Strategic Approach to Leadership Part 3 with David Petraeus, Former U.S. Army General and Director of the CIA
Willy Walker: Good afternoon, and welcome to another Walker Webcast. It is my honor, deep honor, to have General David Petraeus join me once again on the Walker Webcast to discuss the world we live in and General Petraeus' thoughts, ideas about conflicts around the world, and how the United States is both confronting them and engaging in them. General Petraeus, let me do a quick bio, even though nobody really needs it, but for anyone who has been living under a rock for the last 20 years, let me do a quick bio of particularly what General Petraeus is up to these days and a little bit of background. General David Petraeus is a partner at KKR, Chairman of the KKR Global Institute, and Chairman of KKR Middle East. He is also a member of the Boards of Directors of Optiv and OneStream, a strategic advisor for SEMPRA and Advanced Navigation, a personal venture investor, an academic, and the co-author with British historian, Andrew Roberts, of the New York Times bestselling book, Conflict: The Evolution of Warfare from 1945 to Gaza. Prior to joining KKR, General Petraeus served for 37 years in the US military, culminating his career with six consecutive commands as a General officer, five of which were in combat, including command of the surge in Iraq, command of US Central Command, and command of coalition forces in Afghanistan. Following retirement from the military and after the Senate confirmation vote of 94 to zero, he served as director of the CIA during a period of significant achievements in the global war on terror. General Petraeus graduated with distinction from the U.S. Military Academy and is the only person in Army history to be the top graduate of both the demanding U.S. Army Ranger School and the Army's year-long Command and General Staff College. He also earned a PhD in international relations and economics from Princeton University. General Petraeus, first of all, since you and I were last on the Walker Webcast, you've been named chairman of KKR Middle East. Congratulations on that, and I do want to dive into that role a little bit later. But if we can, General, I want to do a quick run around the world and dive in on hotspots, particularly given your very keen focus and consistent reporting out, if you will, on the conflict in Ukraine. But I want to talk about Ukraine, I want to talk a little bit about the Middle East, and I want to talk about China. You've emphasized that supporting Ukraine is both a moral and strategic imperative. Where do we stand today, General, given Zelensky coming to the White House, having a meeting with the president that clearly caught worldwide attention five to six weeks post that meeting? I’ve been reading a lot of what you have been posting as it relates to the conflict. Have we made progress since that meeting in the Oval Office, or have we stepped backward since then?
David Petraeus: I think there has been progress. I think the mineral deal that was signed between the U.S. and Ukraine is really quite heartening. It provides, if you will, some degree of reimbursement to the United States for what it will give to Ukraine in the future. I think that's a reasonable concept. It gets the U.S. a bit invested in Ukraine, obviously, as well, invested in its security, its future. It does have lots of minerals in a variety of different ways, some including strategics. Anything that again creates incentives for the U.S. to do more in Ukraine, not just with security assistance, although that will be what is credited to this joint fund that will be invested in the mineral sector, but also in other ways as well. So, in this case, economically, I think that's all good. Beyond that, frankly, President Trump achieved something no other president has in our lifetimes, really, since the end of the Cold War, at least, and that is to get Europeans much more serious about their own defense and spending what they're supposed to spend and more. Keep in mind that back in Wales over a decade ago, all the leaders of the NATO nations gathered at a summit and committed to spending 2 percent of GDP on defense. Many nations have not done that. There's more now than ever before. Huge breakthrough: Germany has just changed legislation which allows it to spend a lot more on defense without it counting against the limits on their debt to GDP ratio. It's conceivable they could spend as much as 700 billion to a trillion euros more than they had projected. The EU has also created a loan facility of about 150 billion euros from which countries can draw. Then, they're also at the EU level, exempting countries from their debt limits if they spend it on defense. There's a seriousness of purpose about this as well. We've seen France and the UK and now other countries getting together to determine how they could contribute and help achieve a security guarantee for Ukraine if a ceasefire is reached. So on the other hand, certainly Russia continues to attack Ukraine every night with drones, with missiles, with other munitions, and they're on the offensive every day, but taking enormous losses in the course of achieving incremental gains. Ukraine, meanwhile, continues to pioneer new, cutting-edge, really bleeding-edge unmanned systems. Most recently, just in the past few days, Ukraine claims, and we believe this is accurate, to have knocked down and destroyed two SU-30 fighter bombers. These are quite advanced, very expensive, with air defense missiles shot from maritime drones in the Black Sea. It’s just the latest innovation that we've seen from the Ukrainian side, which is sending thousands of drones at the Russians on a daily basis on the front lines when the Russians undertake offensive operations. Because frankly, they're heavily outmanned, they're heavily outgunned, and obviously, Russia has a much bigger economy as well. Other than that, no dramatic changes on the battlefield. Nothing really strategically significant, although Russia, again, does achieve incremental gains on a daily basis, but they're now estimated to have taken 950,000 killed and wounded, of which some 500,000 were not able to return to the front lines, so seriously wounded or killed, again, that they could not return. These are almost incomprehensible to me, having had, as you noted, five combat commands and just about every night in those commands writing letters of condolence to America's mothers and fathers. But yet the Russians press on. I believe that the most important action we could take would be together with our European partners, who are contributing more than ever before to enable Ukraine to change the dynamics on the battlefield so that Russia could not achieve even incremental gains at anything that would be acceptable in terms of losses. Then, I think you might get a willingness on the part of President Putin to negotiate seriously, but that does not appear to be the case right now, even though Ukraine is publicly willing to engage in a ceasefire and to even at least allow that Russia is occupying certain parts, even though by their constitution, a Ukrainian President cannot reject trying to join NATO nor allow Russia to occupy officially formally Crimea. So that's where we are. In my view, as you noted up front, this is not just a moral obligation, and this is a cold, hard national interest obligation, because if we don't support Ukraine in its hour of need, continue to support, why would someone on the other side of the world believe that we're going to support a country there, a territory, if indeed China was to seek formal reunification with Taiwan, as an example? Deterrence, as we discussed the last time, Willy, is the potential adversary's assessment of your capabilities on the one hand, and your willingness to employ them on the other hand. That latter element of deterrence is very much subjective. But we have to recognize, as Andrew Roberts and I note repeatedly in Conflict, the book, that what you do in one part of the world influences perceptions in others. The Syria red line turned out not to be a red line; I was in the office of the Prime Minister of Singapore when that happened. And he said, “General, that reverberates out here, out in the Asia Pacific, out in the South China Sea.” The withdrawal from Afghanistan and the way it was conducted, and again, we didn't have to withdraw. We could have easily sustained the small number of forces we had there. We hadn't lost a soldier in 18 months. So, in terms of blood and treasure expenditure, $25 billion out of an $800 billion defense budget at that time, we could have sustained that. When we withdrew, the way it was conducted, many of us think, influenced Russia that we would not respond as forcefully as we did actually when, in early 2022, Russia did the full-scale invasion of Ukraine.
Willy Walker: Talking about the fact that our allies in Europe have really stepped up to the plate, I remember specifically when President Trump went to his, it may not have been his first NATO meeting, but the NATO meeting where he basically, from my outsider's perspective, sort of shamed the European leaders into saying, “You aren't paying your fair share.” And as a U.S. citizen, I sort of stepped back and said, “Whoa, that seems a little harsh for the U.S. President to sort of publicly say that those are the types of things that typically would happen in fact channel conversations and not out on the dais in front of the world press.” And I'm interested in your first point as it relates to the Europeans really stepping up to the plate now and feeling like they need to step into this conflict and take responsibility for it. Is President Trump's leadership style, (you've worked for many, many presidents, and you've been in the room when things like what we're talking about here have either been talked about or negotiated), is this sort of confrontational leadership style what is needed at this time to make the types of inroads that we're making as it relates to our allies stepping up and taking their responsibility?
David Petraeus: I know certainly this is debatable, but at the end of the day, I'm reminded of what my father used to say to me on a fairly regular basis, especially where I hadn't measured up in some way and I'd offer an excuse and he'd say, “Results, boy, results.” Keep in mind that he was a Dutch-American crusty old stubborn sea captain.
Willy Walker: By the way, he'd be very, very pleased with the results you've achieved. So let's just know we've checked that box well.
David Petraeus: Well, he did at least get to see me make four stars, and actually, we succeeded in the surge by the time that he passed away in the second year in the four-star tour in Iraq. So in this case, he's gotten results. Are there bruised feelings? Absolutely. Is there uncertainty? Yes. Is there worry that the U.S. Commitment to Article 5, the collective self-defense, may not be as firm as it was? Yes on all. But boy, have the Europeans really stepped up in a very serious way. Now, in an ideal world, once they've truly committed all this money, we might want to reassure them that we'll be there. And also, the other challenge, the practical issue, is that NATO without the U.S. Security Foundation or contribution really is not all that it should be, frankly. What you have are a number of medium-sized countries, none of which remotely have the capacity of the U.S. to begin with, but even together, the U.S. spends more than two point something times what the Europeans spend collectively in aggregate, and they tend to each want to have a little bit of this, a little of that. They're not always interoperable. So, having been a one-star, three-star, four-star NATO commander or staff officer as a one-star, while Dual had it as an American position, I think I know as well as anybody how important a U.S. contribution is to a NATO operation. Keep in mind that Afghanistan, in theory, was a NATO operation, but you still had 100,000 Americans very, very capable, 50,000 non-US NATO, or other Western countries, and every single country had some shortcoming. It had some caveats; in other words, it couldn't do this kind of mission. In every case, the U.S. compensated for it in some fashion. So it's really important that the U.S. reassurance is still there, even as you prod NATO countries, especially in Europe, but also Canada, frankly, North America, to do much more than they have been doing. It really is not right that we have shouldered so much of the burden, given that in aggregate this is a larger population and has enormous wealth, and really was not doing what was responsible for their own defense and collective defense anchored on NATO.
Willy Walker: You have posted out on your LinkedIn profile a number of graphs and studies from the Institute for the Study of War. Given how often you're using that data, my assumption would be you think that is some of the very best data you can find on the actual conflict in Ukraine.
David Petraeus: I should note I'm on the board of the Institute for the Study of War. I have been probably for about a decade now or so. The co-founder and president has literally spent a year in Afghanistan with her husband as a civilian helping both me and General Allen, my successor there. I spent a lot of time in Iraq. Those numbers are solid. I've dug into them on many occasions. I also have, frankly, the Petraeus Center for Emerging Leaders there. I'm very much wired into the Institute for the Study of War and strongly support the two doctors: Kim Kagan, who is the president of ISW and the founder, and Fred Kagan, who has the Current Threats Project at the American Enterprise Institute. They both taught at West Point, too, by the way. Both have PhDs from Yale, and I think bachelor's from there as well. Very, very impressive. Great Americans.
Willy Walker: So if you look at the data that they're putting up as it relates to Russian aggression in Ukraine, there's a fantastic graph you put up. If you look at it, they were back at the beginning of this year, you were getting somewhere around 100 combined drone missile attacks on a daily basis, and then that moved up to over 250 a day in early February, mid-to-late February, General. And then they've come back down recently to 100 to 150. So if you're watching when Putin was really leaning in on the aggression, it was sort of in that mid-to-late-February timeframe, things seem to have calmed down a little, but I did notice that recently the number of missile attacks has spiked versus the number of drone attacks. Does that tell us anything as it relates to either the munitions that the Russians have or trying to, if you will, be more aggressive by the type of armaments they're using ,whether it's drones or missiles?
David Petraeus: What it tells us in particular is that that component of the Russian military-industrial complex that produces missiles has actually revived. It's been reconstituted, if you will, and expanded, augmented. The Russians are now on a full wartime footing when it comes to their economy. I forget the exact numbers of how much spending they're devoting, but more than 40 percent is devoted strictly to the military. That's a massive amount. And of course, predictably, their economy is suffering as a result of that in a variety of different ways. They had a brain drain as well. They're drawing down the reserves that they have. And over time, that is going to be a huge burden for the country. But in the short term, they have really gotten their military industrial capacity back, and that includes very significantly when it comes to missiles. A lot of the drones, of course, that they're sending have been provided to them by Iran. They go in fits and starts. Sure, I'd like to see that number degrade as well. In some cases, Ukraine has taken action against a certain airfield or a certain base or a certain supply center or storage center for some of the different munitions, including, at times, the drones.
Willy Walker: You talk about the cost to Russia of the war. I heard you in another interview talk about the fact that there are $300 billion of Russian reserves in European banks and financial institutions. Just curious, General, what would be necessary for European countries to just take those reserves? I'm assuming that when the conflict began, they just froze them. They are at war; they're at a war that nobody agrees upon. Is there some action that would say, “Okay, now you've lost that $300 billion?”
David Petraeus: There is. Bob Zoellick, who's a former World Bank president, and a number of others in the U.S. have laid out the legal case for that, which seems to be quite solid. A number of international lawyers contributed to this. By the way, there's $10 billion or so in the U.S., as well. In fact, the countries that control this have actually taken an interest in these different deposits and using that to provide to Ukraine. They've also created essentially bonds based on that, which have augmented that amount as well. But they're reluctant to seize it for fear that it would undermine the assessment of their countries as a safe haven, if you will, for deposits by countries around the world. Some of these are pretty small. Belgium is one of these. There's a handful of others that are punching way above their weight class as a destination for reserves by countries, and they don't want to undermine the prospects for that in the future. That is their concern. I guess it's a reasonable one, but not as reasonable in my mind as seizing $300 billion and providing it directly to Ukraine, which now has its military-industrial complexes just on steroids. It is extraordinary what they're doing. The Ukrainians designed, manufactured, and employ, themselves, 1.5 million aerial drones last year alone. So they can throw thousands of them. There are suicide drones; there are surveillance drones, and long-range drones that go into Russia. There are these air defense systems. It's extraordinary what they're doing. Keep in mind that Ukraine has no Navy as we would know a Navy, i.e., ships at sea. And yet they've sunk one-third of the Russian Black Sea fleet, using a combination of aerial drones to find them, and then maritime drones to sink them. The Russians are completely out of the Western Black Sea now, including their last combat vessel pulled out of the centuries-old port of Sevastopol in Western Crimea. So what they're doing with these drones is just absolutely remarkable. They've also conducted the first-ever completely unmanned offensive operation where the vehicles on the ground were all remotely driven, and you have some that were actually algorithmically programmed, and have some others that are just programmed to drop mines in advance of the Russian attack and so on. And then the sky is filled with all kinds of different drones once the Russians present themselves, if you will, by getting into an area where they don't have cover and concealment. This is what is limiting the Russian operations and what they're able to achieve very, very significantly. The Ukrainians just can't mobilize, remotely, the kind of forces that Russia can. They're really at about capacity with that regard, and it's very modest compared with what the Russians are able to do. Keep in mind that they have a bigger economy. They can give a year's salary to a young man in a rural area of the Russian Federation to attract them to sign up to enlist and then to go off and fight.
Willy Walker: When I hear you talk about how advanced Ukraine has become with, particularly, drone warfare, it makes me think about the almost trillion dollars a year that we're spending on the U.S. military and the need for those advanced or innovative warfare methodologies to be incorporated into the U.S. war plan. I'm thinking about you talking about the U.S. and whether we can, if you will, learn something from Ukraine as it relates to their innovation and the use of drone warfare. It does remind me a little bit of the way that Tesla was started with a blank slate and none of the legacy systems that a Ford or GM has, and how innovative they were in building out electric cars. It’s been a real challenge for Detroit to catch up to where Tesla has been. How does the U.S. military need a reboot as it relates to these new technologies, or can we actually learn from them and incorporate them into our future war plans?
David Petraeus: We can learn from them, and we have already developed concepts that are driving innovation in the U.S. military. So think about, for example, the Indo-PACOM commander's interview with the Washington Post some months back, where he laid out the concept of “hellscape.” That is his description of what he wants to make the Taiwan Strait into if China should ever think of coming across it with an amphibious operation to forcibly reunify with Taiwan, and where you would have a vision of autonomous, so not remotely piloted but algorithmically driven, drones underwater, on the surface of the water, in the sky, on land, in outer space, in cyberspace, the equivalent, etc. This is all publicly out there. This is what he laid out in this Washington Post interview. I can assure you that the services that provide the forces that would turn concepts into reality are working hard at that. It's never as fast as we'd like it to be, but it is very much ongoing. The Army just announced a big change where they're going to focus a good bit more on remotely piloted systems and, over time, on algorithmically driven systems as well. All of the services are doing that. The Navy has unmanned surface vessels. It's actually using them in some of the theaters around the world, and so forth. The challenge is that we have what Senator McCain termed the military-industrial congressional complex, elements of which have vested interests in the existing systems, platforms, basing arrangements, maintenance, and all of this. That's a real obstacle in many cases to the kind of rapid change that we have seen from Ukraine, because, of course, they're fighting for their very survival. They are producing very effective, low-cost unmanned systems of various types. They're iterating literally on a weekly basis. I visit the Nemesis regiment every time I go to Ukraine, and I'm going again this week. They are evolving very, very rapidly, constantly refining the way that they maintain the links with their unmanned systems. They have four antennas coming off some of them because you need a GPS link; you need a command and control link; you need various types of those because the Russians are jamming. They have air defense and they can sever the various links, and so forth. The Ukrainians now even have a system that is flown by wire. It is actually very, very thin fiber optic cable that spools out behind the drone as it flies along, and they can even fly through forests and everything else. That way you can't be jammed, obviously. And so they're constantly innovating like that. Again, the sheer numbers of drones that they're throwing at the enemy on a daily basis is incredible. Most of their resupply missions and logistics trips to and from the front lines are now done by remotely driven ground vehicles. Because it's so lethal, these front lines and even a good bit are exceedingly lethal, given the density of intelligence, surveillance, reconnaissance, and attack systems overhead. It's a really paradoxical battlefield, Willy, because, in fact, Max Boot, the great Washington Post columnist, termed this the war in which All Quiet on the Western Front, of course, a World War I novel, meets Blade Runner. You have trenches that looked like World War I, barbed wire, concertina wire, minefields, dugouts, overhead cover, large quantities of artillery, and all the rest of that. But then right on top of it, you have bleeding-edge technology in the form of the unmanned systems, particularly on the Ukrainian side, but certainly Russia is evolving, learning, and so forth as well. Should we learn from that? Absolutely. There actually are U.S. companies that are engaged in this. They are very much taking lessons back. Of course, they're competing in a defense ecosystem where, for a whole variety of reasons, not the least of which is labor costs and so forth, they have got to get the cost of what they're providing down much more. And they are. So I wish that we had what we term the lessons learned by teams all over the battlefield. Army lessons learned, Marine Corps lessons learned, Special Forces, asymmetric, all these different groups that actually exist, and they did during the war in Iraq and Afghanistan, we had them all over the battlefield. I would meet with the full colonels who were the heads of the respective teams once a month as we were determining how we needed to identify lessons that needed to be learned—in other words, refinements to the big ideas, the strategy, the tactics, and so forth. I'd like to see more of that. But obviously, any of that carries a risk, and the risk analysis has always been that the loss of a man or woman in uniform could really undermine the policy. I think that's overstated, and in fact, in the previous administration, there were endless delays on critical decisions of providing weapons systems to Ukraine. But they have to do it with very small teams, largely operating out of the embassies, although there are, needless to say, some other opportunities for this with other elements of our government.
Willy Walker: So, in transitioning to the Middle East, General, just one final question on Ukraine. Over the weekend, there was news that a Patriot air defense system that has been based in Israel will be sent to Ukraine after it's refurbished. Just to those of us who don't understand what a refurbishment, when I hear refurbishment, I think that it's a, I don't know, it's Boeing 737 that goes back to Seattle to have the seats brought out and some new engines, a seat check on the engines and off it goes. When I read that a Patriot air defense system needs to be refurbished, is that shipped back to the States? Is it done there? And then I guess the other thing is, how significant is having a Patriot air defense put into Ukraine?
David Petraeus: Well, any additional Patriot air defense system is incredibly valuable to Ukraine. It's this system and a handful of others that have largely deprived the Russians of any real successes with their ballistic missiles, in particular. Also, they can't fly their aircraft into Ukraine virtually at all. There's really no concept of close air support as we have had in previous wars. It's so lethal to put anything into this sky. But they could be overwhelmed, and of course, they're expending the interceptors and so forth. This is basically thought of it as overhauling, upgrading, and modernizing the hardware and the software, and probably giving them newer interceptors as well. Again, it's very, very valuable because this is the one commodity, probably above all in Ukraine, that the Ukrainians can't really produce themselves that well yet. They're producing just about everything else at this point in time. There aren't huge numbers of these to be shared from the U.S. elsewhere or from Europe. So it's a critical pacing item, as they say, to keep Ukraine's civilians and its most important cities, above all Kyiv, from getting really clobbered by a large missile from Russia.
Willy Walker: So Israel, I guess Israel, Syria, Iran, Hezbollah, I don't exactly know where to start, General.
David Petraeus: Hezbollah, if you want, and I'll walk you around, and we'll end with Gaza. Israel has done a spectacular job against Lebanese Hezbollah, the Iranian-supported Shia militia. This was Iran's most important proxy militia force. Israel took out and decimated the leadership structure of Hezbollah, not just going after the top 20, but then taking out thousands of the leaders with the exploding pagers that were the symbol of importance in that force. That was how they were communicating after they realized that they couldn't use cell phones anymore because they'd get targeted. Then the next day, the walkie-talkies, the last means of communication, blew up as well. So two unbelievable supply chain operations in terms of the scale, in particular, that left Hezbollah unable to do what Israel and all of us had feared most, which is to launch thousands of missiles, drones, and rockets at Israel simultaneously and overwhelm the sophisticated air and ballistic missile defense that they have including Iron Dome, David Sling, Arrow, Patriot, and so forth. That's a huge achievement. That allowed Israel then to conduct a devastatingly effective air campaign, probably reducing the number of missiles, drones, and rockets from 150,000 or so to 10,000 or 15,000, and making it very difficult for them to use now without the Israelis identifying them and taking them out. So, Hezbollah is dramatically degraded, defeated, not destroyed completely, but because of what happened in Syria, where Bashar al-Assad's murderous regime was overthrown (and he was an ally of Iran and allowed Syrian soil to be transited with the means that would be used to reconstitute Hezbollah from Iran through Iraq and Syria), that is no longer an option. So that is strategically significant. We'll see how the government does in being able to consolidate control of the country and provide governance of all the people with minority rights, not just majority rule. That is in question, but certainly this is very significant. The militia in Iraq is taking a knee for a time, supported by Iran. Then you have Iran itself, where, in response to the second attack from Iranian soil on Israel with missiles, Israel with F-35s dramatically reduced the capacity of the sophisticated Russian-provided S-300 air and ballistic missile defense system that Iran had. That is very, very good news if we have to go in together and destroy the Iranian nuclear program, which is one possibility if Iran does not negotiate seriously, if we can't get a deal that would be even better than the one that was reached by the Obama administration. You have the Houthis, who are still problematic, very resilient, rugged terrain, tough, resilient, but they're under ever more pressure. They just had a missile that actually did strike near the international airport in Tel Aviv yesterday. So they'll stay under pressure. But at some point, I think that they can be ground down. Then, you have just the residual challenge of Hamas, which is not trivial. Israel set out to destroy Hamas to keep them from governing again and to get the hostages back, and they have partially achieved those objectives, but not fully. Hamas would be defined as degraded, not destroyed, and they're replacing those that they lose. There's no shortage of angry, grievance-filled, unemployed young men in Gaza. Certainly, they're nowhere near the capacity and capability that they had when they launched that barbaric and inhuman attack on October 7th. That was also very, very sophisticated in many different respects. Hamas is still the guys with the most guns in Gaza, so if there is a governance structure that would be Hamas. Then, of course, for Israel still, there are many, many dozens of hostages still to be recovered, but we're at a point probably where Israel cannot meet Hamas's conditions. Israel should never give up the southern border of Gaza with Egypt. They should control that forever. It's in the tunnels and through it in Rafa Crossing that so much of the military material, weapons, ammunition, explosives, and other material flowed, and by controlling it, they kept Hamas from being reconstituted in that manner. The problem, though, is that there's really not a defined end-state that has ever been described for Gaza, and I think there would be wisely a fourth objective in addition to the three that Israel has established (again, not yet completely achieved). A fourth one would hold out to provide a better future for the Palestinian people in Gaza without Hamas in their lives. I think achieving that objective is only possible if Israelis secure all of Gaza, sequentially gated communities, and so forth, one after the other. Biometric ID cards, but that requires them to be living with the people, if you will. Obviously, that has enormous challenges to it. Right now, what they're doing is creating large bases in Gaza from which they sally forth, but the people don't yet have security. Without security, you're not going to be able to get the Arab countries involved. You can't get replacement local security forces, Palestinians, that ideally would be trained in the Jordan International Police Training Center, the kind of humanitarian assistance that NGOs could give if you had security. A variety of other options are available if you have security and can rebuild basic services, repair damaged infrastructure, get the people back in the area of their homes, and better shelter with biometric ID cards with entry control points all the way down. This is very, very challenging. It's what we did during the search, which was a complete change from what we'd been doing before, 12 gated communities as we called them in Fallujah alone, as an example. Much, much tougher than what we did there, though, given the tunnels, the local expertise and knowledge of terrain, and people that the Hamas have. I think that would be an approach that would be wise, because with the current approach, I just don't know how you kill off all of Hamas if they can replace those that are killed relatively easily. Again, they're degraded dramatically, but degradation is not destruction. It doesn't, in the way they're going about it, prevent Hamas from reconstituting, at least in terms of numbers. This has been debated in Israel. The previous minister of defense, with whom I discussed this concept, asked the prime minister repeatedly for what the vision for Gaza was, but never really got it. Eventually, he was fired, in part because of that. But that is something that is still very much out there. I think they're developing concepts for going forward, but I'm not sure that they're truly going to achieve the three objectives they originally established, which I fully agree should be achieved, much less the fourth one that I think is the only way to have a possibility of Palestinians living in Gaza peacefully beside Jews in Israel.
Willy Walker: When you and I last spoke, one of the comments that you made was that in the surge, you implemented a new tactic, which was to conquer and hold, and to hold the hill and not clear and hold exactly. It appears over the weekend that they came out and said now their objective is to conquer the strip and to hold the territory. So it sounds, General, to a great degree that after the temporary ceasefire in March, they are changing the strategy now somewhat similar to the way that you changed the strategy in the surge to saying, “We've got to clear and hold now rather than clear and move on.”
David Petraeus: Well, the way they're going about it so far, though, is they're holding the base that they have. They're then, if you will, driving around periodically, conducting patrols, and so forth. But that is not holding. Holding would be you start in the north, you come a kilometer in, put an east-west wall, two or three north-south walls, you have three or four gated communities, you clear every building in it, and you hold it. And then you cut an entry control point into the rest of Gaza, biometric ID cards, or all that. They are going to use those, which is good because they have tremendous biometric expertise. They'll identify a lot of the bad guys who are always posting themselves on social media and so forth, thankfully, kindly, for the Israeli defense forces to identify. You just keep “rinse and repeat” all the way down. That's very different from establishing a large Israeli base from which you go out on patrol, but where you don't have, again, this kind of population control mechanism that is a proven way of doing this. But again, you are in the population 24/7. You think that out as you get Arabs to come in and replace you, Palestinian security forces again that would be trained, vetted, equipped, and so on, and supervised. But it's very, very tough. But I don't think what they're doing right now is going to actually establish the same kind of security. Keep in mind, there's a famous comment from one of the iconic figures in Vietnam, John Paul Van, who used to say, “I don't know whether security is 90 percent of the problem or 10 percent of the problem.” Whatever it is, it's the first 90 percent or the first 10 percent without real security of the population. Again, with these kinds of security measures, it is really hard to sustain them.
Willy Walker: Final question on Israel, and then I want to go to China. Can the U.S. and Israel do this on their own, or do they need Saudi Arabia to come in?
David Petraeus: Depends on what this is. Are you talking about the Gaza operation, or are you talking about destroying the Iranian nuclear program?
Willy Walker: I was on number one, but let me broaden it to your analysis on two. Can you do one and two?
David Petraeus: I don't think Israel needs direct on-the-ground assistance from the U.S. or Saudi Arabia. What they need is our continued security assistance. Without question, ramp it up, and provide everything that Israel possibly could need for that operation. But this is an operation that they should carry out over time. If they achieve security, then you'll see Emiratis, Saudis, others will be willing to go in and support in a variety of different ways. But they're not going to fight Hamas directly, nor will Palestinians from the West Bank and Gaza Strip. With respect to the Iran nuclear program, I think actually, given all of the Israeli successes in the region, Hezbollah, serendipitous overthrow of Bashar al-Assad, reduction of the degradation of the Iran air and ballistic missile defense systems, and so forth, that there really can be an agreement. The pressure is very much on Iran. We have the means out there to destroy their nuclear program, if necessary, either alone or with Israel together, noting that they don't have the capacity, it's all publicly known, to destroy one of the deeply buried sites in a mountain, Fordow, that Iran established over recent decades. So, the question is, will Iran be willing to provide a deal that is even better than the one that was reached by the Obama administration, which had many, many good features in terms of the elimination of all enriched material above 3 percent, even 97 percent of that? Reasonably intrusive, but not totally what we needed. But it had end dates; it had sunset clauses starting at 10 years. That was the problem. So in this case, those end dates need to be much, much longer, and the inspector should be able to go anywhere, including one site that was denied to them in the previous arrangement. If they can't, then I think we should be ready to destroy the Iranian nuclear program once and for all. And yes, they can rebuild it over time. But this would be a very devastating blow to their nuclear ambitions. Keep in mind, though, that you don't just do that. You have to take down the rest of the air and ballistic missile defenses. You have to take down their retaliatory capability, missiles, rockets, and drones, fast boats, mine lanes, ships, all of this. So this is a major, major operation, but the threat of that with two carrier task forces out there right now, B-2 bombers and Diego Garcia, an amphibious warfare task force, all of these should be sufficient to convey the message to Iran that they need to reach an agreement and they need do it pretty quickly.
Willy Walker: So switching to China, General. In our last conversation, you talked about the fine line of applying enough pressure to make it so that nothing happens, and at the same time not crossing the line. Warren Buffett said over the weekend out in Omaha, “Trade should not be used, should not be weaponized.” Does the trade war concern you as it relates to increasing the blood pressure, if you will, of U.S.-China relations?
David Petraeus: Yeah, I think what I said last time was that we should be firm, very firm, and very clear about that, but not needlessly provocative. I don't know, look, I am very concerned about the tariffs, but that's from a whole bunch of perspectives. Number one, if 145 percent tariffs basically decouple the U.S. and China (and of course, theirs are 125 or something like that, so they're so, so high), they literally prohibit the normal kind of trade that we have had with each other. We're the two largest economies of the world. They're our number three trading partner after Canada and Mexico, our North American free trade zone countries, partners. So this, over time, is going to have an enormous impact, if not resolved quickly. And I know that many members of the administration are keenly aware that the business community, as I'm sure is the case for you as well, the sooner these can be resolved and you have real clarity about what the final numbers will be and what the impact will be, and what the implications are and so forth, obviously the better, because this will have an impact on our economy without question in a variety of different ways. The IMF and other observers have downgraded prospects for growth for the U.S. and also for the entire world. As tariffs are impacting, as they actually begin to bite, if you will, there's no question that there will be inflationary activities as a result of this at a time when inflation just got under control. So this is going to be very, very challenging. People have gone into Target stores, for example, or Tarjay, as our daughters describe it, to see how much on the shelves is from China, and it's a huge number, certainly way over half if not much more than that. So, think about what happened in COVID when the supply chains were disrupted, and now nothing is going to move from China to the US directly. It is just absolutely prohibitive to pay 145 percent tariff duties on something, and many of these, of course, aren't that expensive to begin with. So the implications are very, very substantial. Again, great to see a recognition, the Secretary of Treasury in particular, but also President Trump announcing all the work they're doing to get resolutions of these. Because of course, the sooner you get that, the sooner consumer confidence returns. It has gone to an all-time low in recent decades. The sooner that business confidence returns, where you can actually make decisions to make major investments in plant and capital infrastructure, et cetera. So there's a lot of limbo right now for both consumers and business leaders. We do investment themes constantly. We're always looking at what theme should guide the deal teams as they are in it. We long had a theme that was called “experiences over things.” In other words, you don't go out just to have dinner, just to eat; you go out to have an experience. That's why you go on a cruise ship. So again, people had the money to do that and the certainty that underlie their willingness to do this is the same with major end-item purchases. It's now the opposite. It's things over experiences and pretty quickly, it'll become necessary things. Because you're going to want to have dry powder in case this goes on for a long period of time. So again, that does absolutely concern me. But I'm not sure that that's something that will prompt a decision in Beijing that otherwise would be unthinkable. Nevertheless, the sooner this can be resolved, the better. By the way, there are great arguments for tariffs—sectoral tariffs to present certain industries that are so important, as the previous administration did, 100 percent tariffs on Chinese electric vehicles, which had state support. It was unfair trade, and they're also very competitive and would have really overshadowed our still nascent electric vehicle industry. The industrial policy that we engaged in to get TSMC fab plants to produce high-end chips. I was just in Phoenix, by the way, and one of those is already operating, and the others are under construction. Again, all of these, I think, there's a good rationale for them, and even perhaps across the board in some ways. Of course, it's a great negotiating tool because a lot of countries need us a lot more than we need them. But the longer the disruption lingers, the longer I think the uncertainty goes on. And that is something that's really necessary to get back to the pace of growth that we had anticipated for the year.
Willy Walker: We're about to run out of time, and I'm super, super appreciative of your hour and all your insights on everything going on. I think about the trade war, General and I think about the president's success in getting NATO to step up to their own defense and to NATO's defense. I think about the trade war and them running out to try and strike deals now after some pretty draconian statements at the beginning. If we are able to really advance on some of the existing trade barriers that have been up by using this brinksmanship, it could actually turn things around quite materially, which is an exciting thought. At the same time, clearly the last six weeks have been anything but copacetic as it relates to capital markets and where the stock market is gone and where the bond market is going and things of that nature. I guess I would say, I hope the President is successful there, as he was on what you started this call out on, in getting NATO to step up.
David Petraeus: Yeah, no, I couldn't agree more. Again, this is a negotiating technique and tactic that can actually achieve results. But you've got to recognize that in the short term, this enormous uncertainty creates tremendous volatility, and consumers draw back. Again, we're a 70 percent domestic consumption economy. So, just not avoiding that you're going to see reduced growth and potentially, I hope that we don't fall into a recession, noting that the first quarter was down 0.3, which was a surprise, actually, because that was still before the announcement of the tariffs in early April. So again, but touch wood that this can produce the kinds of improvements and fairer trade, an even playing field, if you will, as opposed to one that had a lot of imperfections in it. If that's the result and it can be reached quickly, we'll get back on a path of growth that we were on and should be back on as well. Noting that the enormous advantage we have right now in the U.S., not just that we're the number one economy in the world, and often others depend more on us than we do on them. We have this incredible productivity boom right now in the United States. That is hugely important, and we need to continue to create the conditions that foster that and enable that growth.
Willy Walker: On to that final question to you. One of the things that makes me sleep well at night is that for all of President Trump's rhetoric, I have been told by people who know him well that he very much does not want war, that deep in his core, he's someone who wants to avoid warfare. Is that correct? Is that what you're taking from people?
David Petraeus: I think it is, and I think that we've seen this to a degree because of reports that he really prevented Israel from doing, reportedly, what they wanted to do, which was conduct an attack on the Iranian nuclear program earlier rather than later. See whether you can get a negotiated resolution. Look, having seen what happens in warfare, when you roll the iron dice, as Bismarck termed the decision to go to war, you never really know how it is going to turn out. I think that Trump is properly cautious in that regard. I hope that we still hold out that threat and also the possibility of carrying out the operation, because that's going to be one of the major factors that will induce Iran to agree to a deal. And the same is supporting Ukraine against Russia. If you really want Russia to negotiate, you've got to make it probably more painful for them before you get to an agreement. So again, the threat of force, I think, is absolutely vital and those forces should be capable, lethal, well-trained, and on the cutting edge of technology. And I hope that this trillion-dollar defense budget will enable that kind of advance.
Willy Walker: General, it is always a deep, deep pleasure and an honor to spend time with you. Thank you very much. Great to see you and I look forward to seeing you in person sometime soon.
David Petraeus: Well, I look forward to cycling with you in Sun Valley in July, if not sooner.
Willy Walker: Quick, put it on the calendar. I look forward to it. Thanks, General. Great to see you.
David Petraeus: You bet.
