used by digital advertisers to “target and surveil” U.S. personnel. The Pentagon noted that MAIDs are not yet disabled by default on government-issued phones. That should change. The Pentagon should require the removal of all MAIDs on personal and government devices for personnel in sensitive areas. Without IDs, this sensitive data cannot be tracked or associated with individual users.
• Enforce stricter social media policy. Social media posts about servicemembers can be pieced together to reveal information about U.S. force formations and operations to adversaries. Personnel should be prohibited from uploading unofficial photos and videos of military facilities and should limit the information they post about their roles online. Moreover, government devices should have cameras and GPS disabled by default. Strava use should also be restricted. Recent reports indicate that Iran’s forces may have used data shared by Strava users at U.S. military bases in the Middle East to target U.S. forces.
• Monitor breached data. Iran has previously exploited data breaches to identify, threaten, and attempt to recruit Israeli personnel. The Pentagon should monitor breached data to understand what is publicly available about personnel and identify potential threats early. This information can be used to enable mandatory password and credential rotation, as well as stronger authentication.
• Transition from SS7. Personnel currently use the outdated Signaling System No. 7 (SS7), an older telecom protocol for roaming that reportedly enabled Iran to pinpoint hotels that housed U.S. personnel and contractors. Congress should mandate a transition to a new signaling technology that can guarantee more secure communication. This will allow service members to communicate abroad without leading adversaries to their location.

President Trump welcomes race car driver Simon Pagenaud and the 103rd Indianapolis 500 Champion Team and their race car to the White House, Jun. 10, 2019. (Official White House Photo by D. Myles Cullen)

🏎️ Start your engines, literally! Just blocks from the Capitol, for the first time ever, IndyCar is racing through the heart of Washington.

• Race to remember: The Freedom 250 Grand Prix will roar around the National Mall, first for the qualifier on Saturday and then the big race on Sunday. This is the first auto race ever held on the streets of the nation’s capital. With the U.S. Capitol as its backdrop, the race is a special celebration for America’s 250th birthday this year.
• The numbers mean something: IndyCar is expanding this Grand Prix from the usual 125 laps to 147 laps, creating a true 250-mile race to celebrate “250 years of freedom and innovation in 2026,” says Bud Denker, the race’s chairman.
• Who’s racing? President Trump will reportedly take a lap of honor around the Grand Prix street circuit before the event begins. But seriously, there will be some talented drivers on the scene. Former NASCAR Cup Series champions Jeff Gordon, Kurt Busch, Bobby Labonte, Rusty Wallace, and Bill Elliott will race alongside IndyCar greats and Indianapolis 500 champions.
• What to know if you’re going: The race carries a SEAR 1 security rating, the same classification given to the Super Bowl, so expect Secret Service, D.C. police, and Park Police checkpoints, plus a clear bag policy and no drones anywhere near the Mall. Free general admission tickets are already sold out, but if you still want to go, there will be a free fan zone on the Mall between 12th and 7th streets with big screens and concessions.

📺 Don’t miss it: Even if you’re out of town for recess, you can still take part in the fun. FOX has announced an extended Freedom 250 Grand Prix pre-race show, with coverage scheduled to begin at 11:30 am on August 23, and the green flag set to wave shortly after 1:00 pm. Off to the races!