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A House Divided? American Foreign Policy After the Midterms — Transcript

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1:56got a hand. What an extraordinary
1:58pleasure to walk onto the stage of
2:00Chicago Council and see so many
2:02tremendously wonderful friends um
2:05leading scholars in the audience um from
2:08across the country um as well as on the
2:12stage members of our board of directors
2:14Alan Rush um it is it's really a
2:18phenomenal moment in America and across
2:20the world regardless of your political
2:23position you cannot deny that we are in
2:26some sort a moment of change and flux
2:29and we're here to just begin to try and
2:31make sense of that. Um I'm Leslie Vmori.
2:34You know me by now. I'm uh the
2:36relatively new not so new president and
2:38CEO of the Chicago Council since July
2:401st, 2025. Um and tonight um tonight's
2:44program uh House Divided America
2:47American foreign policy after the
2:49midterms. The topic is pretty clear um
2:51even if the answer isn't. But I did want
2:53to take a moment just to say that the um
2:55that this is part of a larger project um
2:58that is uh co-convened co-led by the
3:01Council on Foreign Relations, the
3:03Chicago Council, Princeton University,
3:06and also Georgetown University. So,
3:08we've been convening um across
3:11geographies on some of the biggest
3:12questions on mapping the future,
3:15thinking not only about where America's
3:17heading, what the long-term trend lines
3:19are um globally and how they will play
3:22out for the US. And it is a at least a
3:24couple of year project through until
3:262029. And it's one of the reasons that
3:28so many tremendous people, all of you
3:30are here um and some of you for the
3:32project that we are having a workshop
3:34tomorrow um to take forward. Let me say
3:37just a brief word about um our
3:40panelists. You'll know them and their
3:43writing and their work and their thought
3:45leadership and their speaking very very
3:47well. Um Professor John Iikenberry um is
3:50the Albert Milbank Professor of Politics
3:52and International Affairs at Princeton
3:54University. His books are numerous. A
3:57world safe for democracy is one of my
3:59favorites. I love the title. I love the
4:01book. um liberal leviathon, but if
4:03you've read um liberal international
4:04relations theory, you will know John and
4:07um his scholarship and he's um I think
4:09it's safe to say set the standard for
4:12liberal international relations thinking
4:13across the world. Um and and stayed true
4:16to it even during some pretty dark times
4:18for liberal international relations
4:20theory. Um Charlie Cupchin, Charles
4:23Cupchin, uh author of a very new book,
4:25um many books, but a new book that you
4:27can um buy at the end of the evening. um
4:31bringing order to anarchy governing the
4:33world to come. It always remind I don't
4:35know if you intended to be this sort of
4:37a follow on from Headley Bull
4:39>> anarchical society but for me I always
4:42think of that and also because you got
4:43your doctorate way back when at Oxford
4:45University. Charlie is a professor of
4:47international relations at Georgetown
4:50University School of Foreign Service. Um
4:52he is a leading uh senior fellow at the
4:54Council on Foreign Relations where he's
4:56been for many years. Um, and safe to
4:59say, I think, not a liberal
5:00international relations theorist.
5:03>> We'll find out.
5:05>> Read the book.
5:06>> We'll get him there. Um
5:08uh and um Shannon O'Neal, senior vice
5:12president of studies, which is a huge
5:14role at the Council on Foreign
5:17Relations, has joined us um from her
5:19perch in New York City as a leading
5:21scholar of Latin America, international
5:23trade, regionalism, uh wrote uh recently
5:27the globalization myth, why regions
5:30matter. um and has been already a great
5:33friend to Chicago and rumor has it grew
5:35up partly in the Midwest. Um Adam Posen,
5:39president of the Peterson Institute for
5:41International Economics, your work um
5:43your writing, your prolific commentator,
5:46writer, very serious thinker um and uh
5:49with unparalleled knowledge of the
5:51international economy. So, this is a
5:53tremendous panel to answer the questions
5:56that are basically unanswerable just
5:58days after the US midterm elections that
6:01are not yet concluded. As we know, we're
6:03still waiting for the final results of
6:05the Senate in Mississippi and Alaska.
6:07Um, I did say to colleagues um in the
6:10green room that across Europe, not
6:13everybody, but many people have been
6:14saying for at least two years now um
6:17America's gone. Forget about America. um
6:20we have to take care of ourselves. The
6:22old America and the old alliance is not
6:25coming back. And yet glued to the TV,
6:28they're all over the news. And they
6:30really truly believe that the midterm
6:32elections and the results matter. So
6:33there's a there's a little bit of a
6:35contradiction there. And I I say that
6:36with all due respect, not only to
6:38Europeans, but to people around the
6:40world who on the one hand hold the view
6:42that America is now much more
6:44self-centered, much more domestically
6:46focused, much more transactional. that's
6:48in its foreign policy but still
6:51fundamentally believe that who we choose
6:53to lead the country um and even just the
6:55congress right obviously not a
6:57presidential election will have a very
6:59significant impact on them and on the
7:01rest of the world so I think it's a very
7:03open question and an appropriate one for
7:05the panel so let me just start by asking
7:07you first both the same question and
7:09then maybe we'll ask a few different
7:11questions and I'll start with you and go
7:13down the line um Adam what can the
7:17midterms change
7:19>> a lot but not everything. So Shannon,
7:21I'll pick up on where you started. I
7:24think in terms of international
7:26economics,
7:28the fundamentals of what I've called the
7:31new economic geography that the US is
7:35not as reliable as it once was in terms
7:37of providing various forms of insurance
7:40to the world at large and the economy is
7:43a reality. And anybody with real money
7:47on the table as investment, meaning
7:49running a business or portfolio, any
7:51foreign policy maker, I'm just back from
7:54Ottawa literally yesterday,
7:56um has to self-insure, has to diversify,
8:01has to go think ahead to even if the US
8:05has gotten through its worst period, you
8:10the fact that our constitution didn't
8:12prevent that, the fact that our popular
8:15opinion didn't prevent it. The fact that
8:17our alliances didn't prevent it must
8:20mean that there's a certain amount of
8:21caution. Now, nothing is forever. We all
8:24know what happened with Japan and
8:26Germany after the war. We all know what
8:28happened between Vietnam and the US in
8:30recent years. Building of trust and
8:32reconciliation is possible. But I just
8:35want to emphasize that that whole
8:38lasting stream of uncertainty
8:41extends I'm sure my colleagues will talk
8:43about some of this in in the security
8:44sphere and the foreign relations sphere
8:46but it extends into the economic sphere.
8:48>> Right. On the more practical bottom
8:50line, um I do think that the Democratic
8:55leadership and the people who ran in
8:57this election did hear the message from
9:02the populace on everything, but
9:04particularly in economics, we hate
9:06inflation.
9:09We are not eager to pay huge amounts of
9:12money for foreign policy adventures that
9:16we don't even want in the first place.
9:19and we care about what works. We're not
9:21ideological about it. And so what that
9:24means is I am hopeful that tariffs and
9:27some of the anti-migrant behavior
9:30um is and some of the foreign policy
9:33behavior is reigned in because it
9:36clearly doesn't work. It clearly fails
9:39in the way that economists, mainstream
9:42economists predicted. And I'm happy to
9:44go into more detail, but I mean it is a
9:46fair summary. Tariffs have failed to
9:49deliver increases in manufacturing
9:51employment, have failed to deliver
9:53increases in national security, have
9:54failed to promote people's pocketbook.
9:58So what in the next two years the final
10:01thing I'll say is I do expect some
10:04changes on the trade front. I think at a
10:06minimum we are going to see some
10:09overtures from Congress to really reduce
10:15the uh tariffs and potentially get rid
10:17of them visav Canada. Um because you'll
10:20be able with this big a Senate majority
10:23to get some Republican senators who now
10:26also will feel like they can
10:27differentiate themselves from Trump to
10:30come together and say especially those
10:32newly elected in Maine, Michigan, Ohio,
10:36Alaska
10:37of whatever stripe and say this isn't
10:41working for the auto workers in my
10:42district. This isn't working for the
10:44consumers in my district. In addition to
10:45all the values and security reasons,
10:47it's stupid to confront Canada. And I so
10:50I could see that bill happening. At the
10:53same time,
10:55I think that a big change will be there
10:58will be a lot of legislation and
10:59hearings to be more confrontational with
11:02China because President Trump, as my
11:05colleagues can talk about in more
11:07detail,
11:08is rightly perceived as soft on China.
11:11Now whether that's good or bad, but he
11:14is definitely softer on China
11:17>> than either congressional party.
11:20>> And so again, same dynamic. You can have
11:22a few Republican senators, a Republican,
11:25a Democratic majority in the Senate,
11:27large numbers of House members in both
11:30parties who want to put on more human
11:32rights bills, more export restrictions,
11:34more investment barriers, more
11:37confrontation with China. And ultimately
11:40it matters whether the president vetos
11:42these bills or not but they're not going
11:44to be purely symbolic.
11:46And so the point is it's interesting and
11:49it remains in a sense transactional.
11:52This isn't some gazump concept of the
11:55sort that Charlie or John or Shannon
11:58might want to impose
12:00because on the one hand you're saying
12:02let's re pragmatically
12:05increase integration with Canada the way
12:08it once was and at the same time I think
12:10Congress is going to say idealistically
12:14let's further decrease integration with
12:16China.
12:18>> Thank you. Okay. So you started out
12:20saying caution maybe not a lot will
12:21change be wary but actually there is a
12:24lot in there that that is up for
12:26>> watching. Um Shannon on this first
12:29question what do you think the midterms
12:30can change?
12:31>> Yeah well let me build on that. I mean
12:33on the one side there's going to be a
12:34lot of continuity right. Trump during
12:36his first two years when he controlled
12:37both houses of Congress he pretty much
12:39ignored Congress. So I don't expect him
12:41to spend a lot of time working with
12:43Congress despite what he said the other
12:44day. Um
12:47I do think though there I mean the other
12:49thing I would say is you know Congress
12:50has the power to perhaps deter some
12:54things but it doesn't have the power to
12:55force the president to do things right
12:56the congress can't force the president
12:58to you know deliver arms to Ukraine
13:01right but but there's some ways they can
13:02deter some things but I think there's a
13:04couple areas and one I will say is what
13:05we learned in the in the you know
13:07midterms was Americans think tariffs are
13:12unpopular right they don't like tariffs
13:14so so the things that Adam is talking
13:15about is one I also think as other
13:17countries are looking at the Trump
13:18administration negotiating with USR they
13:21may see you know the runway shortening a
13:24bit here so there's two more years of
13:26this it's not necessarily either whether
13:27there's a Republican or a Democrat that
13:29follows Trump you know are they really
13:31going to keep this regime do we want to
13:32sign on to an agreement on reciprocal
13:34trade do we want to sign these
13:35agreements that lock in changes in our
13:37legislation in our country when this may
13:40disappear because Americans have told us
13:43that we don't they don't like tariffs so
13:44I think you back to like what the
13:46populace wants. It's clear they don't
13:48want tariffs and so why would you sign
13:49on to sort of support these tariff
13:51regimes? I think that's one thing that
13:52you could see some change. Um, another
13:55thing I think you may see a change in
13:56foreign policy is part of the foreign
13:57policy, especially on the commercial
13:59side of this administration so far, has
14:01been um, led by the private sector and
14:05private companies, right? There's a lot
14:06of deals that have been done in other
14:08countries. And I think as we get a, you
14:10know, democratic both house and senate,
14:12we get a bit more oversight and asking
14:14for accountability, we may see private
14:16sector companies, particularly public
14:17companies, a little more reluctant to
14:19sign on to some of these efforts as they
14:21go abroad, be part of that, knowing that
14:23they will be called potentially up to,
14:25you know, explain the deals that they've
14:27done and and and like. So I think we may
14:29see a little bit of a pullback there.
14:30Um, and I would say we're going to see
14:32in terms of sort of continuity, but
14:34change. Um, often in the last couple of
14:37years of a presidency, especially kind
14:38of a a lame duck presidency, we're not
14:40going to see re-election, you both see a
14:42more active president abroad, but you
14:45also start seeing the B and C team in
14:47terms of the cabinet members and the
14:50deputy secretaries of state and what
14:52have you um implementing that, right?
14:54So, we've already seen there were a
14:56couple like one woman who left today
14:57from the Justice Department. There's
14:59rumors out there that Marco Rubio is is
15:01looking for the exits. Um whether that's
15:03true or not, I think you will start to
15:05see just a change in the personnel as we
15:08go forward. Um which also changes
15:10foreign policy. A lot of it is led by
15:11people. And so I will say, you know, if
15:13Rubio decides to leave, some of the
15:15focus on the Western Hemisphere may
15:16change. Um some of the other areas
15:18around the world where he has been
15:19really active, you would see a different
15:20with a different secretary of state.
15:22Same or and same if you see there's also
15:24today talk about Hegath leaving. um that
15:26will really matter for foreign policy.
15:29>> Charlie, what are the midterms going to
15:32how much can they change? What will they
15:34change? What what do you anticipate?
15:37>> Well, let me start with the the upbeat
15:39comment and then offer two caveats.
15:43Uh the upbeat observations are number
15:45one that we just had a free and fair
15:49election
15:50and that should not be taken lightly
15:53because I I think that many of us I I
15:57thought we would but many of my
15:58colleagues did not and if you look what
16:01happened in Poland and Hungary and
16:04Serbia and Turkey and lots of other
16:06places once you get strong men in power
16:09legally
16:11elected democrat radically they start to
16:14corrupt the system and and at least for
16:17now we've dodged that bullet. And the
16:20other observation which is I think
16:24encouraging
16:25is that
16:27democracy functions as it's supposed to.
16:30The president screwed up and he was held
16:33accountable by the American people.
16:36Right? And so I think we can breathe a
16:37sigh of relief that the system is
16:41intact. the system is working. The the
16:44two caveats are that I'm less sanguin
16:49than Shannon and Adam that we're going
16:52to see number one any real check on
16:56Trump from Congress. I think Trump
16:58thinks that the legislative branch is a
17:01nuisance. He he ignores it. Every time
17:05anybody tries to put a constraint on
17:08him, whether it's Congress or the court,
17:10he finds some way to bob and weave
17:13around it, he says to the courts, "You
17:16don't like this authority to use uh to
17:19impose tariffs. I'm going to use that
17:21authority." And they say, "No, that's
17:23illegal, too." And he says, "Fine, I'll
17:25use that authority." And so given that,
17:28you know, you still have a filibuster in
17:30the Senate, you don't have veto proof
17:32margins in either house,
17:35I'm I think this is going to be
17:37confrontational
17:39and that the checking capabilities of a
17:43Democratic Congress are quite limited.
17:45Uh final uh observation, it's possible
17:49that Trump will moderate. It's possible
17:52that Trump will say tariffs didn't work.
17:55I need to change. But I also think that,
18:00you know, Trump is he's he's got very
18:03thin skin. He has just received a huge
18:09rebuke and rejection. A vulnerable Trump
18:12is a dangerous Trump. And I could see
18:16him saying, "I'm going to show these
18:19folks. I'm going to double down. It's
18:22time for America First on steroids. And
18:26so I I don't know which way it goes, but
18:28I really do think it could go either
18:30way. And I think he's going to be
18:31obsessed with legacy. What can I do now
18:36to go down in history as a great
18:38president? And I think, you know, if I
18:41were if I were to say what what what are
18:43the two things that I keep an eye on?
18:44One is Iran. He may say, I'm going to go
18:47finish the job. I I actually don't think
18:50he will because the Iran war has in some
18:53ways jeopardized his presidency. And I'm
18:56guessing he's going to try to get out of
18:59it and not go back to full-scale war,
19:03which leaves the second
19:06item on the list, Cuba. If I lived in
19:11Cuba, I would be looking for a deep
19:13basement.
19:16>> Okay. I mean, yeah.
19:19Um, lots to say there. Um, I'll make one
19:22comment and I want to to turn to John.
19:25And I guess, you know, it's entirely
19:27possible that we see something very
19:29different, isn't it? It's entirely
19:30possible that legacy and strength in the
19:33Democratic party is attractive to
19:36President Trump and he and he chooses to
19:38work differently than we we keep
19:39thinking that we understand and can
19:41anticipate what he'll do. And um, we we
19:44might be wholly wrong. I I imagine we
19:46could see a lot of things that we don't
19:48expect um in the in the months ahead and
19:51in the days ahead. John, I want to kind
19:53of pivot because you've got a long-term
19:55perspective on the US, on the liberal
19:58international order, which I think many
20:01people have declared the end of multiple
20:03times. Um 2008, 2016, 2020, 2022,
20:09um 2020. I mean, you know better than
20:11anyone.
20:12Do you I mean if you if you'd like to
20:14also incorporate an answer to the what
20:16can the midterms actually change but
20:18since you really do think strategically
20:20about liberalism do you believe that the
20:23US can rebuild the the liberal order and
20:28international order that it can sort of
20:31forge international leadership and do
20:33you think it can happen now or is this
20:35something that really is only after the
20:38next presidential election where it's
20:40sort of on the table again?
20:41>> A great question. And uh I I I'm
20:44speculating like the rest of you, but
20:46couple points. First, uh echoing what
20:48Charlie said, I do think uh that uh that
20:52we've had a kind of Benjamin Franklin
20:55moment, you know, question it's a
20:57republic if you can keep it and in some
20:59ways we've passed that test that we
21:01haven't had the violence or the the
21:04uprooting of the election. So in that
21:06sense uh the American project continues
21:10and uh that that is of great global
21:13significance. I think that's that's true
21:15uh both in terms of passing the test uh
21:18institutionally
21:20uh the constitution holds uh uh and uh
21:23in some sense uh uh the uh ability of of
21:27of the public to register their views. I
21:31mean there was a a real sense that uh
21:33that there is kind of laws of gravity
21:34for politics and that positions that a
21:37government takes that that are not uh uh
21:40congruent with the interests of of
21:42citizenry uh get registered. So uh there
21:45is a kind of return to reality aspect to
21:47this. So I think uh that is is kind of
21:50my most positive reading. Uh secondly, I
21:55do think there has been it's it's a very
21:59important election. And I think it has
22:00been a a referendum on on two different
22:03visions of of America. A kind of
22:06Trumpian uh vision uh of a kind of uh
22:11America as a as a limited project, white
22:15national uh uh heritage America as uh as
22:20the vice president has called it. And
22:21the other the other vision of America I
22:24I associated with with uh with Obama
22:27kind of bigger tent multicultural mult
22:30multi-racial what what you might call a
22:32credle America and it seems that second
22:35uh vision of America has uh um found new
22:40voice and a kind of uh the election
22:42gives it a certain dominance to it. So
22:45uh a third point uh I think it is a kind
22:47of critical uh moment uh when uh there
22:51is a uh real uh uh possibility for uh
22:55turning the page uh probably not in the
22:58next two years but in the larger sense I
23:00do think that that uh uh the uh
23:04possibility of of of a a different uh
23:08organizing coalition moving forward uh
23:11on issues that seem to have been uh
23:14adjudicate ated in the in the in the
23:16election. Uh tariffs uh cost of living,
23:21the war in Iran, uh um the ICE uh uh uh
23:26approach to uh uh to uh to uh immigrant
23:30uh uh enforcement. These are things
23:32where it seems to me that there has been
23:34uh a rejection of them. The election has
23:38been more about domestic politics
23:41perhaps than than international
23:43politics. But there is, I think, an
23:45opening in all these different ways for
23:47uh for uh the uh the opposition for the
23:53honorable opposition to begin to gather
23:56their forces. So I do think that there
23:58is a real opportunity here to uh put
24:00forward a different uh vision. um what
24:04will happen with the new uh uh leaders
24:07who are brought to to to Congress, the
24:09new senators who uh who will be uh
24:13brought to Washington. They they are a
24:15new generation of Democrats who will uh
24:18decide how to carry on their own uh uh
24:21democratic foreign policy. So I think
24:23there's there will be a lot of
24:24interesting uh voices to listen to
24:26there. Uh but it does seem to me that in
24:30the next pivot of history, the United
24:33States will have an opportunity at least
24:35to re embrace alliances, rembbrace free
24:40trade, rembbrace, uh immigrant America,
24:44uh the United Nations, cooperation with
24:46allies, uh and global problem solving.
24:49So I do think to answer your question uh
24:51Leslie I do think that there is another
24:54moment that will arrive uh whether the
24:56voices will be there but uh there is a
24:59certain kind of moment of opportunity
25:01now to to to think big uh because one of
25:05the two great uh visions of the of the
25:08United States has I think been pushed
25:10back on its heels and so there is real
25:12opportunity for for the the uh other
25:15other side the other position to to come
25:17forward. Thank you for that. I mean,
25:19there have been many people, everybody
25:21on the stage, I think it's safe to say,
25:22and and many others who have spoken here
25:24and around the world who agree that
25:26we're in a moment of disruption and
25:28there is an opportunity that will emerge
25:30from that to rebuild and refashion. And
25:33then the question is what which kind of
25:35international order? And Adam, I want to
25:37come to you because when John was
25:38talking, one of the things that he
25:40implied is that maybe question mark that
25:43there's some there's some there's an
25:44economic strategy that would be
25:46presumably central to that vision if it
25:48if it were to be a liberal uh vision.
25:51Can America afford it anymore? Can you
25:53imagine a a new or reformed or a
25:56different kind of international order
25:57that has a degree of free trade or
26:00something that presents a good
26:03opportunity to America's allies and the
26:05rest of the world to kind of be part of
26:06it that's that's actually affordable
26:08because remember the election you know
26:10it seems to be the 2024 and 2026 very
26:13different kinds of elections but people
26:14kept saying it's not working for me it's
26:16not working for me I can't pay my bills
26:19this is too hard deliver so is there a
26:22liberal vision that can that can
26:24deliver?
26:25>> I believe so. Uh whether we can get
26:27there politically in the next two to
26:29four years to me is the question. But on
26:32the numbers and on the underlying
26:33economics and security, it is
26:35achievable, Leslie. And I just want to
26:38stress one thing to start. It isn't just
26:40about tariffs. I mean it it is about
26:44migration policy. It is about open
26:46navigation of the seas. It is about
26:48letting people invest in dollar
26:50denominated assets. It is about
26:53providing rule of law and adjudication.
26:55It is about international economic
26:57standards. So there is a set of things
27:00that go with John's liberal
27:02internationalism but also fundamentally
27:05go with better economic performance.
27:08And while people are very angry
27:13and you don't want to do what Vice
27:15President Vance did which or President
27:17Trump for that matter and dismiss their
27:20feelings of economic dislocation, it is
27:24important to understand that it's not
27:28globalization's fault.
27:32It's largely several other things we do
27:36and then technology
27:39and that's why perhaps ironically there
27:42is an affordable path. So the first most
27:45important thing is stop wasting five to
27:50thing is stop wasting 5 to 8% of GDP
27:55every year on the world's worst health
27:58care system in terms of bang forbuck
28:00if we we spend 18 plus% of GDP on health
28:04care no other country no other advanced
28:08in highincome country let alone I think
28:10any country spends more than 11 or 12%
28:13most do as well as us on 9 or 10% of
28:16GDP.
28:18If we free up those resources,
28:22we have a better healthy populace. We
28:24have a better economy. And you don't
28:27have to convert that all into taxes. You
28:29convert say a quarter to a third of it
28:32on into taxes because you put it into
28:35taxable more productive use.
28:38That takes care of most of the deficit
28:40problem. So I mean this this doesn't go
28:44to my advantage because I know nothing
28:46about healthcare except as a consumer.
28:49But as a macroeconomist, you know, you
28:51always hear this term structural reform.
28:53The US ran around, the IMF went around,
28:55the World Bank runs around, the OECD,
28:57you need to do structural reform. Italy,
28:59you need to change your labor markets.
29:00Mexico, you need to change your energy
29:02markets. If the US would just fix its
29:06healthc care, everything else becomes
29:09infinitely more affordable.
29:11migration.
29:14We have a lot of work on this on our
29:16website at pie.com. Go team. Um,
29:22this is again a win. You can argue
29:25politically about border control
29:27particularly with respect to surges and
29:29what it effects on individual
29:30communities on sovereignty in the sense
29:33of do you control the flow or not. But
29:36it is absolutely no question that if the
29:38US were to become a magnet for migrants
29:41again, it helps our budget, it helps our
29:44defense, it helps our productivity. And
29:47this is all very demonstrable. And the
29:50US is in the position of being able to
29:52attract and utilize both high-end
29:55high-skll migrants and lower income
29:58people from, say, El Salvador who do
30:01housing construction and make to put
30:03them both to work.
30:05So, I can go on and on, but the the
30:08fiscal problems are real and now they're
30:10at the point where they are affecting
30:13people's pocketbooks because our fiscal
30:15problems are bad enough that they're
30:17raising interest rates which raises
30:19costs for everyone who borrows something
30:21which slows the economy. But between a
30:25better migration policy and a better
30:28health care policy consistent with
30:30reasonable values, suddenly you're
30:32talking 6% of GDP that goes to better
30:36usage, which means 2% of GDP to 3% of
30:40GDP a year that goes to reducing the
30:43deficit and we're in a whole new ball
30:44game.
30:45>> That was excellent. Just one comment,
30:47maybe we can come back to it. Um people
30:49don't feel things in the aggregate. They
30:51feel them personally and everything is
30:54distributional. Absolutely. You know
30:56migration you can make the aggregate
30:58case but people are going to still look
30:59to see whether their job is going to
31:01somebody else.
31:02>> It's not distributional. It's
31:04individual.
31:05>> Individual.
31:05>> I think those two get confused.
31:07>> But the distributional policy policy I'm
31:10going to push back. Sorry Leslie.
31:12Because distributional
31:13>> this is why you're here. Distributional
31:17implies people have an opinion about the
31:19distribution which I accept the first
31:21part of your premise. They have an
31:23opinion about their family, their
31:26household, their community, their
31:28immediate local.
31:30And so inequality for all we talk about
31:32and we may not like it
31:35actually is not a predictor in the data
31:40>> of how people vote.
31:42>> Okay? It is not a predictor in the data
31:45of what they call for. If you look at
31:47top issues, when there are these
31:48open-ended poll questions as Chicago
31:50Council on Global Affairs looks at, um,
31:53or when you specially drill down on
31:55international and economic issues,
31:57people, very few people care about
31:59inequality per se. It's like tariffs.
32:01They don't care about tariffs or trade
32:03or openness per se. They care about how
32:05it affects them. So there, I agree with
32:07you. So like inequality people care if
32:10there are trillionaires who are
32:11destroying the democratic process though
32:13I agree with Charlie it's wonderful they
32:15didn't this time but you know so they
32:18care about wealth inequality maybe
32:20because it distorts our elections but
32:22that's not because they care about
32:23inequality they care about it distorting
32:26our elections and making us
32:28>> this is a profoundly important point and
32:30I mean this very seriously I do think we
32:32actually need an entire panel on this
32:34because it's of profound importance to
32:36come So, let's do that and let's do it
32:38as a partnership. That's a great idea.
32:40Shannon, um the the national security
32:42strategy, Trump's national security
32:44strategy talks about preeminence,
32:47dominance in the Western Hemisphere. A
32:49lot of people in the first year or so
32:51were talking, including at John
32:53Iikenberry's famous seminars at
32:54Princeton were talking about, you know,
32:56would we move away from a liberal
32:58international order into a world that's
33:00about spheres of influence? As you look
33:03at President Trump, his policies in
33:06Latin America, do you see this, you
33:09know, now that we're sort of maybe
33:10turning a corner? We're certainly
33:11turning a corner. We don't know what's
33:12around it, but do you see this focus on
33:15the Western Hemisphere um diminishing?
33:17Do you do you kind of buy this argument
33:19about spheres of influence being the way
33:22of the future regardless? or are you on,
33:24you know, the side of some of the
33:25arguments that we've just heard that
33:27there is a real prospect for a return to
33:30some kind of viable liberal order that
33:32brings people in and brings them along?
33:36>> I mean, I would say, you know, president
33:38after president talks about the Western
33:39Hemisphere and how it's the most
33:40important region, right? You can George
33:42Bush did this and then got sort of, you
33:43know, taken away with 911. Obama and
33:46Biden both at, you know, the beginning
33:47said this is important and then they
33:48sort of got distracted or went to other
33:50parts of the world. Trump came in the
33:52national security strategy le with the
33:53western hemisphere and I would actually
33:55say two years in he's still really
33:56focused on the western hemisphere like
33:58you have seen concentrated focus right
34:01the United States is effectively running
34:03the country of Venezuela right now it is
34:05decisions on legislation is making
34:07decisions on business deals it is
34:08deciding when to give money back to the
34:10government of Venezuela to spend on
34:12public works like and the money is in
34:14some account maybe in Qatar we don't
34:16actually know where it is the US
34:17Congress hopefully will find that out
34:18maybe next year um so you know activism
34:21in the western hemisphere there. You
34:22know, to to Charlie's point, there is a
34:25lot of policy around Cuba right now
34:26coming out of the US government, right?
34:29We have an increasingly strong, you
34:31know, blockade around the the uh
34:34country. Um there's a whole set of sort
34:35of second sanctions have been put in
34:37place and the US and US companies have
34:40replaced Venezuelan and Mexican
34:43government transfers of fuel in Cuba.
34:45it's really US companies that are now
34:47providing fuel and all kinds of other
34:48goods into Cuba today um in a way that
34:51we weren't um just say at the beginning
34:53of this year. So I think there's a lot
34:54of activity there. Um we're also seeing
34:57you know we you look at sort of you know
34:59trade policy you know around um the
35:01world you know we have the Trump
35:02administration has signed 10 kind of
35:04reciprocal agreements on trade and four
35:06of them are in the western hemisphere
35:08and you know James Greer spends a lot of
35:09time in Mexico City hasn't figured it
35:11out yet with either Canada or Mexico but
35:13there's a lot of focus so you see a lot
35:14of focus on the kind of commercial side
35:16on the western hemisphere um security
35:19right it's not as as sort of acute as
35:21what's going on in in the Middle East
35:23but um you are seeing You're continuing
35:25to see boat strikes in both the Atlantic
35:27Pacific uh oceans in terms of looking
35:30for or going after boats that are
35:32alleged drug dealers. You are also
35:34seeing have seen training of US troops
35:36and and it seems also that contractors
35:38um to do inland occurs in various
35:41countries down there whether they're
35:42facilitating you know Ecuadorian or
35:44Colombian or other troops or perhaps
35:45participating some of this is a little
35:47unclear what they're doing but there is
35:48a there is a military presence in the US
35:51in hemisphere in a way that you haven't
35:52seen for for many years and then finally
35:55say look this last year you have seen a
35:57US government that has been uh actively
36:00voicing its opinions about elections
36:01throughout the hemisphere right They had
36:03opinions about Peru. They had opinions
36:05about Colombia. They had opinions about
36:07uh Brazil which just happened in in
36:09recent weeks. Um and are working with
36:11the governments that they're aligning
36:13with you know other you know they're
36:14working working less with. So I think
36:16there is an activism this this idea of
36:19you know spheres of influence or or
36:21leaning in. I think there is there has
36:23been for the last two years a pretty
36:25consistent focus on the western
36:27hemisphere. uh and in part there has
36:29also been an alignment with governments
36:32in the hemisphere the ideological
36:34positions of the Trump administration
36:35right we see a a whole host of kind of
36:37rightist populists in the hemisphere um
36:41the one caution I would say as we go
36:42forward and you know what's changed and
36:44what's continuity um is we may be at
36:47sort of peak cooperation between the
36:50Trump administration and some of these
36:51governments and in part you know you
36:52join Brazil um despite support for the
36:54the rightest candidate Fabio Bolsinaro
36:57Lula the now will have his fourth term.
36:59So the sort of leftist um incumbent
37:01president will continue and have another
37:03term. Um we've sort of seen a change.
37:05You won't see an alignment on you know
37:06the shield of the Americas or some
37:08policies with the Lula government going
37:10forward. Um many of the sort of
37:12populists right as president have been
37:13elected are underwater in terms of their
37:15own public opinion. They're getting the
37:17headwinds of the sort of economic
37:19headwinds from you know energy prices
37:21and the like that they're facing. Um
37:23they have their own security challenges.
37:24they were elected to, you know, bring
37:26safety, bring economic prosperity, um
37:29reduce inequality, these sorts of
37:30things. And so far, they're not being
37:32able to do that. And so, as their
37:34popularity fades, I think so too do some
37:36of the policies that the Trump
37:37administration has been promoting um in
37:40their in their countries. And I think
37:42the the question really for you know US
37:44foreign policy towards Latin America or
37:46the Western Hemisphere is as you see
37:49sort of um the popularity fall of these
37:52governments perhaps see governments come
37:53in anti-inccumbent which will not be
37:55kind of right as populist or sort of you
37:56know Trumping do you just see a change
37:58in government or do you see not just
38:01reject of those particular domestic
38:03leaders but do you see a d a rejection
38:05of the United States and so you know the
38:07the Trump administration the US closely
38:09tied to these governments and do kind of
38:11a return of anti-Americanism which has a
38:13long history in the region
38:15>> in Latin America, Europe and all over
38:17the world. Um um a very quick question.
38:20It's not a question, but just to make
38:22sure that you address it before we come
38:24to Charlie. How you haven't said the
38:25word China. I mean do you see this as
38:27you know Trump
38:29Trump's affinity for populists and his
38:32how much is but how much is China behind
38:34it? Because if China's behind it, if
38:36it's really about controlling the
38:38Western western hemisphere in the in the
38:39face of a threat from another dominant
38:41power, then it then we would anticipate
38:43that it would live long beyond this
38:46presidency.
38:48So, I'd say most many Latin American
38:51countries see China as sort of this
38:53double-edged sword. China has, you know,
38:56bought all of their commodities and
38:57their economies grow. China has been a
38:59huge investor in roads and rails and
39:01ports and other infrastructure that they
39:03desperately need in these in these
39:05countries. And you know as China has
39:08become you know bigger and bigger on the
39:10global stage like many other places in
39:11the world these are economies that have
39:13become you know less diversified less
39:16industrialized
39:17um sort of less prosperous in some ways
39:20right in terms of kind of overall the
39:21good jobs and middle classes and all of
39:23that and part of that is you know the
39:25sort of onslaught of you know cheap
39:27Chinese manufacturing that's coming to
39:28these places in places that had been for
39:30instance Mexico had been and is a kind
39:32of you know global advanced
39:34manufacturing powerhouse house, you
39:36know, building cars, building other
39:37things. And today, one in the cars sold
39:38in Mexico are Chinese imports, right?
39:40They're seeing sort of the undercutting
39:42of their, you know, ambitions to be, you
39:44know, diversified manufacturing
39:46economies just like just Europe, just
39:48like other places. So, so Latin America
39:50has a kind of complicated relationship
39:51with China and even though they're the
39:53biggest, they keep saying they're the
39:54biggest trading partners, but for
39:55Brazil, 80% of Brazil's exports go to
39:57China and there are five commodities.
39:58They're not things that provide good
40:00jobs and so things that export to the
40:02United States are higher valued goods.
40:04So that trade is is much more
40:05advantageous if you're trying to create
40:07kind of more robust economies. And so to
40:10me, I think there is in some places a
40:13bit of an open door for a closer
40:15relationship with the United States on
40:16on commercial side if we can figure out
40:19a a sort of a win-win or a partnership
40:21there rather than a um you know than a
40:23punitive way of of interacting with
40:25these economies because there is sort of
40:26a challenge from China. That said, right
40:28now China's the one showing up with
40:30money. China is the one that is buying
40:31the you know goods that they have to
40:33sell and it's very hard to to sort of
40:35you know to move away from that as you
40:37go forward. So I think as I look around
40:39the world if any part of the world might
40:41kind of dellink from from China or the
40:43United States if you're trying to find
40:44friends and allies at the moment that
40:46might delink um in the emerging markets
40:48at least I think Latin America be it I
40:50don't think Southeast Asia will I don't
40:51think other parts will but um but you
40:53have to offer them something you can't
40:55just tell them to do so we've also heard
40:57that comment before we had a great
40:58program in Africa where the the comment
41:00was made you got to offer something if
41:02you want to if you want to sort of be in
41:04the game um and China's offering
41:06something Charlie perfect opening for
41:07you when you look ahead, um how do you
41:12how do you imagine a world where, you
41:13know, if allies follow through on the
41:15ambition and also the push from the
41:17United States right now to become more
41:19independent, to diversify their
41:21partnerships, to build up their internal
41:23capabilities,
41:25if the US continues to, you know, be
41:27uncertain and and perhaps um
41:29transactional, if it doesn't, you know,
41:31do you think we're heading towards the
41:32possibility of this more liberal world
41:35where there's a positive offer? ing or
41:38do you see I mean I sort of partly know
41:40the answer but I want to hear it from
41:41you
41:43>> because we've been on a few panels
41:44recently but it is a phenomenally
41:46important book and it's a it's a
41:48contrast I think to the gentleman on
41:50your on your left your your viewpoint
41:52which is extraordinary given how good of
41:53friends you are.
41:56Uh, you know, I think that
42:00let me like back up a little bit because
42:05I don't
42:08um
42:10feel uh that I don't want the liberal
42:13order to to be rebuilt. Uh I just think
42:16we need to be
42:18wideeyed and sober about this what what
42:23moment we are living in. Uh, and I think
42:26that, you know, the the I I think
42:28there's a there's a of a a danger of
42:31over interpreting the midterms and if
42:34the Democrats win, then everything will
42:36be fine. America, you know, we're living
42:38through a period of deep political
42:40dysfunction across the liberal
42:42democracies.
42:45If it were just happening here, then we
42:47could say it's Trump. Get rid of Trump.
42:49Everything's fine. It's happening
42:52everywhere. Our middle classes and our
42:55political centers are hollowing out. And
42:58they're hollowing out for reasons that
43:00that Adam referred to. Bad policy,
43:04right, on and healthc care on fiscal
43:08affairs. Our debt is getting to a level
43:12that's unsustainable. We now pay more in
43:15interest than we do on the defense
43:18budget. We now pay more in interest on
43:20the debt than we do for all spending on
43:23K through 12 education.
43:25You can't you can't run a country that
43:27way. And again echoing what Adam said,
43:33everybody runs around blaming
43:35globalization and free trade for this
43:37problem. And it is a little bit
43:42of the explanatory variable. What's
43:45really driving the hollowing out of our
43:47political centers is technology. It's
43:49ones and zeros. Why have we gone from a
43:52country in which almost 50% of the
43:54workforce was in the manufacturing
43:56sector to one in which 8% are in the
43:58manufacturing? Because of ones and
44:00zeros. Because machines have taken away
44:02their jobs. And Democrats and
44:05Republicans alike, their answer to this
44:08is, well, we're just going to
44:09re-industrialize.
44:11And it's garbage,
44:14right? And so we we need to have like an
44:16honest conversation with our publics
44:18about what they're going to do in 2040
44:21to earn a living wage.
44:24I don't know how many of you have been
44:25in in LA recently. I was there a couple
44:28of weeks ago within a rental car and
44:31half the cars coming toward you have no
44:33driver because they're all Whimos,
44:36right? That means that Uber drivers and
44:39folks at an Amazon fulfillment center,
44:41all those people who move from the
44:43production line to the service sector,
44:45they're they're going to lose their jobs
44:46in the service sector. So, we have a a
44:49huge problem uh of figuring out just
44:52what are people going to do. We'll we'll
44:54figure it out, right? We figured out how
44:56to master the industrial age, but now
44:59we're at the beginning of this
45:01revolutionary technological shift, and
45:04we haven't even begun the task of
45:06figuring out how to manage it. And
45:08that's why um I'm concerned that that
45:12just the the fundamentals, the political
45:14fundamentals of restoring the liberal
45:18order aren't there right now. Uh the
45:21other the other comment I I'd make is
45:23that and this kind of I think it was
45:26Adam who was talking about um
45:29Trump and China. I think what Trump is
45:33doing with China is exactly what he
45:35should be doing. I think it's great that
45:38Trump is probably going to have a a
45:40trilateral summit with Putin and Xi when
45:43he goes to Shanzhan in about two weeks
45:46for an apex summit. We have to learn how
45:49to work across ideological and
45:52geopolitical dividing lines. We're now
45:54in a world in which the United States
45:56and its democratic allies are no longer
45:58a preponderant coalition.
46:01We will we will hold steady at maybe 23
46:0424% of GDP of global GDP. But our allies
46:09are starting to disappear.
46:11And who's coming up? China, India,
46:14Indonesia, large countries in the global
46:17south, all of them are playing the
46:19field. Many of them have much stronger
46:22economic relationships with China than
46:24we do. Twothirds of the world now trades
46:27more with China than with the United
46:28States. And I don't think actually
46:31Shannon that that Latin America can wean
46:34itself off of China. They're they're too
46:36deeply integrated already and more so in
46:40Africa and South and Southeast Asia. But
46:43that says to me that we're headed into a
46:45world in which even if we revive the
46:48liberal order,
46:50the the next world is going to be
46:51ideologically diverse, politically
46:54diverse, multi-order, and we need to
46:57learn how to work with autocracies and
47:00live with them comfortably. Charlie, I
47:02think many people look at that meeting
47:04that's likely coming um with uh Trump
47:08and Xi and Putin and they fear deeply
47:11that the principle of sovereignty is at
47:14risk in a meeting like that. And I know
47:16that you know that well, but I think
47:17it's important to just, you know,
47:19transactionalism working together for
47:21sure, but we do need basic principles,
47:24right, that underpin the order and have
47:27been violated by many countries
47:29including the United States, but
47:31nonetheless are um significant. So I
47:33think if you're Ukraine looking at that,
47:35it's it's not a it's not a it's not a
47:37good feeling.
47:38>> Is there a downside risk? Sure. Might he
47:41throw Taiwan and Ukraine under the bus?
47:45possibly, but I doubt it. But we need to
47:48break the ice. These are conversations
47:51that need to start happening now, and I
47:54give Trump credit for starting it.
47:57>> They might be harder after this midterm
47:58election. It's one thing to consider.
48:00Um, John Iikenberry, can you imagine a I
48:04mean, I want you to respond to Charlie,
48:06but I also want to give you a question
48:07that sort of a prompted in doing that.
48:10>> You're you're within a strike.
48:13Do can you imagine an alternative to the
48:16liberal international order along the
48:18lines of what Charlie's presenting
48:20that's desirable? And if you can't, how
48:23do you what's your prescription for how
48:26you know the West or the US and its
48:28allies get back there? I mean, one of
48:30the debates that I sat in
48:32>> that you were kind of central to was
48:34whether there should be a club that
48:37brings back the liberal international
48:38order, you know, a small group of of the
48:41US and Europeans and maybe the allies in
48:44in Asia or whether the very idea of a
48:48club is is the bigger part of the
48:50problem that there's got to be more of
48:51an open offer and you know that the US
48:54is kind of open. I mean, I I I don't
48:56disagree with Charlie in the sense that
48:57it's a more pluralistic world. Where I
49:00do disagree is that I would not put my
49:02chips on finding the next world order
49:04with a coalition of Putin, she and
49:07Trump. I mean, I I want off that planet.
49:10Uh so I do think I would want more uh
49:14middle powers, ideally democracies and
49:17big coalitions. I do think that there
49:20are a a deep set of principles uh we
49:23call them westfalian many people do that
49:26have wide uh subscription around the
49:29world uh uh but in the world that you're
49:33picturing a kind of more divided world
49:35and Charlie a world where you have more
49:37autocracies and dictatorships uh with
49:40power at your doorstep. It it seems to
49:43me that it behooves you to have your
49:46friends hold your friends as closely as
49:48possible. Integrate with them, work with
49:51them on alliances, on trade, on energy,
49:54technology, and uh and
49:58put your best efforts out there in a
50:00world that is transforming. And if I
50:02were to say what is the most uh dynamic
50:07coalition of states out there latent or
50:10real it would be the liberal democracies
50:12the old the new and the the the aspiring
50:15democracies they are well over uh the G7
50:20number which is about 50%. They're up
50:22they're in the 60s and uh they uh share
50:26a lot and they uh are uh I think uh the
50:30most uh userfriendly coalition in a in a
50:33world where there will be more
50:35coalitional kind of ordering and
50:37rulemaking. So if you think of across
50:40history you have had these great moments
50:42that we study uh after wars uh uh
50:46constitutional moments uh hegemonic
50:48moments. the future will be much more of
50:51a world of coalitional and competitive
50:53rulemaking.
50:55And so the US would do well to uh hold
51:00its friends close uh uh uh uh work
51:02together, concert your efforts and and
51:06it's it's there. It's extraordinary.
51:08There's there's interesting research on
51:11American elites looking at the American
51:13people who see the American people with
51:16less appetite for alliances and free
51:19trade and international engagement and
51:22and IOS and the United Nations. They're
51:24actually more favorable to those things.
51:26We called them liberal internationalism
51:29than elites think they are. Josh Kurtzer
51:32at Harvard has this wonderful uh it it's
51:34it's really quite dramatic. people in in
51:36the beltway. You're there, I'm not, but
51:38I I I love the beltway, but it's doesn't
51:41have a there's more of an appetite for
51:43internationalism in the United States
51:45and around the world and certainly in
51:47the G7 countries. uh uh and so my view
51:51is that and the the the the the midterm
51:55election did uh put uh on the block so
51:59to speak for vote an alternative to the
52:01liberal international order that Trump
52:03is there with his autocratic friends
52:06aspiring and those who are there in full
52:08force and that is not an appealing uh
52:12alternative a world of regions of blocks
52:16of of neoimperial spheres is uh it's
52:20possible, but it's not desirable and
52:22it's not inevitable. And it seems to me
52:24that uh a a a G7 G10 uh a coalition
52:30that's that has legacy institutions, a a
52:34muscle memory for cooperation and
52:37agreement, deep agreement on cooperative
52:39security, open trade, uh uh worry about
52:43the future that has solutions only if we
52:45work together on technology and AI. So I
52:49I actually think it's almost we can
52:51stumble into a better world on the other
52:53side of Trump. Now Charlie thinks that
52:56Trump is and others think that Trump is
52:59the kind of punctuation point on the end
53:01of a liberal era that started in 1945.
53:04I'm I'm of the view that Trump will be
53:07seen not as the end but as it's the
53:09interagnum. It's the whoops, we we tried
53:12something else and we found out it
53:14didn't work. And so one way or another,
53:17we will stumble back,
53:19stumble forward, and it will be
53:21stumbling because we are it we're
53:23dysfunctional. Our institutions are uh
53:27into finding something that looks
53:30roughly like a liberal international
53:32order, open, rule-based, and
53:34progressively oriented among countries
53:37that have higher ideals and social
53:40purposes than simply uh surviving in
53:43anarchy. it's there and it I think
53:45enlightened self-interest can get you
53:47there.
53:48>> Um I'm going to turn to the audience in
53:51just one minute. Um it does seem like I
53:53mean you make a very powerful case and
53:55I'm personally am compelled by it. I
53:56think it's a contest. I don't think that
53:58we know right and I think we're part of
54:00the story. Um but we certainly don't
54:03have you know you said 60
54:0660 countries are in 60% of GDP but we
54:11don't we certainly don't have the mult
54:12>> and that that's that's and more invested
54:15assets it's much even larger than that
54:18so yeah it is
54:19>> we don't have the institutions right now
54:21to bring that coalition together and
54:23this is part of the problem that's going
54:24to have to be addressed if move towards
54:26another order that that wants to be
54:28liberal that the old institutions don't
54:30really reflect
54:31um the people that one might want to
54:34have be part of that. I guess it's a
54:35question mark. Before I come to whoever
54:37is going to ask the first question, I do
54:39want to note I mean John said he likes
54:41the beltway, but the reality is I I
54:44don't know your history, Adam, but I
54:46Shannon and I had dinner last night. You
54:48grew up in Ohio.
54:49>> Charlie and I were in Wisconsin a few
54:51days ago. You grew up in Wisconsin and
54:54John, you've got Iowa roots. Well, I we
54:56have a family farm in Iowa, but I grew
54:57up in in Kansas and we have our first
54:59Democratic senator since FDR was in
55:02office.
55:02>> So, I do want to say like we're not just
55:04bringing people in from Washington and
55:06New York. I don't know where you grew
55:08up, but it's okay if you're the
55:09exception.
55:10>> I'm bad. I grew up in Boston.
55:12>> Okay. Well, one one exception. I grew up
55:14in Omaha. So, you know, whatever you're
55:17hearing, Princeton, CFRP, you know,
55:19there's a lot of real knowledge of of
55:22the middle of the United States of
55:24America on this panel and um and I know
55:27that because I'm I've spent a lot of
55:29time with all of you. So, it's it's it's
55:30baked in. I think
55:31>> people in East and West Coast cities are
55:33citizens, too, though.
55:35>> You guys are very welcome to the Chicago
55:37Council. We have a partnership coming.
55:39Okay, first question, please. Hands held
55:41high. I'm looking all across to um I'm
55:44going to come to Paul here first because
55:45I know we'll get a good China question.
55:47Paul colleague, non-resident fellow um
55:49who spent many years working on China
55:51Asia.
55:52>> Yeah, I I do have a China question. Adam
55:55suggested that the Democratic Congress
55:57might be more confrontational toward
55:59China. Uh that is likely in my view to
56:02be counterproductive and not enhance US
56:04national security. So my question to the
56:06panel is uh and I should mention I I'd
56:08be a little more comfortable with
56:10Charlie's account of Trump's approach to
56:12China if I was convinced that it was
56:14based on strategic thinking.
56:17But my question is is it possible that
56:19the Democratic Congress could be the
56:21agent for the alternative, a more
56:22pragmatic approach to China which tries
56:25to maximize cooperation, the empirical
56:28cooperation on things like AI uh while
56:31not abandoning the inevitable
56:32competition between the two sides.
56:35If if I can go first. Um
56:38>> I actually very much agree with Charlie
56:40and largely with you on this point. I I
56:42think this is the one area where Trump
56:46has largely pursued the right foreign
56:48policy certainly foreign economic policy
56:51and I think this is clear whether it's
56:54strategic or accidental. Um, but as a
56:58forecaster and I I it is very hard for
57:01me to see the current Congress and I
57:06both Republicans and Democrats being
57:09more constructive or positive or open
57:11with China. I hold a hope that
57:13specifically on AI safety
57:16they can be and then that leads into
57:19some of the natural developments that
57:21John was talking about maybe. But um
57:25anybody you want to talk about inside
57:26the beltway? I think one of the biggest
57:29divergences of the blob or inside the
57:32beltway or whatever you want to call it
57:33from most Americans is the Duke of
57:36hatred and fear of China is so extreme.
57:39The people in Congress, the people in
57:41the defense community, people in the
57:42intelligence community fear and are view
57:46themselves in huge strategic competition
57:49with China to a degree that's not
57:52outside. Now, some of them will tell you
57:53that's because I get intelligence
57:55briefings and you don't know how bad it
57:57is.
58:00That's doesn't deal with things that
58:02Shannon and Charlie talked about, which
58:04is you have to still take taking that as
58:06given. That doesn't mean the
58:07confrontational strategy is the right
58:09one. But if you've been to the committee
58:12that is all but in name, the I hate
58:14China committee, which is a bipartisan
58:17committee,
58:19um it's all aggressive. And so again,
58:23it's not just the Democrats. It is the
58:25majority of both parties in Congress.
58:28And I think Trump's weakening means
58:31maybe not veto proof, but it means that
58:33there will be a number of senators and
58:35and Congress people who will see it as
58:38this is a way I can differentiate myself
58:40from Trump for the next election and
58:43I'll go with it. I would just and I
58:45completely agree with with Adam that and
58:48I you know we both live in the beltway
58:51and if I said what I said 10 minutes ago
58:54I think I would have had my head chopped
58:56off and handed to me in in most settings
58:58in in Washington.
58:59>> Yep.
59:00>> And that's why I like what Trump is
59:02doing because he's kind of he's moving
59:04the goalposts.
59:06>> I I don't think it's strategic. I think
59:09it's an instinct and an impulse and it's
59:12gonna really
59:14it's going to fall on the shoulders of
59:16the next president to turn it into
59:18something meaningful. But e even though
59:21I and here is where I think I I differ
59:24from John. I would love to see the
59:25United States have a great relationship
59:27with Germany and a great relationship
59:30with Canada, but the most important
59:33relationship in the 21st century is
59:36USChina.
59:38Because if if we go into an irreparable
59:41rupture, whether it's AI or climate
59:45change or global health or nuclear
59:47proliferation or great power war, we're
59:51in trouble.
59:52>> Can I can I just jump on that? I I don't
59:54disagree, but it's not an eitheror. If
59:57you I I agree that the the the USChina
1:00:00relations are will are the defining
1:00:01issue of this century. And I I think the
1:00:06best way to have a constructive
1:00:07relationship is to have those who share
1:00:10interests and values uh uh uh the
1:00:13liberal democracies old, new and
1:00:15aspiring to uh have a common voice in in
1:00:19talking to China. If you want to have a
1:00:21have a measured disciplined competition
1:00:23with China, uh you should uh align
1:00:26yourselves in a way that you can uh you
1:00:28can strategically interact with China.
1:00:31We don't disagree.
1:00:32>> So so so you can you can build
1:00:36>> you can you can do both. Uh so I I I I I
1:00:39think uh actually the China challenge
1:00:43reinforces the need to uh concert your
1:00:47relations with those that share your
1:00:49values and uh let's do it.
1:00:52>> Okay, there's a debate. We're going to
1:00:54take a couple of questions from this
1:00:55group because they've flown in and so
1:00:57they're required to participate. Um Ra,
1:01:00Jenny, and Suzanne. Um and please
1:01:02introduce yourselves and then we'll come
1:01:04back to the side. We're going to run a
1:01:05little bit over tonight. Uh, sure. So,
1:01:08could I pick up on that last question?
1:01:09My name is Sorry. Uh, I have to remember
1:01:12that myself first. I'm I'm Ron Mitt. I'm
1:01:15STE chair in US Asia relations at the
1:01:17Kennedy School at Harvard and a China
1:01:20specialist. So, um, the question No, no,
1:01:23no. But the question wanted to ask picks
1:01:25up, I think, on the actually very, uh,
1:01:27important conversation that that's
1:01:28developed here. Um the question I want
1:01:31to ask is how finance geo finance is
1:01:35going to work. One of the many areas in
1:01:38I talk to people who are working
1:01:39essentially in rising global south
1:01:41economies is that China has become much
1:01:44more central to the way that those um
1:01:47economies think of combining debt
1:01:49financing, venture capital, the
1:01:52implementation of uh technological
1:01:55infrastructure, 5G and so forth and now
1:01:58AI. I'm working about offering something
1:02:01that sort of combined package is what
1:02:03China can really come up with very
1:02:05effectively. Does pass this to John.
1:02:07Does the liberal world have a kind of
1:02:10coordinated as opposed to a vibes-based
1:02:12answer to that particular lunge from
1:02:14China?
1:02:15>> Wait, wait on that. Um Jennifer,
1:02:19please introduce yourself to us.
1:02:22>> Jennifer Lynch from Dartmouth. Uh thanks
1:02:24for a terrific panel. Um, so I'm going
1:02:27to ask about two of the worries after
1:02:28this election because, you know, I im
1:02:31immediately start looking for what I
1:02:33have to worry. Um the the first is
1:02:38it's sort of a be careful what you wish
1:02:39for scenario in that um it it is just
1:02:44going to be there's not going to be any
1:02:47progress made whatsoever because it's
1:02:49just all going to be about
1:02:50investigations and recriminations and
1:02:52indictments and and so part of me kind
1:02:56of wants that but the other hand I'm
1:02:58worried that it will interfere with the
1:03:01things we should be doing as a country.
1:03:03Um, and then the other question is the
1:03:06um the the Democrats are in charge and
1:03:10so they've been pretty shambolic. Is
1:03:13there any I mean are they just going to
1:03:15bicker about Gaza? We going back to like
1:03:19land statements. I mean like like are is
1:03:22there any energy that we can see? Is is
1:03:25there any vision that you guys see that
1:03:28that you can give me hope? uh just
1:03:30behind you Suzanne and please introduce
1:03:32yourself please.
1:03:33>> Uh thanks. I'm Suzanne Nosell from New
1:03:35York City but uh affiliated also here as
1:03:38a non-resident at the Chicago Council. I
1:03:41want to ask about kind of your with your
1:03:45different views, your overarching frame
1:03:48for this uh and particularly kind of for
1:03:50internationalism and in this election
1:03:52people were so you know the the
1:03:54international issues came in the Iran
1:03:57war via the price at the pump and Gaza I
1:04:01think as part of a kind of pitched
1:04:02ideological battle. But in terms of sort
1:04:04of the rationale for the American people
1:04:06for an internationalist approach,
1:04:08whether it's a liberal approach along
1:04:10the lines that John is advocating, my
1:04:12sense that that went for a long time on
1:04:15sort of the fumes of the cold war and
1:04:17when the Trump administration went after
1:04:18USAD and dismantled our human rights and
1:04:22development aid policies that really the
1:04:24American people didn't care because that
1:04:25rationale had almost run out and they
1:04:28didn't, you know, there was no popular
1:04:30push back. And so what does it look
1:04:33like? Do do we have to resurrect that?
1:04:35And and what does that rationale look
1:04:36like in the very practical terms that
1:04:38are motivating our voters? And if
1:04:41Charlie's world where, you know, we're
1:04:42sitting down with she and Putin, how do
1:04:45we explain to the American people, you
1:04:47know, what what exactly that's going to
1:04:49achieve for them kind of what we stand
1:04:51for uh and and why they should be
1:04:53invested in an internationalist America.
1:04:56>> I'm going to take a couple more and then
1:04:57we'll just have one last round of
1:04:58responses from over here. Um, please the
1:05:01gentleman here on the on the
1:05:05>> uh Keith Peterson, retired foreign
1:05:07service and an opinion comeess at a
1:05:09paper here in the Chicago area. Um, what
1:05:11are the chances that Democrats and
1:05:13Republicans will come together and pass
1:05:16a bill that renews support for Ukraine?
1:05:20Um, puts tougher sanctions on Russia and
1:05:23what would Trump do with it?
1:05:25>> Did you have a question? It looked like
1:05:28you did. Please Roger University of
1:05:31Chicago. I was just going to say that
1:05:32there were two major wars going on. One
1:05:34in Iran and one in in Ukraine that the
1:05:36United States and and we haven't heard
1:05:38anything about how you think the terms
1:05:39might affect the course of either if
1:05:40anybody has any such but that's his
1:05:42question. I Yes. Ukraine or Iran
1:05:45>> and maybe one from Alan before we close.
1:05:47No,
1:05:48>> I'm listening tonight.
1:05:50>> Okay, you're listening. Jonathan, last
1:05:51question from you. Jonathan Kushner.
1:05:54>> I have a Jonathan Kersner, Boston
1:05:56College. I have a painfully neat
1:05:58question for Adam uh who is not just a
1:06:00student of inflation but also a
1:06:02practitioner of monetary policy.
1:06:04If we can agree that infl the
1:06:08inflationary experience was an important
1:06:10part of the outcome of this election.
1:06:13I want to press you on whether or not
1:06:16the infla what people are calling
1:06:18inflation is actually inflation. that is
1:06:20the cost of living crisis that people
1:06:22are experiencing more of a microeconomic
1:06:25phenomenon than a macroeconomic
1:06:26phenomenon and therefore addressing it
1:06:28might be and harder than we'd like to
1:06:31think.
1:06:32>> So many great questions in there. Why
1:06:34don't we just go down the line? Adam,
1:06:36I'll let you go first. Choose the one.
1:06:38>> Yeah. I I I've got to try to respond to
1:06:42Jonathan who's been doing such great
1:06:44work and try to respond very briefly to
1:06:46Suzanne who's got the vision on the
1:06:49inflation question. I think what we've
1:06:51learned and there is decent but not
1:06:53conclusive evidence Jonathan that people
1:06:56care about price levels more than
1:07:01inflation
1:07:02and or at least lasting price changes
1:07:05particularly on salient goods like eggs
1:07:08in the store or gasoline prices at the
1:07:11pump have a disproportionate effect
1:07:14versus say CPI inflation I shouldn't put
1:07:17quotes on it CPI inflation um in terms
1:07:20of their voting behavior and their
1:07:22overall behavior. I don't think that so
1:07:25I think continuing political scientists,
1:07:27economists, pe public opinion
1:07:29researchers continuing to unpack that is
1:07:31worthwhile. I don't think that
1:07:34translates into a micro macro divide in
1:07:37terms of policy response very much
1:07:40because what essentially you've got is a
1:07:43situation where
1:07:46people want prices to fall in certain
1:07:49industries and even at a micro level it
1:07:52it's not clear we have tools to do that
1:07:56whereas if the AI bubble pops and the
1:07:59Fed simultaneously and partially
1:08:02causally
1:08:03is hiking rates,
1:08:06prices will go down.
1:08:08So, it it's I I realize that there is an
1:08:12increasing drum beat from both Wall
1:08:14Street and certain political economy
1:08:17types to say it's a micro problem, but
1:08:21in the end, um the record of doing these
1:08:25supply side interventions is not great.
1:08:27Now, that doesn't say we shouldn't do
1:08:29the affordability agenda.
1:08:32But it's not it doesn't map that way um
1:08:37in my view. But I do want to stress
1:08:39unlike some other things I think this is
1:08:41a live question and for a very solid
1:08:43different view. Peter Orzag who some of
1:08:45you know the former CBO OM director
1:08:48who's now at Lazard wrote gave a very
1:08:50interesting lecture at London School of
1:08:52Economics about a month ago saying in a
1:08:54world of supply shocks we need to think
1:08:56about this totally differently. So
1:08:59>> I think this is an open issue, but my
1:09:01read is so far, yes, take seriously
1:09:04price level effects and sticky rises in
1:09:07prices of individual goods, but no,
1:09:10don't give up on the macro approach.
1:09:12Just for Suzanne, you're talking about
1:09:15something much more broad than
1:09:16economics. And frankly, I support the
1:09:18idea that for all this talk, foreign
1:09:21policy is separate from economics. It's
1:09:24not determined by pocketbook. It should
1:09:25not be determined by pocketbook. But I
1:09:28would just say I think if I may the the
1:09:31vi the part the economics part of the
1:09:33vision I think we need to put out there
1:09:36is twofold. First as I tried to say
1:09:39earlier
1:09:41it's actually been win-win. Um the US
1:09:44role in the world economy has been good
1:09:46for the US economy and good for
1:09:48Americans pocketbooks and people who say
1:09:50otherwise are just wrong. Unlike what I
1:09:52said to Jonathan I think the evidence is
1:09:54clear. The second point is if I can
1:09:57invoke Richard Cooper, Joe Nye, Bob
1:10:00Cohane,
1:10:02interdependence is reality.
1:10:06It goes the thing Shannon was saying
1:10:08about Latin America. It's just reality.
1:10:12And so the question then is attempts at
1:10:15self-sufficiency and withdrawal, do they
1:10:18work better or worse than attempts to
1:10:20manage interdependence?
1:10:22I may not have the language or the
1:10:24appeal how to communicate that to
1:10:26people, but in the end I think that's
1:10:29got to be part of the overall argument
1:10:31is saying just reality is this and we
1:10:36have a record that shows more again sort
1:10:39of echoing Charlie but I don't think
1:10:40John disagrees
1:10:43more constructive engagement to use a
1:10:45bad term um is the way is the better
1:10:48option for dealing with the reality of
1:10:51interdependence.
1:10:52Thank you chairman.
1:10:54>> Um let me just say a word about the the
1:10:56question of what does the sort of for
1:10:58lack of a term west have to offer visa v
1:11:00China right? China has a tech stack.
1:11:02China has you know why wouldn't you just
1:11:04just buy from them? It's it's the right
1:11:05price and and and all of that. And I
1:11:07guess um I mean if you you sort of look
1:11:10at the and we've been talking a little
1:11:12bit about the heavy hand of of the US
1:11:14over many of these economies and places.
1:11:16People feel the same way about China,
1:11:18right? That China has, as we all know,
1:11:19weaponized, you know, rare earth.
1:11:22They've weaponized other technologies.
1:11:23There's a challenge of being too
1:11:24dependent on China. And I think lots of
1:11:26emerging markets, I mean, lots of mature
1:11:28markets, lots of emerging markets feel
1:11:29this, too. And so looking for an
1:11:30alternative. The west can provide an
1:11:32alternative. And then for, you know, the
1:11:34the countries and to, you know, to
1:11:36John's point, you know, there are a lot
1:11:37of democracies out there. And and there
1:11:39are a lot of them are emerging markets,
1:11:40right? They're not sort of advanced
1:11:42mature economies. And you know there are
1:11:43more people who live in democracy in
1:11:45Latin America than almost any other
1:11:46place besides India right in terms of
1:11:48total number of people. So you know they
1:11:51want many of them you know privacy for
1:11:53their citizens they want sort of
1:11:55sovereignty over their data there
1:11:57there's things that they want and
1:11:58perhaps the west can provide it and that
1:11:59technology or or sort of those products
1:12:01visav China says one thing um on the on
1:12:04the sort of what do the democrats do
1:12:05right and you know leave it to the
1:12:07Democrats to sort of snatch defeat from
1:12:08the jaws of victory like let's see what
1:12:10happens here but um but I will say you
1:12:13know kind of the the early readout we've
1:12:15seen from from these elections perhaps
1:12:17on on this issue is that you know one um
1:12:20I think when sort of all is said and
1:12:21done and we kind of do a rehash um the
1:12:25sort of moderate candidates were the
1:12:26ones who won and who won with you know
1:12:28this the the sort of momentum in the
1:12:30force and and not the sort of more
1:12:32extreme um in either party but but
1:12:34within the Democratic party um two uh
1:12:37the Democrats will have a pretty sizable
1:12:39majority a much bigger majority in the
1:12:41House and and more seats than they
1:12:42thought in the Senate. So there'll be
1:12:44some room for um losing a couple in
1:12:47votes and the and the like so that you
1:12:49can kind of find a more centrist path.
1:12:51And three, the the sort of momentum in
1:12:53the number of governorships that are now
1:12:55under you know the the Democrats. Um, I
1:12:58think that matters because, you know,
1:13:00governors, many of them campaigned on a
1:13:01sort of more moderate and they they have
1:13:02to be pragmatic because they're actually
1:13:04governing. You know, they're executives.
1:13:05And so, I think perhaps if if that
1:13:07weight of the Democratic party comes
1:13:09around those who are actually playing
1:13:10those roles in the most populous states
1:13:13in the United States, right, who are
1:13:14going to be run by by Democratic
1:13:16governors, hopefully that leads to um a
1:13:19bit more of a of a pragmatic center. and
1:13:21and you know and I think the last thing
1:13:22I'll say is um look there are many
1:13:25Democrats who are kind of out for you
1:13:28know accountability or vengeance however
1:13:30you want to you know frame that question
1:13:32but I but I think many do see the worry
1:13:34about the challenges that you're putting
1:13:35forth is that you need a constructive
1:13:36agenda so two years from now um you can
1:13:39provide that
1:13:41>> just one comment on yours which much of
1:13:43which I fully agree with but I was
1:13:45listening to Ezra Klein's diagnosis of
1:13:49you know the results I think I don't
1:13:50know if it was today or yesterday and he
1:13:52actually made the point that there is no
1:13:53story of who won that it you know
1:13:56sometimes it was moderate sometimes it
1:13:57was proletic and and I think the one
1:13:59argument was that there were candidates
1:14:02who really really understood the local
1:14:05you know the context in which they were
1:14:07running obviously really soon after the
1:14:10election so we don't know but it but I
1:14:11think that the more general point is
1:14:13incredibly powerful and important
1:14:15especially the line about snatching
1:14:16defeat from the jaws I'm going to use
1:14:18that one um Charlie
1:14:21Uh on your question, Jennifer, I I worry
1:14:25that it's going to get ugly and
1:14:29they'll fritter away opportunities. Uh
1:14:32and if I were advising the Democrats, I
1:14:35would say don't impeach Trump. Don't
1:14:37impeach Hegathth. If you launch any
1:14:41investigation, focus on the corruption
1:14:43and the selfdeing because that registers
1:14:46with voters.
1:14:48but generally focus on health care and
1:14:52housing and infrastructure and improving
1:14:55the quality of life for working
1:14:57Americans. Get work done
1:15:01uh and be as um uh as as restrained as
1:15:05possible on on the anger front. Uh on
1:15:10Suzanne's question, I mean I think and
1:15:12and here I think John and I disagree. I
1:15:15think that that internationalism that
1:15:17you refer to
1:15:20is gone. It's the American electorate
1:15:24has has fractured.
1:15:26That bipartisan
1:15:29centrist consensus in favor of a robust
1:15:31American role in the world has
1:15:33evaporated. And it may come back, but it
1:15:36will take at least a generation and
1:15:38probably two to rebuild. And as a
1:15:41consequence, we have become
1:15:44unpredictable and unreliable.
1:15:47And I would I I hope that our alliances
1:15:51repair and that whoever comes next
1:15:53repairs those alliances, but they now
1:15:56have to factor in an irreparable loss of
1:15:59trust.
1:16:01Uh and that's simply because I if if a
1:16:04German or a Canadian says, "Can we trust
1:16:07you, Charlie?" I have to say I hope so,
1:16:10but I don't know. And that's simply
1:16:13because it's going to take a lot of hard
1:16:15work to repair our political center
1:16:17before I could say with confidence that
1:16:19we are on a steady course.
1:16:22uh on Iran and Ukraine.
1:16:27I think that that
1:16:30Trump is out of step with with the
1:16:33public as well as with his own party on
1:16:36Ukraine. And as a consequence, I can see
1:16:40some pivot back towards supporting
1:16:43Zalinski. I I don't think he's going to
1:16:46throw the book at the Russians. he's
1:16:48never gonna impose sanctions against
1:16:51China for buying Russian oil. Uh he
1:16:54might do what he's been doing, which is
1:16:56it kind of shade in the direction of of
1:17:00helping Zalinski a little bit, but the
1:17:02bottom line is that and this is
1:17:04something I've just picked up in part
1:17:05because I am in the beltway and I talk
1:17:07to Trump folks from time to time. They
1:17:11do not believe that this is America's
1:17:13problem.
1:17:15Trump generally has a very geographic
1:17:20view of the world. It's about location.
1:17:24And he thinks that he looks at Ukraine,
1:17:26he says, "This is not our problem. It's
1:17:28thousands of miles away." I think in
1:17:31some ways, even though he won't say
1:17:33this, he feels the same way about
1:17:34Taiwan.
1:17:36It's thousands of miles away. This is
1:17:38not our problem. And so I do think that
1:17:41there is a turning inward in the
1:17:43American electorate that Trump has
1:17:45tapped into and it's in some ways a
1:17:48byproduct of the stupid things that we
1:17:51keep doing. Iran,
1:17:54Afghanistan, Iraq, Libya, Syria, we keep
1:17:59launching failed wars of choice and that
1:18:02is spoiling internationalism
1:18:05uh
1:18:07a across a broad swath of the American
1:18:09public for good reason. Uh and Trump
1:18:14senses that. Vance senses that. And
1:18:17that's why I'm not very optimistic that
1:18:20in the end of the day they're going to
1:18:21again start sending weapons and money to
1:18:23Ukraine.
1:18:25>> So much to unpack there, but thank you
1:18:26um John.
1:18:27>> Yeah, I this has been a great
1:18:28discussion. I I mean what what gives me
1:18:31heartburn is when we hear Charlie say
1:18:34that we need to learn to live with uh
1:18:36autocracies and dictators. I Yes. Yes
1:18:39and no. We do. But that shouldn't be our
1:18:41topline strategy. Our strategy should be
1:18:44building a part of the world so that
1:18:47people who want to escape from autocracy
1:18:49and dictatorships have a space a kind of
1:18:51the free world needs to survive in a
1:18:55world that will inevitably be more
1:18:56fractured, divided, ideological,
1:18:59ideologically diverse. But for me, what
1:19:03is the the the most important end of
1:19:06grand strategy for our generation? you
1:19:08know our rendevu rendevous with destiny
1:19:11to use FDR's term uh is to provide the
1:19:17next generation and the generation after
1:19:18that with some towh hold in the world
1:19:21defined by free institutions open
1:19:24institutions enlightenment values those
1:19:27are the institutions domestic and
1:19:29international regional uh spread around
1:19:32the world that will provide the
1:19:33laboratories for solving tomorrow's
1:19:35problems that will inevitably be there
1:19:37and That's that is that is the liberal
1:19:40spirit and it seems to me that that is
1:19:43the strategy that we should pursue and
1:19:46then work with whatever it means for
1:19:48China and Russia
1:19:51because and this is my next point.
1:19:54I don't want to see a world order run by
1:19:58she Putin and Trump that throws Ukraine
1:20:02and Taiwan under the bus. But that's
1:20:04history tells us that's what great
1:20:06powers like Russia and China that are
1:20:09based on sphere of influence visions of
1:20:11order will do. We should be on the other
1:20:14side of that struggle because it will be
1:20:16a struggle. We don't know who will win.
1:20:18But we should look for a world order
1:20:20that will allow for people in Ukraine
1:20:23who want to live in a free society, be
1:20:26be tied to capitalism and democracy and
1:20:29Taiwan who want to live in a democracy
1:20:31and tied to those who have aligned
1:20:33interests can survive
1:20:36and then re reverse engineer what kind
1:20:38of international order would allow those
1:20:41two uh states uh on either side of the
1:20:45world and others like them, rich and
1:20:48poor. or small and large to survive. And
1:20:51then you start talking about what kind
1:20:53of international order you would have.
1:20:55And so we come to China and China is a
1:20:58different
1:21:00uh entity than Russia. uh uh uh and so I
1:21:03I I don't want to uh to to suggest that
1:21:07that China shouldn't be at the at the
1:21:10front of our our thinking, but China is
1:21:12not it's not simply of of of doing what
1:21:16Trump wants to do of find some kind of
1:21:18way to uh give concessions to China uh
1:21:22in return for uh trade opportunities uh
1:21:26the Trumpian business vision of USChina
1:21:29relations. But China is
1:21:34on a trajectory of dominating all
1:21:39industrial production around the world.
1:21:42They have now over 45% of industrial
1:21:45production AC across all the different
1:21:47sectors in the latter upward. uh and
1:21:49which is about what the US was after
1:21:51World War II in the 50s and it's going
1:21:53up
1:21:55and uh on sector after sector subsidized
1:22:00u technology not always indigenously
1:22:03produced shall we say uh China is eating
1:22:06the the lunch of all the other
1:22:08industrial countries and they have an
1:22:11industrial development model a
1:22:13development model that's premised on not
1:22:16ex uh on growth not take not being
1:22:18generated by domestic consumption but
1:22:20through exports. So for China to grow 3%
1:22:24rather than 2% next year, they won't
1:22:27expand domestic consumption. More more
1:22:30Chinese buy automobiles. They're going
1:22:32to export automobiles and take the slice
1:22:34of that production out of German auto
1:22:37workers.
1:22:39So it is a zero someum industrial game
1:22:42for the 21st century. who's going to
1:22:45have an industrial society with with
1:22:47China with with Charlie-like problems
1:22:50which I I agree with deeply and
1:22:52intensely. The middle of our industrial
1:22:55societies are weakening. Uh the old
1:22:57industrial jobs are disappearing but
1:23:00they're partly disappearing because of
1:23:02China's export uh development model. And
1:23:06of course, yeah, Japan did it, Germany
1:23:09did it, but it's a scale factor. It's
1:23:11just so large that it has implications
1:23:14that are systemic and structural. That
1:23:17doesn't mean we should start a war with
1:23:19China. Quite the opposite, it means that
1:23:21we should, as I've been suggesting
1:23:23tonight, uh gr up our loins,
1:23:27gather our our allies. Germany, Japan,
1:23:31the rest of these countries are in it
1:23:32like we are. They have alignment of
1:23:34interests. They have alignment of of of
1:23:37values. We have legacy institutions. We
1:23:40have muscle memory to have the kind of
1:23:44broadged inclusive coalition that that
1:23:48is partly rooted in values. And that's
1:23:52the kind of coalition that will get the
1:23:55respect of China because going Trumpian
1:23:59style to she and Putin looking for
1:24:04approval
1:24:07is not going to get you where you want
1:24:09to go.
1:24:10I think we've succeeded in having a very
1:24:13strong diversity of views. I actually
1:24:15mean that as a serious point, but it is
1:24:17really important. Um it's it's been a
1:24:20tremendous conversation. It will be the
1:24:22first amongst many on these topics also
1:24:25with this wider group. Charlie's book I
1:24:28think is right there. I strongly
1:24:31encourage you to buy a copy with the
1:24:34author's signature. Um but really u join
1:24:37us um in again thanking these
1:24:39extraordinary thinkers including the
1:24:42audience and those are tremendous
1:24:43questions from you tonight. Thank you so
1:24:45much.

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