The Hague’s ruling on the Philippine’s case against China’s ac- tions in the South China Sea was released on Tuesday, July 12th 2016. Chinese President Xi Jinping immediately rejected the China-boycotted proceedings of the Permanent Court of Arbi- tration, which ruled that China’s historic territorial claims have no legal standing. 1 To neighboring countries with claims to the contested islands, this ruling addresses economic opportunity and sovereign rights. For the United States and close allies in the region, the potential insecurity from these actions needs to be examined with a focus on military and strategic security concerns. China’s stated reason for opposing other countries’ regional claims on the South China Sea is based on their ‘nine-dash line” that give little clear claim to the control of the surround- ing small islets and reefs. This reason is what was specifically rejected by the Court. So, it is possible that the historic claim is the extent of China’s ambitions and objectives in the region. From a regional and strategic perspective though, even if this reason were true, it does not explain the building of new islands and fortifications throughout the South China Sea. Thus, it 26 is worthwhile to explore other plausible reasons for China’s actions, their impact on the situation, and potential responses from regional partners and the US. A range of responses can be developed from this analysis. Having a range of options available will give the US the flexibility to respond differently depending on the actions or reactions of China and others in the region. The competing claims of the South China Sea are of direct economic concern to the US for many reasons, the most signifi- cant being the importance of this body of water for world trade. The South China Sea is important b ecause more than half of the world’s annual merchant fleet tonnage passes through its waters, and a third of all maritime traffic worldwide. 2 Drastic conse- quences could evolve for global trade if China were to have fundamentally unobstructed control of the region and chose to use that power. In a similar economic light is the contested ownership over the resources in these waters, with each country laying overlapping claims. This is an area in which The Hague ruling plays an ex- plicit and key role.