PDB: 'Red Kraken' War Game Tests US Response to Chinese Cyber Attack

FOR YOUR EYES ONLY — THE PDB — Not the President’s Daily Briefing, but almost as good — PAUL’S DEFENSE BRIEF.

The top defense news and intelligence from conservative national security expert PAUL CRESPO:

TOPLINE STORY

‘Red Kraken’ exercise in July. House Homeland Security Committee lawmakers and staff get taste of AI-enabled cyberattacks in China-Taiwan tabletop war game that tested how U.S. officials might respond to AI-backed cyberattacks targeting transportation and logistics networks needed to deploy U.S. forces.

Center for Strategic and International Studies (CSIS) hosted the event.

Scenario begins with China launching a massive military exercise around Taiwan in summer of 2027, leaving U.S. officials unsure whether Beijing was being coercive, imposing de facto blockade or preparing for full invasion of island, per readout provided to reporters just before simulation began. Beijing avoids using term “blockade” but its moves effectively quarantine Taiwan, the summary says.

Lawmakers are then told that U.S. intelligence suspects Chinese hackers had begun targeting ports, freight rail systems, airports and other transportation networks that could be used to move U.S. forces and supplies. Some of the attacks cause immediate disruptions, while others appear designed to preserve access that could be leveraged later.

Participants have to decide which networks to defend first, how closely to coordinate with private sector critical infrastructure operators and whether moving U.S. forces would deter China or further escalate the crisis.

READ MORE HERE at CSIS

PRESIDENT TRUMP

Trump’s various businesses earned him an unprecedented $2.24 billion in 2025 – an increase of nearly 280% over revenue from in 2017, primarily due to cryptocurrency dealings.

NATIONAL SECURITY

Trump administration announces major civil nuclear deal to export nuclear materials to Saudi Arabia for peaceful nuclear power. He later stated the final deal was contingent on Saudi Arabia recognizing Israel.

U.S. has most lethal military on Earth. But even the most advanced weapons system is only as strong as the supply chains behind it.

New executive order issued by President Trump authorizes Pentagon to use AI to map vulnerabilities in department’s supply chains.

U.S. needs off-ramp between doing nothing and shutting down AI. For 18 days in June, two of America’s most capable AI models went dark worldwide, not for technical or business reasons, but because U.S. government ordered it.

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HOMELAND SECURITY

Seriously? Attorneys for vacationing soldier shot by stray round when he was caught in “hail of bullets” in front of White House have filed a $25 million claim against Secret Service who exchanged fire with an armed assailant.

DEFENSE POLITICS

House of Representatives for second time passed war powers resolution directing President Trump to withdraw U.S. military from conflict with Iran. This, amid renewed fighting that has driven oil prices to their highest levels in weeks and claimed 4 more U.S. lives.

House of Representatives narrowly passed its version of sweeping defense policy bill, approving historic $1.15 trillion budget for Pentagon amid uncertainty on future of Iran war.

Trump declared he would propose a $1.5 trillion defense budget for fiscal 2027—a record-breaking figure akin to Reagan buildup of 1980s, but this time to counter China not the USSR. But now, nearly 8 months later, chances such a big budget might pass are fading.

Coast Guard should get a civilian leader like other military branches, GOP senators say. Coast Guard Leadership Modernization Act would establish secretary of the Coast Guard.

BRRRRT Act would keep more Warthogs flying. It would force Air Force to keep at least 126 A-10 Thunderbolt II CAS jets, far more than service had planned, and to reverse year’s work dismantling aircraft’s maintenance depot, pilot training and weapons course.

US POWER OVERSEAS

Air Force has stood up first rapidly deployable units designed to protect air bases in Pacific or other potential hotspots from aerial attack.

IRAN WAR

Trump says he is prepared to continue, or escalate, U.S. military strikes while also signaling he is open to more negotiations. But, despite having lost scores of ships, missiles, and military production facilities, Iran’s actions still affect U.S. actions. This is allowing regime to control pace of the conflict. How is this possible?

Trump’s latest threat to bomb Iranian infrastructure is unlikely to rattle Tehran — and instead underscores limits of what air war alone can accomplish.

Iran-backed Houthi forces in Yemen struck 2 Saudi oil tankers in Red Sea, threatening second major chokepoint for oil supplies along with Iran’s near-closure of Strait of Hormuz.

Unfazed by Iran’s threats, Bulgaria approved draft decision enabling U.S. tanker aircraft to support military operations against Iran from an air base on Bulgarian territory.

Bahrain, home of U.S. 5^th Fleet HQ, activated its sirens Friday, warning residents to shelter from detected fire hours after U.S. military said it had wrapped up its 13th night of strikes against Iran.

UK ‘ready to defend itself’ after Iranian threat over U.S. bases. IRGC claims base in south-west England was used by U.S. to launch bombing missions, making it ‘legitimate target.’

Video footage and satellite images reveal new details about Iranian strikes on U.S. targets in Gulf.

CHINA THREAT

Total war on Taipei: China explores elevating cognitive effects into its vision of warfare. China’s military researchers published concept describing how to rapidly capture and subdue city of Taipei. Its objective is to break the Taiwan people’s will to fight.

Australia successfully has tested a “Frankenstein” hybrid medium-range air defense system, harnessing existing and new capabilities in way nobody has tried before.

RUSSIA THREAT/UKRAINE WAR

EU naval mission will now intercept and board Russian shadow tankers in Indian Ocean suspected of operating under false flags.

Ukrainian troops join in outcry, say defense chief’s firing portends return to ‘meat grinder.’

Ukrainian F-16 shot down a Russian Su-57 Felon semi-stealth fighter for first time since U.S.-designed planes arrived on battlefield in 2024.

EUROPEAN DEFENSE

Backed by France, Macron sees Germany as nuclear deterrence ‘vanguard’ in Europe. French nuclear-capable bombers visiting German airfield this month and joint exercises on the calendar.

Greece to buy multi-layer air defense system worth up to $4 billion from Israel.

UK’s BAE enters uncrewed fighter aircraft competition with ‘Brontanax.’

SPACE THREATS

Human moon landings could be in peril from space junk. A massive, stray piece of a SpaceX rocket is on course to smash into moon, just one example of the dangers.

INTERNATIONAL SECURITY

Europe prepares for first total solar eclipse in 27 years on August 12, 2026.

US MILITARY

Pentagon needs doctrine and industry recommendations for age of autonomous warfare. U.S. must rethink everything to remain competitive.

Pentagon replacing long-used cognitive assessment with new test to better detect cognitive changes and support brain health monitoring for troops.

Naval Support Activity Monterey, California, is now home to Pentagon’s most powerful supercomputer.

Navy moving ahead on much-needed West Coast dock for aircraft carriers at Puget Sound Naval Shipyard.

END of PDB

Paul Crespo, a well known conservative commentator, and President of the Center for American Defense Studies, brings decades of experience and insight to the issues that most threaten America – at home and abroad.

As a Marine Corps combat arms officer, he served aboard ships with a Marine Expeditionary Unit — Special Operations Capable (MEU-SOC) in the Pacific, and jumped from helicopters and airplanes.

He was also an intelligence officer and military attaché with the Defense Intelligence Agency (DIA) at U.S. embassies in the Persian Gulf, Balkans and Latin America.

A graduate of Georgetown, London and Cambridge universities, he ran for congress, taught university political science courses, wrote editorials for a major newspaper and co-hosted his own radio show.

He has also been a private military and security contractor overseas in Africa and Latin America — and still dabbles in it, when called. But he now also brings all that knowledge and expertise to you.