President Trump’s first 100 days in office have already started to reshape international trade, but tariffs and other trade policies are also reshaping international geopolitical relations.
“Marketplace Morning Report” host David Brancaccio spoke with Ian Bremmer, founder and president of the political risk consultancy Eurasia Group, for more on the side effects of Trump’s trade actions.
The following is the edited transcript of their conversation.
David Brancaccio: You’ve written this, but say it aloud for us, the tariff policy is the most what?
Ian Bremmer: It’s the greatest act of geopolitical self harm I’ve seen in my career as a political scientist.
Brancaccio: All right, but what about as a bargaining tool for the Trump administration to get some countries talking about their trade policies and other arrangements. It works that way, to some extent…
Bremmer: It should work that way. And the U.S. is, of course, the strongest economy. It’s the most powerful country in the world. But for example, if the United States is trying to get a whole bunch of countries that are aligned to work with the Americans, to push the Chinese hard, to further de-risk, to decouple, specifically in areas that are important for national security, the worst way to go about that is to pick on your friends at the same time.
Brancaccio: And on the subject of prompting or forcing negotiations by jacking up tariffs, does that work with China, actually, in practice?
Bremmer: No, it’s going to work with a bunch of weaker countries, smaller countries, countries that desperately need a deal with the U.S. With the Chinese, they aren’t even talking to the United States about trade. And the fact is that they can take a significant hit.
This is going to be about 2% of their GDP, but they are convinced that they can outlast the Americans politically, in terms of pain they take. And they also see themselves as major long-term beneficiaries as other countries around the world hedge more towards China. And as the Americans refuse leadership in multilateral institutions with the global south and lots of other areas where the Chinese are the number two player, they’ll become more dominant.
Brancaccio: One last question here, I guess it gets at the new world of trade and new alignments that emerge. Does it matter, outside of India, when you see that workers in India will put together the iPhones that Chinese people have been assembling and then getting and then Americans have been buying?
Bremmer: Yes, China has an economy that has not been performing very well, so the fact that the United States and other countries have been trying to de-risk, and now Trump is leaning into a very tough, basically a trade embargo position on the Chinese, that’s going to be a benefit to India, first and foremost, but also Vietnam and countries across Southeast Asia that I think is going to be a long term structural move.