As world leaders convene this week at the G-20 summit in Rio de Janeiro, U.S. president-elect Donald Trump is casting a long shadow—even though he isn’t there. The foremost question for countries and companies alike seems to be: ‘What will Trump’s return mean for us?’
There are a lot of unknowns, but Trump is more of a known quantity in 2024 than he was in 2016. On this week’s FP Live, I turned to the well-connected geopolitical risk guru Ian Bremmer, who is the founder and president of the Eurasia Group as well as GZero Media, for his take on how world leaders and CEOs—many of them his clients—are preparing.
What follows is a condensed and edited transcript.
Ravi Agrawal: Let’s just start with personnel, focusing on the roles related to national security. What do the choices of Rubio, Waltz, and Hegseth tell you about foreign policy in a Trump 2.0 world?
Ian Bremmer: Harder line, of course, in terms of China, support for Israel, and Russia. More balanced than what you would have heard from Trump or J.D. Vance. Frankly, if those were the only three posts we were focusing on, Hegseth is unusual in that he has no managerial experience whatsoever, so he really shouldn’t be Secretary of Defense. But Trump picked him as someone who looks like he’d play the role of Secretary of Defense. He is very telegenic in the way that Rex Tillerson felt like a Secretary of State when Trump first met him, even though they had never met before and their policies weren’t particularly aligned. So I don’t think we would find that surprising.
The more recent appointees that also matter for national security, if you think about national security from a broader perspective, are more surprising. For example, from the perspective of the stability and sanctity of the rule of law in the United States, Matt Gaetz is a very, very concerning pick. A lot of what Tulsi Gabbard has said, from the conspiracy theories she’s floated to the willingness to align more with American adversaries like Syria, Iran, and Russia — more what anyone in the foreign policy establishment, left or right, would accept— would be a greater concern.
And of course, the position that is not a position, but nonetheless seems to matter a lot is that of Elon Musk. I’m not talking about running the Department of Governmental Efficiency, which is a non-governmental organization with no particular authority. I’m talking about the fact that he is spending a lot of time directly with the president in key meetings, was on the phone call with Zelensky, and just met with the Iranian ambassador to the UN. That is a national security position, even if unappointed and that is very unusual for the U.S. and the rest of the world.
RA: Let’s talk about geopolitical risk, whether you’re a CEO or a business. Trump is unpredictable, yet stocks saw a bump when he won. The dollar has been rising too. What is your sense of how businesses around the world are viewing a second Trump term?
IB: Short-term, businesses feel very positive for the stock market as a whole. That is due to a combination of more fiscal spending—irrespective of the 2 trillion that Vivek Ramaswamy and Elon Musk promised to take out because Congress holds the pen on that and it’s not going to happen—and because sectors feel like there will be more regulatory rollbacks, particularly with the financial sector. That’s also true to a degree with the tech sector at large, things like crypto, oil, and gas. Pharma stocks, of course, took a major hit as a result of the RFK Jr appointment. But generally speaking, it’s seen to be a benign environment.
People expect tax cuts that were supposed to end to be extended under a second Trump term. That is problematic for other economies. It is good for the dollar, but bad for most emerging market economies around the world. Israel is one of the only countries that’s seen a bump in their currency. The Ukrainians have seen their bonds do much better because the markets are hopeful —rightly, in my view—that there will be a near-term ceasefire imposed with pressure from Trump on both Zelensky and Putin. But those are short-term responses.
Long term, there will be a lot of inflation in the United States as a result of tariffs and policies regarding illegal immigrants in the U.S.. You’re also going to see a lot of hedging because a lot of countries around the world feel that the United States is not a leader to be counted on and that the country’s values do not align with those of traditional American allies. Long term, that will lead to economic implications. But that is not the way the markets respond because they reflect immediate reactions and right now people are believing in the US economy.
RA: Wow, a lot of different issues there. I want to start with tariffs. This strikes me as the area where anything could happen. Trump has proposed 20% tariffs on all countries and 60% on China. Where are you expecting he’ll actually land? How are businesses and CEOs preparing?
IB: We know that Trump sees foreign policy through an economic lens and through tariffs. He cares more about tariffs than he does, for example, technology. Last term, he focused on 25% U.S.-China tariffs, which Biden maintained. So, Trump identified a policy that was going to hurt American consumers but aligned with the American public’s opinion, and Biden stuck with it.
So tariffs are very important for Trump. He would never try to roll them back. Even before Trump was a political contender on the national stage, he was against trade deficits. But Trump is also focused on more jobs, capital, and investment at home, and using subsidies and tariffs as incentives.
Even though many billionaires and CEOs are aligned with him, he doesn’t have the Chamber of Commerce on his side like many Republicans historically have had. That’s because he’s rejecting globalism. He doesn’t want to let multinational corporations do business in an unfettered way around the world; he wants them to come back to the United States.
I think we should expect more tariffs which he will negotiate. I don’t think anyone believes that 60% is a feasible tariff rate for China, especially because of the damage it would do to the U.S. economy. But that conversation will drive the potential for a deal with China, which is under a lot of economic pressure. It will also drive companies to decouple from the Chinese market more quickly than they otherwise would, which would accelerate the process because the Chinese economy itself is performing so badly.
Now, will he also hit the Europeans, the Japanese, and the Mexicans on with tariffs at the same time? He’ll do some of it at the same time because he wants to hit corporations acting as passthroughs for excess Chinese manufacturing, which is the only thing that’s working in the Chinese economy right now. Robert Lighthizer and other parts of the administration will focus on that.
He’ll also be asking the Europeans to spend more on NATO, saying 2 percent is not enough. I expect Europe will say that 3 percent is an appropriate amount and then some of that will be paid out in trade concessions. Same thing with the Japanese and the South Koreans.
RA: I’m also curious about market signals for deportations. Trump has been clear that he wants to deport illegal immigrants, we don’t know how many. It’s also clear that Americans are angry about a porous border and an asylum system that has been prone to abuse. What is your sense of how many deportations he might start with? What market signals will you be looking for as potential checks on any attempt to deport people?
IB: I think the Trump administration is willing to accept economic costs, inflation, and challenges with labor rates and availability on the back of illegal immigrants because they have the law on their side. A lot of corporations are taking advantage of the fact that they’re working with undocumented people. Donald Trump is trying to do something about that. That is a very popular policy in red states, but it’s also popular in blue states. There were a lot of sanctuary cities across blue America. That sounded great in theory until those migrants showed up on their doorstep. It’s exactly what we’ve seen across Europe, and all of those governments ended up tacking towards the right. I think in the U.S., Trump’s policies on migration will become far more mainstream.
That’s very different from what we’re seeing on inflation. Migration has been a big issue that will move in Trump’s direction. Inflation is a big issue that would have moved in Trump’s direction if not for policies on tariffs, migration, and fiscal spending. Interestingly, gas prices are going to help him with inflation. Under Biden, the U.S. is producing 13.5 million barrels a day, more than ever before. That number is going up under Trump. In his first year, it might be 14 million barrels per day and if there’s more tension in the Middle East, maybe more. That means energy prices are going to be lower, which will have an outsized impact on consumer sentiment. So in some ways, Trump might be better set up in the near future on some of his domestic indicators than you otherwise would expect.
RA: One thing that’s linked to “drill, baby, drill” is climate change. This is another big area of divergence between Trump and Biden or Trump and Harris. We know that Trump might try to roll back some of Biden’s plans to promote and subsidize clean energy. What is the private sector going to do? Have market incentives changed enough that clean energy is just the way to go no matter what? I was struck by the news that the Exxon Mobil CEO said that he wants Trump to stay —
IB: In the Paris Climate Accord? Yes; I bet that wasn’t on your bingo card. Back when the company was just Exxon, they were commissioning research on climate change, covering it up, and actively lying about it. Now, post-carbon energy investment at scale works extremely efficiently. The costs of wind and solar have come down exponentially. So Texas, the oil and gas capital of the U.S., also turns out to be the post-carbon transition energy capital of the U.S.. Just like China is the carbon emissions capital of the world, but is also the nuclear, wind, and solar capital of the world.
Trump is going to enact policy in favor of CEOs of oil and gas companies with whom Biden wouldn’t even take meetings. But Trump is not going to stop developing transitional energy because too many jobs in red states rely on it. That will also limit how much he can roll back some of the subsidies from the Inflation Reduction Act.
RA: Okay, let’s do a tour of the world, starting with China. How are you gaming out U.S.-China relations under Trump?
IB: I was just in China a few weeks ago, and this is by far the worst economy they have had since the 90s, maybe even since the 70s. It has led them to be more risk-averse and cautious towards most other countries. That’s why they were willing to pull troops back from the contested border with India and why Xi Jinping has had his first bilateral summit in five years with Modi. That’s why China is reaching out to the Japanese for a summit meeting, which I expect will lead to some economic measures that feel like breakthroughs, even if they’re more marginal. That’s why they’ve reached out to the Europeans. They’ve become “more carrot, less stick” around electric vehicle tariffs. So they are more inclined to do a deal with the Americans.
RA: What do you mean by a deal?
IB: For example, if Trump were to say “there’s going to be high levels of tariffs unless you’re willing to offer concessions,” the Chinese would be more willing to talk about what concessions might look like.
In the other direction, Trump’s formal appointees so far are overwhelmingly hawkish on China. Not just on the economic side, but also on issues like the South China Sea and Taiwan. So day-to-day, the Chinese are going to have a harder time with the Trump administration.In the last year, since the APEC summit in San Francisco, there’s been a series of open and constructive high-level relations with the Biden administration. We’ll be unlikely to see that under the Trump administration. Marco Rubio will also be the first Secretary of State who has ever been formally sanctioned by the Chinese government.
Lastly, Trump does not care about the value system or political system of another country. So the fact that China happens to be a dictatorship has zero bearing on Trump’s willingness to do a deal with them. It mattered a lot to Biden. Biden’s worldview is autocracies versus democracies—bad guys versus good guys— and China was always going to be in the bad guy camp. Trump does not see it that way at all; he doesn’t care about the Uighyrs, the genocide in Xinjiang, human rights, or the lack of independent media. In many ways, Trump is more interested in making the U.S. like China than he is in making China like the United States.
RA: A note there: Rubio demonstrably cares about the Uighurs, enough to pass legislation there, but you’re making the point that Trump would just ride over that.
IB: Trump is not Rubio, Ratcliffe, or Hegseth. They’re all pretty consistent on China, but Trump has no interest in talking about things like human rights. Trump’s view of Xi Jinping is just like his view of Kim Jong Un and Putin. He thinks, “if I can cut a deal, I’m going to cut a deal. I don’t care if they’re aligned with me or not. Common values are something that other countries use to make me look like a chump, but I’m actually more powerful than they are. So if I sit down one on one, I have more leverage to get a better deal than other presidents who are averse to using that power.” So irrespective of what his advisors have said, when Trump sits down with Xi Jinping and senses weakness, he’ll feel he’s going to come across as absolutely brilliant.
And by the way, it’ll be very interesting to see if Elon Musk will be on that first phone call between Xi Jinping and Trump. He was on the Zelensky call, but it matters much more if he’s on the Xi Jinping call because this is a guy with major business interests in China. He is vastly more careful about what he says on Twitter/X about the Chinese Communist Party than about the SEC. So if there’s anyone in Trump’s orbit who wants to facilitate a better relationship between the U.S. and China, it is the guy with the most power who isn’t appointed to a position.
So the US-China question with Trump is an extremely interesting question—it is tilted towards an iteration in the relationship, or even a marked deterioration of relationship, but do not discount the idea that we could see a major breakthrough.
RA: I’ve got to jump to Ukraine. You mentioned this earlier just a little bit, but what are you what’s your sense of a chance of a breakthrough on a deal between Putin and Zelensky?
IB: As I mentioned before, the reason why Ukrainian bonds are outperforming is because the markets expect that we’re going to see a ceasefire. I think the markets are right. Whether or not that ceasefire is durable, or if it allows Europeans to stay together, those are open questions. A number of European allies may say, “I want to work with Russia again,” or “I want to be aligned with Trump.” You could easily see a number of European allies who want this which would deeply undermine Europe’s power.
But Ukraine is going to be partitioned and lose 20% of its land. I want to be clear; I am not happy about this outcome. My analysis has nothing to do with my personal preference here. But Ukraine losing 20% of its land, which is already the de facto reality, does not necessarily mean that Ukraine is overthrown, that Zelensky is out of power, or that the Ukrainian economy collapses. Trump does not want Ukraine to collapse under his watch.
RA: And is the remaining 80 percent of Ukraine’s land protected by Europe?
IB: That’s an interesting question. Many countries in Europe would be prepared to send troops to protect that 80 percent—Poland, the Baltics, the Nordics, maybe Romania, possibly France, though I doubt it. But they’d be much more likely to do it if it had NATO’s blessing and backing from the U.S.. I have a hard time seeing that under Trump. In fact, I expect Trump would be willing to say “no NATO” under a peace deal between the Russians and the Ukrainians.
RA: I want to get to the Middle East and Iran specifically. In Trump’s orbit, you have a group that wants to go in and bomb Iran’s nuclear installations, and another group that believes in the End Forever Wars movement. Who’s going to win out there?
IB: The two sides can be aligned in the sense that Israel has proven to have escalation dominance in the region. So far, the Iranians have not been able to do much of anything in response. The potential for further strikes against Iran has gone up with Trump’s win, but this is particularly true if Iran does anything against Israel in the coming weeks. In the past two weeks, the Iranian government said they’ve been seriously thinking about more strikes, probably through proxies in Iraq against the Israelis. They have now reconsidered that because they understand they cannot give Israel any excuse to decapacitate the Islamic Revolutionary Guard Corps or take out the nuclear capabilities to a greater degree. So there is a risk of escalation, but I also think there’s potential for a deal. The Iranian ambassador to the U.N., was meeting with Elon Musk yesterday for an hour. So, might Iran offer a much more significant, intrusive nuclear deal than the JCPoA that Obama signed multilaterally, but that Trump unilaterally walked away from? Yes, there’s a chance.
Trump is not committed to a lot of norms that the United States has stood for, but he will, as of January, be running the most powerful country in the world. And there are enormous numbers of countries that will kiss his ass much harder and more repeatedly than they would have four years ago, or than they thought they would have two weeks ago. That means Trump has a high chance of gaining some foreign policy wins in his early months in office.
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