How politics could derail the world economy in 2025
How politics could derail the world economy in 2025
With Donald Trump’s second inauguration about 10 days away, it’s a good time to survey what lies ahead for the U.S. and global economies. What may drive that conversation in 2025 are the worsening tensions between the world’s two mightiest nations, America and China. This view comes from the political risk consultancy Eurasia Group and its annual list of top risks for the year ahead.
Ian Bremmer is the founder of Eurasia Group and also runs the global news and analysis outlet Gzero Media. He spoke with “Marketplace Morning Report” host David Brancaccio about his list of risks. The following is an edited transcript of their conversation.
David Brancaccio: Middle East — volatile and fragile. You call Russia a rogue world power. But you and I here, let’s go with the U.S. and China. I mean tensions, clearly, but you say the relationship is unraveling. What’s your view on where U.S. and China go this year?
Ian Bremmer: Trump is going to kick off with tariffs against China significantly higher than they were in his first term, and [President Joe] Biden kept. And also with a national security team that is much more hawkish on issues of technology, export controls. And the Chinese economy is doing very badly. They are preparing for this to go off the rails and to hit the Americans back tit for tat.
Brancaccio: That’s going to make your corporate clients nervous. That sounds unstable to some.
Bremmer: They don’t like it. They’d really like the U.S.-China relationship to be more normalized. Now, to be clear, there’s a lot less rah-rah support for China among U.S. corporates, and even among global corporates, than there was five years ago. [That’s] in part because the Chinese economy, Chinese consumption, is just so soft. They’re not going to like the macro implications, but you’re not going to see the same level of pushback from the American corporates to say, “No, no, no. You’ve got to protect us in China.” A lot of them are already significantly hedging those investments.
Brancaccio: All right. Domestically, the economic system, as it stands, is not working for a significant part of the U.S. population. That’s how many say they feel. That was, in part, what brought the country a second Donald Trump term. Are you, Ian, prepared to give “America First” another chance and see what happens?
Bremmer: You’ve got to hope that he’s going to be successful — for us and for everybody. But you’re going to see implementation of tariffs across the board, not just on China. On Canada, on the Danes, on the Europeans, on others. You’re going to see, I think, at least a million immigrants deported from the United States. Both of those processes are going to lead to higher inflation rates in the U.S. They’re going to reduce growth. That doesn’t mean they won’t be popular, but a lot of people will be unhappy with what that means for the stock market. And the things that Trump would like to do, will do, that the business community loves — keep those taxes low, extend the 2017 tax reductions — a lot of that low-hanging fruit was already picked in his first term. So, on balance, you would expect that the economy is going to have a harder time responding, the U.S. economy, to what Trump will do in his first year.
Brancaccio: And what’s Ian Bremmer’s bet on whether or not, really, TikTok will start being knocked off of U.S. servers on the 19th of this month?
Bremmer: Look, that’s for the courts. But I will say that the fact that China doesn’t allow in Facebook, X or even the American version of TikTok for their own population implies that the U.S. should be concerned about these things.
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