Geopolitical Whiplash: Josh Rogin On The New Global Order

Sure, Michael. Thanks for having me. We live in a time of unprecedented volatility, unprecedented uncertainty, unprecedented grift, corruption, and unprecedented policy and political change. All of those things are forcing the long-held silos between sort of the Wall Street analyst community, the DC analyst community, the Silicon Valley analyst community, and analyst communities all over the world in various capitals to break down those walls and deal with each other, because now, more than any time at least in my lifetime, what happens inside the hallways of Washington—boardrooms, meeting rooms, congressional hearings, and the White House halls especially—affects everybody more than ever and more often than ever.

And so the premium for political and policy intelligence—and this is the thesis that we're building this business on—is that premium has never been higher. That's not a great situation for a lot of these investors, for a lot of these industries, for a lot of these foreign countries. Nevertheless, there are lessons to be learned from what happened in the first Trump administration. That's what I did in the first Trump administration: I spent four years mapping the factions, how the bureaucracy interacts with the political layer, how the factions change over time, how Donald Trump's decision-making process works (such as it is), and how that interacts in many cases with what's coming out of Wall Street or Silicon Valley, or who's calling him on the phone, or what's coming from Congress.

The biggest insight that I can give your audience, Michael, is that there is a method to the madness, but that method changes. What that means is that the types of information that matter are consistent, but the ways of getting that information are always changing because the personnel are always changing. So, it just requires having a plug into Washington that's better than the next guy sitting next to you, that's better than the guy that you're competing against. That's what we're trying to offer. That's the whole premise of Washington Post Intelligence. And yeah, we can take that in really any direction of analysis that you want.

When I talk about mapping in the first Trump administration, especially when it came to my focus area, which was the U.S.-China relationship—but you could really apply this to any regional or functional area—it's factions. There are teams, and those teams don't necessarily fall upon the lines that you might predict. The factions form what I call assorted alliances based on overlapping interests on an issue-to-issue basis. Those factions change over time as people get fired, and a rolling round of political purges takes out people on either side for whatever reason.

We're seeing all of that this time. The factions are different; the people, the personalities are different. But the basic constant churn of people trying to find other people inside Trump's orbit to get enough momentum to get into Trump's ear to win the day, and then hope they don't get squashed the next day—that's the first thing: you just have to figure out who's working together on what. Some of those people will be like these MAGA world people, like Steve Bannon. Some of them will be the sort of tech-bro oligarchy—Peter Thiel, Elon Musk world. Some of them will be Trump's buddies who call him on the phone late at night—Steve Schwarzman and other titans of industry who have their own—Steve Wynn, or whoever it is. Then you have the people who actually work in the government, who often are the last to know about these things, but they also have their own levers of access to the president. And what they do is they're also trying to manage down into the bureaucracy.

So you have to do constant mapping of these things to understand who's saying what and whether or not that will matter. That's a very time-intensive task because you have to know people in all these different nooks and crannies of Washington to get that information. And the problem, I think—not to be critical of anyone in particular, but I think a lot of the Wall Street analysts who are trying to track all this stuff, they have sources, but they're not professional analysts or journalists who are vetting those sources. They're regurgitating what those sources are saying.

So, you're getting lots of, especially this week, you're just getting a lot of very well-connected Wall Street guys who either think they have the president's ear or they think they have a really great source inside the administration. They probably do, but that's just one source. And so that's why the markets are jumping up and down based on one tweet or this tweet: 'Oh, this guy seems reliable, he's got a real source.' But as a journalist, I'm here to tell you one source is not enough. And especially in this environment, you got to have a lot of them.

And so I think we see a lot of trial balloons. A lot of these tweets are people trying to either communicate to Trump through the media, some of them are trying to game the markets for their own corruptions, and some of them are genuinely trying to call balls and strikes, but they're just not seeing all the different parts of the elephant at once. And that's chaos. That's information chaos. Finding the signal in that noise is a constant, grueling task that most people I see, at least on the TV side of Wall Street analysis, are just not committed to putting in the spadework to do.

Yeah. No, I agree with everything you said. Actually, I think that what's different—let's start with the book. So, what I did with the book was to describe how what we saw in the headlines in terms of the trade war, the technology war, and the overall shift of the United States foreign policy aircraft carrier in a different direction towards a more competitive and even confrontational strategy against our only real peer competitor, China, how that really happened and played out inside the administration and around town.

At that time, the factions were, roughly speaking, national security hawks versus more engagement-focused Wall Street guys. And that was essentially, for the sake of time, I'll simplify it, the fault line. You had Mnuchin versus the John Boltons and Mike Pompeos and Mike Pences, and then Trump was heavily influenced by guys like Steve Schwarzman and Steve Wynn. That was the basic thing.

And that's different now in a really important aspect, in that you have what I think is the most hawkish regarding China economic team from jump that we've ever seen. We could debate whether or not Scott Bessent, Treasury Secretary, is hawkish or playing a hawk on TV, and we can debate whether or not Howard Lutnick understands the hawkish things that he's saying on China. Some people don't think he seems to. But overall, and there are fault lines inside this administration—Elon Musk, who's not hawkish, etc., and Peter Navarro doesn't agree with Scott Bessent—but overall, strategically, when you think about the need to confront, have some big sort of competition and confrontation against China economically, for whatever reason, they're pretty much in lockstep. They're just not in lockstep on how to do it. So that's one big change.

The other big change, I think, is that in the first administration—and this is what the book describes—you had a very slow playout of all these dynamics. You had Gary Cohn lead an effort to engage with China while the hawks like Peter Navarro sat back and let it fail over the process of months. You had early engagement with the Chinese leadership at Mar-a-Lago, and then you had a series of negotiations which failed. Then you had tariffs. Then you had sanctions. Then you had export restrictions. And then, all of a sudden, the hawks were like, 'Oh, this is great. We're going to decouple.'

And then Trump struck a deal, and so then a lot of those things, some of those things went away. And then we had a détente, and that détente lasted exactly two days because the deal was struck on January 15th, 2020. This is a great scene in the book, by the way. Two days later, COVID hit. Two days later, we found out, and then everything changed. Trump and Xi's relationship dissolved, and all of a sudden, the hawks were back, and Trump said, 'Do whatever you want to China. I don't care.'

Then we had a situation where Larry Kudlow and Robert O'Brien, the National Security Advisor, got together and had the most hawkish year of Chinese economic warfare against China economically that I've ever seen, that I think we'll ever see. That's when we started to get into the capital markets. That's when they started to mess with the TSP, and CalPERS, and the PCAOB, and all of those sort of things that all of you guys on Wall Street think you're doing to manage the U.S.-China capital relationship that most of us here in Washington think are all nonsense and really just paper over a lot of really horrible structural issues in our U.S.-China capital market.

So we can get to that if you want to, but I never saw in 20 years anything happen on that until the pandemic hit, because then there was no incentive to hold back. So the point is that all of that played out over four years, and now it's all playing out over four months. And that's crazy. Okay. And so what does that tell us? It tells us that Trump's not patient. Okay? He's not going to go through three years of this and that and see what happens. He wants it all done now. Not just China—he wants the Ukraine war to end right now.

The problem with that, of course, is that none of these other actors, especially none of these other countries, are going to agree to that, because why would they? Because it's the absolute wrong way to negotiate. So all that we've really seen ever since Liberation Day is the Trump administration negotiate against itself. And if you are on the other side of any of those negotiations, why would you do anything at all? You don't have to be an analyst to see the obvious fact that if you're a negotiating partner negotiating against himself over and over, you might as well just wait and see what happens.

And then, of course, you have all these allies. We had competitive tariff and trade protectionist measures in the first administration against the EU and allies, and deals were negotiated—I'm thinking about Japan and South Korea right now. And now Trump is saying all of those deals are no good; you got to give us better deals. And of course our allies are like, 'Okay, what do you want?' And then the White House says, 'We don't know. What do you want to give us?' And then they're like, 'We don't know. What do you want?' 'We don't know. What do you want to give us?' 'Okay, see you later.'

That's what happened this week in Washington. We had the World Bank-IMF Spring Meetings, which brought finance ministers from every country in the world within three blocks of the White House, okay? And they took a bunch of meetings. They're trying to get 90 deals in 90 days. They got zero. And all of these diplomats and finance ministers, every single one of them said the same thing. They're like, 'We can't even talk to these guys. They have no idea what they're doing. They have no idea what they want.'

So that's what I talk about when I talk about an unprecedented level of uncertainty and volatility. That's the big difference: the chaos of four years of Trump 1 is now being, has now been shrunk into four months, and they don't know what happens tomorrow. It's obvious they have no strategy, because the strategy changes every day. And that kind of improvisation may work out. If you talk to Trump economic officials, they'll say, 'Hey, don't be so pessimistic, Josh and Mike. Why are you being so negative? You must hate Trump,' or something like that. 'And what if it all works out? Then you're going to look like an idiot.' To which my response is: A, that's a hell of a risk to take with the global economy on a whim; and B, going back and forth in this kind of knee-jerk reaction and dragging the whole global economy with you has horrendous long-term and short-term consequences for real people who suffer because of the collateral damage.

We're only starting.

I think that's the key question, because I think there's no plan, but there are goals. There are objectives. And I think, again, once you get past the headlines, for investors, it's really important to know what those objectives are, because that is real information and that will guide their decision-making, even if we don't know what the decisions will be.

So when I talk to White House officials, Treasury officials, Commerce officials, they describe broad objectives, right? And they're not necessarily consistent, but one is the onshoring of manufacturing. So if you think about that, that's a real objective. That's a campaign promise. That's a political necessity for the president, and will factor heavily into the 2026 midterm elections. And so he's got to make progress on that. That's why he's always announcing these trillion-dollar deals, whether they exist or not, and that's why all of the things that he's trying to extort out of these foreign countries really involve investing in American manufacturing to shore up certain key sectors that he thinks are his key political constituencies, whether it's autos, or steel and aluminum, or just manufacturing in general.

Ignore the stuff about the socks and underwear being onshored and the bananas from Brazil being onshored, because obviously that's not going to happen. They know that. Even though the haphazard way in which they set up the tariffs didn't reveal that kind of nuance, obviously in the end, everybody knows where the onshoring opportunities are: semiconductors. So that's a really good sort of lodestar. Now, if you're asking me personally, do I think that killing the CHIPS Act and then trying to strong-arm Taiwan into paying for their own economically disadvantageous move of all of their supply chains out of their own protection—no, I don't think it's going to work. Analytically, I don't think it's going to work. But that's a really big one.

The second big long-term objective—and this will get to your question of what are the dates to watch. So onshoring of manufacturing has a pretty good timeline because he said 90 deals in 90 days. So that takes you to mid-July, right? Roughly. Okay. Now, revenue. So they need the tariffs to produce revenue. Now again, if you ask Navarro, 'Is it about revenue?' he'll say no. If you ask Bessent, he'll say no or know. But if you ask Trump, he'll say yes. Are we trying to get revenue out of those tariffs? That's what the president says. So that's an objective.

What does that mean to me? That means that those 10% broad-based tariffs are here to stay because that's the revenue. That's the constant revenue. Now again, will it work? Will it actually produce the revenue? I don't think so. But we're trying to understand the mindset of the people who are making these decisions. That's a really important one.

Now, how long is that relevant? It's relevant exactly until the moment that they pass the tax bill, and not a moment after. Then they don't need to show revenue because they're going to try to claim that this is revenue to offset whatever tax cuts they're going to have. Again, it's not true. It doesn't make sense, but that's what they think. Politically, it makes sense anyway. So when is that? Mid-July, right? There's a congressional recess starting in late July. If it goes to September and October, it's a really bad idea. They've got to get it done by mid-July, by the time they leave town. That's basic congressional calendar stuff, okay?

So if you look at the deals and then you look at the tariffs, it's all around mid-July. So I think that's really the point that a lot of people—now you tell me, because you know this better than me: is that when the stocks run out? Is that when these companies who have warehoused supplies in anticipation run out of their prepositioned supplies? Is that when the supply chains break down? Is that when all the ships that were going to be sent are going to be sent? Is that when the small businesses who can't get stuff from China cheap anymore are just going to have to fold? A lot of people that I talk to say that's about two to three months—mid-July, right? So there's a perfect storm happening in mid-July.

Now, that's a snapshot analysis, because everything could change tomorrow. And what I think I'm seeing right now is that Trump's going to climb down from a lot of this stuff before then, and I think the tax bill will get passed for sure, and probably in that timeline. But what will it look like? And then the other thing I think people should just take a very close look at is when the federal budget comes out, because if you want to know the Trump administration's priorities, they're all in there.

And also, we're waiting on a lot of people inside the Commerce Department and the Treasury Department to take up their posts, and that's really important. Actually, we have a CFIUS process that's not functioning right now because no one's in charge of it. But that's a big thing. We have the SEC, the FCC, and the FTC all threatening all of these anti-competitive-against-China measures, but we don't see them.

We've got an America First investment policy—I don't know if your investors have even read this, but it was put out by the National Security Council. It's pretty interesting. What's in there? Outbound investment restrictions targeted on China. It doesn't say China, but they're targeted on China, using all sorts of new tools. You can use IEEPA, the sanctions bill, for tariffs. It's controversial. Maybe it gets challenged, maybe the courts knock it down, maybe they don't, maybe it goes to the Supreme Court, maybe it doesn't. But what about using it for outbound restrictions? That's a whole 'nother mess, but that's in the document that no one read while we were talking about invading Greenland. But will that actually happen? I think it's going to take a few months to play out.

So there are a lot of bouncing balls to watch. But I think by mid-July, if there's a stabilization to be had, that's when we'll see it.

So if you're talking about mid-July and how some tariffs potentially are going to be on for revenue's sake, for budgeting reasons, what are some of the scenarios you potentially see for how tariffs play out, in terms of the optimistic 'they'll go away' to 'they're on for good'? What are some of the potential outcomes? Because that seems to be a lot of what investors are trying to game out.

Yeah, that's a great question, Steven. When I think about that, I think about it on a country-by-country basis, and I put these countries into three basic categories. One are countries that are allies that have an incentive, that are mostly, more or less democracies, and that have not only great relationships with us, but have the first-mover advantage, because the best deals go to whoever shows up first. And amongst those, the most important ones are the ones in East and Southeast Asia and South Asia. So this week, they spent all of their time with the Japanese—it didn't work. And the Koreans were here, and the Indians—they might get the first deal, actually.

So I think of them as a category for two reasons: one, because they have the first-mover advantage; two, because they have a big disadvantage, which is that they have to respond to their own domestic politics. Most of them already have trade deals. They don't want to set a precedent of renegotiating the thing they already negotiated, since they negotiated it with Trump. So how can they sell to their constituencies that this Trump deal will stick more than the last Trump deal, which this Trump deal is undermining? And so, in a way, they have a huge disadvantage.

I think what's going to happen with them is that they're going to end up making more agreements amongst themselves. I see a lot of chatter, a lot of interaction between Australia, Canada, the EU, Japan, and Korea amongst themselves, not with us. It's like when we pulled out of TPP—they just did it without us. So we're going to see a convergence of interest amongst, quote-unquote, 'Western-style democracies' to get to the front of the line, and if they can't do that, then cut their own deals to hedge.

The second category are countries that we can step on, who are dictatorships who can just bribe us, and Vietnam and Cambodia come to mind, okay? Cuz no one should be surprised that we can lean on Cambodia and Vietnam, because they're poor countries and there's no conception of them being able to buy enough stuff to even out their trade imbalance with us buying their textiles, cuz what are they supposed to buy? They're poor countries. They don't have any money. I don't want to disparage them—rooting for them, don't get me wrong—but you get my drift.

So their disadvantage is that they can never do the thing that Trump wants. They can't build chip factories in Arizona, and they can't buy enough widgets from Michigan to make up for the bananas they're going to sell us. So that's their disadvantage. But they have a huge advantage, which is that they're not democracies—they can do whatever they want. They can just bribe the crap out of the Trump people, the family. And again, I'm not endorsing this. I'm not recommending this to all you investors out there. Be very careful before you go down this path, because I see a lot of CEOs, especially in Washington, asking their general counsels, 'Where's the line? How much can I bribe these guys? Their hands are out.' And some of them are crossing that line, and some of them aren't.

The repercussions won't come because the Trump administration has dismantled all of the oversight and law enforcement mechanisms that would catch all of this public corruption. But what if they're not there in four years? Will you get a pardon? I'm pretty sure they're going to get pardons; are you going to get a pardon? Don't go there. But analytically, yeah, that's what Vietnam is doing. They're going to build a tower in Hanoi. It's going to be crazy if it actually happens. Again, I don't think it's going to work, but that's their strategy: to just bribe and hope that gets them out from under. So that's the second category.

The third category is China. That's its own category. And we can take that in a lot of directions, but the U.S.-China relationship is the most important bilateral relationship in the world for the rest of our lives. The economic de-risking is ongoing, and it's likely to speed up. But as it does that, Xi Jinping has a unique set of tools and a unique situation of resilience. And he has something that President Trump doesn't have, which is a thought about what happens like next week. In this environment, that's a huge advantage for them. We have our own advantages, of course, but right now it seems as if the Chinese strategy is to step aside while we hurt ourselves, and I don't necessarily blame them for that.

That's incredibly interesting. As investors, we always try to fit things into a box and everything's binary, so the fact that there's these different categories and it's very country-specific, I think, is a great takeaway. And then the other thing that as investors we do: we think very short-term—days, months, minutes, at most a quarter. You mentioned China here and that being its own category. Can you demystify the timeline of how a trade deal could transpire? We're always looking for historical parallels. What are the milestones? What needs to happen? I feel like that's also really topical this week because you have certain parties saying we are talking, we aren't talking. How do these things work?

There is no historical precedent for what's happening now in the U.S.-China relationship, but there are patterns. What I mean by that is that when I interviewed President Trump about this issue—and this is in 2021, so he was out of office, but recently out of office—what he said was not at all what any of his officials have ever said on the U.S.-China economic relationship. What he said was, 'We were so close to—we made a deal. We almost solved the problem. We almost avoided the Cold War. And if the pandemic hadn't struck'—I'm paraphrasing lightly, but this is basically what he said to me—'that deal would have stuck, and we would have avoided the Cold War, and we would have had what essentially is a new model of great power relations with the United States and China.'

And that roughly is Xi Jinping's strategy. If you look back to 2012, right before Xi Jinping came to office, he's been talking about it for that long. Essentially what some people call a G2, where the U.S. and China divvy up the world based on spheres of influence—and you could add Russia maybe, in Trump 2. You could say U.S., China, and Russia divvy up the world into three spheres of influence, and they agree to non-interference in each other's sphere to a degree, and then they divide the spoils, and the rich get richer and the poor get poorer, and might makes right, and those who don't like it lump it.

Now, I went through that to emphasize Trump's personal view, because what I think is different in Trump 2 is that his personal view reigns, and anyone, even the people who disagree with him, are just trying to craft their plans and schemes into reaching that view. So again, I don't think it's going to work. My personal analysis is pretty well established on this, Steven, which is that that's impossible, because Xi Jinping's goal is not to have peaceful coexistence; it's for China to be the preeminent power economically and militarily, first in the region and then in the world, at our

expense—in other words, that they mean us harm, that there's no balance of power to be achieved, and therefore we should understand that and plan accordingly. But that's neither here nor there. To answer your question directly, how will this happen? What it means is that they will get to a negotiation. As everybody knows, all of these things from China's perspective are preparations, staging for that negotiation, filling a quiver with arrows, huge piles of carrots, huge piles of sticks. And I think their retaliation is calculated that way, too, because the things that they're doing to retaliate for our very broad and crude tariff policy—even in the first administration, the tariffs and the export controls were very intentionally crafted, focused on high technology, adjusted over time based on what was going on, and strategic, not always, but to a degree. But now 145% tariffs on trinkets and widgets and bicycles, and it's just crazy. So the Chinese are being a lot more deliberate because they're preparing for this negotiation.

Now again, when does that happen? We thought that it would happen after President Xi and President Trump met in June alongside, I guess, the international conference that they were scheduled to both be at. And right now it seems that Xi Jinping is giving President Trump the Heisman because he doesn't want to give up any leverage in advance of that meeting. But that's what I think is going to happen. I think it's the G20 in Argentina. Anyway, there's a very big upcoming international summit where I think they're going to meet. That's when this all starts. And so they're going to meet in person. "We had a great meeting. Everything's going to be copasetic. Now we're going to delegate our envoys and our teams." And this reflects not the Trump style, but the Chinese style of setting up any of these things, which is that there has to be intense preparation, then there has to be a leadership-level sign-off, and then there has to be teams of people deployed after that leadership-level sign-off. That's how the Chinese operate. They're not going to change that, certainly not for Trump.

So again, let's say they meet in late June, then, okay, now the negotiations are on and they have some sort of partial climbdown to signify the good faith of the negotiation—a confidence-building measure. In other words, what does that lead to? When do the negotiations really start? Mid-July. We keep coming back to that date. So that's how I think it's going to go down. Now, what happens in those negotiations? That's probably a whole another podcast. But suffice to say, they will be rocky, and they will go back and forth, and everyone following them will try to time them and fail to time them. Because you can't—I always hear Wall Street guys like, "You can't time the market," but you can't time the Trump administration. Okay, so the markets are trying to time the Trump administration, they're failing, and the investors are trying to time the markets, they're failing. I guess that's like a corollary to don't try to time the markets: don't try to time Trump.

Right, on a tweet, as Wall Street guys try to screw each other out of money on the way down. That's what they're trying to—they're trying to game each other's expectations as the ship sinks.

That's right. And everyone's talking about who holds what cards. And I think perhaps what you meant, it's not about the cards, it's about the players here and understanding how the players are going to react.

Yep. So on that, President Trump has talked about how he holds the cards with the China-US relationship. And I thought you made a really good point. I heard you this week on CNN and you were discussing this, and you made the point that perhaps, yes, the US has some economic leverage because we consume a lot of China's exports. Though in entirety, China is probably less dependent on the US than we are dependent on them. And the point you made, which I don't think is being focused on as much, is the policy resilience and how Trump has realistically not four years to get this done, but really two years to get something done, if not shorter, because it needs to be done in time for things to recover from it before the midterms. Whereas China has arguably an indefinite amount of time and resilience from a political perspective.

I think there's a couple of things here. One is, it's pretty clear to me—again, I'm not a market analyst, but it's pretty clear to me that the US economy is more dependent on China than the Chinese economy is dependent on the United States. So from that point of view, who can last longer in a race to the bottom? It would be China. And the second point was politically, it's a socialist state run by a dictator who wields generally totalitarian power. There are internal dynamics in China; there are internal pressures. There's no democracy, but I'm not saying Xi Jinping doesn't have to respond to his constituencies. I'm just saying that push comes to shove, he can just kill them, okay? And we can't do that. So you have to understand that, yeah, if it's about who can take the most pain, Russia can take more pain than Ukraine, China can take more pain than the United States. That doesn't mean that they're going to win. It's just one of the data points.

Now, what I'm focused on, and my reporting is really interesting, is how the competition for all these other countries—the frontline states in Asia first of all, but then Europe more broadly, and then what is sometimes called the Global South—this is where the action is. This is where they will tip. In any sane world, all of the countries that are our allies, like NATO allies, EU allies, Asian allies where we have bases and relationships and trade agreements, they'd be on our side. And that would tip the balance. That would mean we would have all the leverage we need to extract the concessions that we want, or survive out the Chinese retaliation through friendshoring, etc. But the Trump administration decided to wage economic war on all those allies simultaneously, which to me seems pretty stupid, but here we are.

And the latest iteration of that stupidity, in my opinion, is that after they decided that we're not going to do worldwide tariffs and we're just going to do China tariffs, then the next day the message from the Trump administration was, "Oh, now we're going to get these Asian countries as a concession to decouple with China." And of course, all of them were like, "No, that's crazy. We're not going to do that because we live in this neighborhood and they're our number one trading partner in many cases." And it's long been a pillar of US policy in Asia that we don't make countries choose, at least not explicitly. Militarily yes, economically no, because we're going to lose that battle, because China is going to have the biggest economy in the world for the rest of our lives and they live there. They're in that region. It's obvious they can't move.

That was last week and early this week actually, like, "Oh, let's force Japan to decouple from China." Now the Japanese, who are the most hawkish on China amongst a lot of these countries, they can't do that. They can't justify it. They can't even talk about it. It doesn't make any sense for them. We're pushing them to do something they can't do. It's not really going to work. And then when it comes to the Europeans, all the European CEOs, investors, bankers that I've been talking to this week—and most of the officials are more dramatic about it. All of the EU officials are like, "Oh, we're going to break from America and you're forcing us to integrate with China." And all of the business people say, "That's nonsense. We understand that the Chinese market is closing to European businesses slowly but surely. There's no way around that. We're going to try to make as much money out of it as we can. We understand that we now have less leverage to negotiate with China. We might have to give up some sanctions and let more Chinese products into our markets, which are going to be bad for us. But we don't really have another option. We can't strategically shift to an alliance with China because, again, they understand the nature of the Chinese Communist Party, the character of it, which is to make China into a self-sufficient economic juggernaut that is predatory, that is economically aggressive, not economically cooperative." And the real people who are in charge of the real businesses in Europe know that.

So that's not great. Their best bet is to hedge and to wait and hope that this is just a blip and that some less nationalist, protectionist people come into power in Washington in two years or four years. And I don't think that's a bad strategy. Why would you shift everything about your economy if you don't know whether or not Trump's plans are going to last for next week, much less for 2029? And then when it comes to the Global South, I think that we've mostly already lost them in the economic competition to China. The rate at which China's economic outreach, trade outreach, manufacturing investment, and development investment in most places in Africa and South Asia is so far ahead of what we're doing and so much smarter and more effective than what we're doing that I think we're basically losing those continents in terms of economic influence.

But one bit of good news is that anyone who tells you that the RMB is going to become the reserve currency, I think, is horribly mistaken because it's not a real currency, it's not a real economy. All the numbers coming out of China are suspect, and the ability to trade the RMB in the international market just seems like a bizarre idea considering that it's an economy based on a lot of fictions, which gets us into whether or not these Chinese companies should be traded on our capital markets. But maybe we're going to need a whole another podcast for that one.