The economic waves of Trump 2.0: Insights from The Economist's Zanny Minton Beddoes

Transcript: The economic waves of Trump 2.0: Insights from The Economist's Zanny Minton Beddoes

Ian Bremmer:

Hello and welcome to the GZERO World podcast. This is where you can find extended versions of my interviews on public television. I'm Ian Bremmer and today I'm asking an expensive question: Did Wall Street get President Trump wrong? On the campaign trail, candidate Trump promised to lower taxes and drastically reduce government regulation, and that was a message that resonated as much with Wall Street as it did with Main Street. And after surviving, if not thriving under President Trump's first term in office, the business community no longer feared Trump's unpredictability. They overlooked his fixation on tariffs, his promises of mass deportation. Surely, this was all posturing and bluster. No reason to take the man literally.

And so when Trump won in November, stock prices soared, and we all lived happily ever after. The end. In reality, the first months of Trump 2.0 have been a time of economic warfare and market volatility. President Trump slapped tariffs on America's largest trading partners and closest allies and then began to make good on a promise to deport millions of illegal immigrants. Important note that in February, Trump actually deported fewer people than Biden did in the previous year, but that's another show. So where is this all heading and what does it mean for the rest of the world? We're here to discuss the global implications of President Trump's volatile economic approach as the editor-in-chief of The Economist, Zanny Minton Beddoes. Let's get to it.

Ian Bremmer:

Zanny Minton Beddoes, wonderful to have you back on the show.

Zanny Minton Beddoes:

Thank you for having me.

Ian Bremmer:

So start big picture. What has surprised you the most and what has been a very different Trump 2.0 than the first term?

Zanny Minton Beddoes:

Well, I think that's what surprised me the most. It has been very different. I think there was an expectation after the elections. The markets went up in anticipation that they thought this would be a president who would deregulate, who would cut taxes, but that there wouldn't be too much on the whole protectionist side that he talked about and that's clearly proven wrong. Essentially, all the assumptions that were made before the inauguration so far haven't been proved right. We've had a lot of noise from DOGE and Elon Musk, but we haven't actually yet had very much deregulation. We've had a huge amount, instead, of uncertainty and kind of lack of strategy, it seems, with tariffs and we are now at the beginnings of a tariff war. And so I think the big shock has been, which really shouldn't have been a shock, but that this president who has talked about tariffs for the last 30 years ... Remember in the 1980s, he was taking out ads in The New York Times ...

Ian Bremmer:

Supporting.

Zanny Minton Beddoes:

Rooting for tariffs—

Ian Bremmer:

Yeah, Japan.

Zanny Minton Beddoes:

Against Japan.

Ian Bremmer:

Absolutely.

Zanny Minton Beddoes:

So he is now turning out to be a protectionist. That's one big shock. So I think we've had a bigger shock in economic policy than people were anticipating. This really is a protectionist presidency. But it comes on top of another big shock, which is a geopolitical shock, where I don't think anyone expected what we've seen geopolitically in the last six weeks or seven weeks where you've really had the president, it seems, not just trying to be tough with Europe and allies, but bullying them. Look at Canada, look at Europe, and cozying up to America's enemies. And I think that sense, particularly in Europe, that this is an administration that seems to be outright hostile to its allies is something that's not at all what was expected.

Ian Bremmer:

Now you said cozying up to America's enemies. Certainly, we see that with Russia and Putin and the Europeans have not exactly been asked or engaged on that. You wouldn't say he's cozying up to the Chinese at this point?

Zanny Minton Beddoes:

No, at this point, though. But we've seen more tariffs imposed actually on America's allies and more sort of sense of a tariff. There have been tariffs imposed on China, but so far we've seen a less aggressive posture towards China than perhaps I might've anticipated. But certainly relative to the aggression that's being shown, say, to Volodymyr Zelensky, the president of Ukraine. I mean, President Trump really in the first weeks of his presidency, has been tougher on America's allies than he has on America's enemies.

Ian Bremmer:

So a view from London right now, where you're based. Would you say that the biggest shock so far has been the tariff focus or has been the geopolitical focus and why?

Zanny Minton Beddoes:

Both. It's too simplistic to say one is a bigger shock than the other. They're both big shocks.

Ian Bremmer:

Starmer has tried to act as a bridging element here, like things don't seem to be as panicky if you're just watching him publicly.

Zanny Minton Beddoes:

Yes, but just stand back. Let's sort of run through what's happened in the last few weeks.

Ian Bremmer:

Yep.

Zanny Minton Beddoes:

Geopolitically. You've had a president, as I said, who has said nice things about Vladimir Putin, who called Zelensky a dictator, whose vice president went to the Munich Security Conference where you and I both were, and I'm sure you were in the room.

Ian Bremmer:

I was. Yep.

Zanny Minton Beddoes:

I was there listening to him.

Ian Bremmer:

Yeah, absolutely.

Zanny Minton Beddoes:

And he gave a speech that was outright hostile towards the European Union.

Ian Bremmer:

Towards Europe.

Zanny Minton Beddoes:

Yeah.

Ian Bremmer:

That's right.

Zanny Minton Beddoes:

And the shock was palpable in that room.

Ian Bremmer:

It was.

Zanny Minton Beddoes:

He used all kinds of language that has very dangerous, historic echoes, "the enemy within in Europe" and all that kind of stuff. So that was sort of exhibit A, if you like, of an administration that seemed to be really quite aggressive towards Europe. Then exhibit B was that infamous scene in the Oval Office, which ...

Ian Bremmer:

Between Trump, Vance, and Zelensky.

Zanny Minton Beddoes:

President Trump and Vance and Zelensky.

Ian Bremmer:

Yes.

Zanny Minton Beddoes:

In Europe, that was when, I think, the shock went beyond the political elites to ordinary people. I remember I saw my father, who is 85 years old and not particularly focused on all these things, the same day that that happened and he just could not believe what he'd seen. And lots and lots of people, ordinary people who are not that engaged in transatlantic relations, saw that behavior, saw the treatment of Vladimir Zelensky and thought, "What is this? This is our greatest ally. This is the country that's been our ally for 80 years." But then soon thereafter, there was a decision to cut off military support for Ukraine and intelligence sharing.

Ian Bremmer:

Intelligence, that's right.

Zanny Minton Beddoes:

Now that has now changed. After the agreement in Saudi Arabia with the Ukrainians, the military support was reinstated, but nonetheless in Europe there was just a sense of, "Can we rely on the United States?" The United States is the anchor of NATO. It set up the postwar system. But here, it was cutting off intelligence and cutting off military support to a country that was absolutely dependent on it. And I think now you're seeing in the political, in governments in Europe. You're seeing them trying to sort of obviously keep this relationship together, that you're absolutely right. Prime Minister Starmer trying his best to be a bridge across the Atlantic. Mark Rutte was in Washington recently, head of NATO. Again, flattery, diplomacy, working out how to work with Trump because everyone knows that in the short term, at least, Europe would be in real, real trouble if the US turns back.

Ian Bremmer:

The US walks away, yeah.

Zanny Minton Beddoes:

But at the same time, I think you have seen a serious shift within Europe both in terms of the urgency of defense buildup and the nature of that defense buildup. So Germany, biggest change in Germany, I mean, in Germany there has been a real transformation. Friedrich Merz, the incoming chancellor, a man who is an Atlanticist to his core, he's the sort of quintessential German Atlanticist, gave the night of the election ... He basically said, "It's five minutes to midnight and we need to act." And has in the weeks since then, I think, shocked everybody by his willingness to do a deal with his coalition partners, the SPD, to dramatically increase Germany's capability for defense spending.

Ian Bremmer:

Yes.

Zanny Minton Beddoes:

And really, this is big stuff.

Ian Bremmer:

It is. It's something that they probably should have done years ago.

Zanny Minton Beddoes:

Absolutely something that they should have done years ago.

Ian Bremmer:

And now they're doing it because of Trump.

Zanny Minton Beddoes:

And now they're doing it because of Trump.

Ian Bremmer:

How do we feel about that?

Zanny Minton Beddoes:

But just to me ... Because if it was just that they were doing that, then you'd think this is great. He's done more for European unity than any other US president.

Ian Bremmer:

And there is some truth to that.

Zanny Minton Beddoes:

There's absolutely some truth to that. And if that's where it stopped, I would be ...

Ian Bremmer:

But of course, it doesn't stop there.

Zanny Minton Beddoes:

I would be thrilled. But what has also happened is that there is now a concern that Europe can't rely on America, and even more that America under Trump may be hostile to Europe. And so you're seeing an anger. You're seeing an unwillingness. The Portuguese now not keen on buying F35s. You are seeing a recognition in Europe that we need to build up our own military defense industry. I think in Poland, there is now talk of having nuclear weapons or wanting nuclear weapons positioned in Poland. You're seeing ...

Ian Bremmer:

Germany wants to do nuclear sharing, as does France.

Zanny Minton Beddoes:

Yeah. You're seeing essentially a return of some kind of protagonism And you could say, "Well, that's great. That's what the Europeans need to do." But if you couple that with the tariff debate, which we started with, and the way that the US is behaving on tariffs, you have, I think, an anger at the United States amongst its allies that is damaging. If your foreign policy, which I think is the case in this White House, is a sort of mafia mobster kind of foreign policy where basically you go around bullying and you go around saying, "Have you got the cards? Have you not got the cards?" You have a very transactional approach. In the end, your allies are A, not going to like that. I mean, you're going to behave accordingly.

Ian Bremmer:

So Zanny, here's my question. Was there a proper path here? Because I mean, for a very long time, the Americans have been trying, cajoling, pressuring, lightly engaging, saying, "This is important. You need to do more." And it wasn't just the US. That was even through a Russian invasion in 2014, the annexation of "little green men." It was even through 2022 and yet nothing got the Germans and French to quite move ...

Zanny Minton Beddoes:

That's not quite right.

Ian Bremmer:

No, but it's not like they didn't spend more. They spent more.

Zanny Minton Beddoes:

That's not quite right. If Trump won, they spent more. Exactly.

Ian Bremmer:

But nothing close to what we are actually seeing now of whether the Europeans are prepared to take the lead on defense. So what do you think the US should have done?

Zanny Minton Beddoes:

Let's just go through the facts.

Ian Bremmer:

Yeah.

Zanny Minton Beddoes:

Because the President Trump always talks about some fictitious $350 billion that the US is supposed to ...

Ian Bremmer:

When it was really $130 billion, yes.

Zanny Minton Beddoes:

Yes. And collectively, the Europeans actually ...

Ian Bremmer:

Spend more.

Zanny Minton Beddoes:

Spend more.

Ian Bremmer:

Less per capita, but yes.

Zanny Minton Beddoes:

Yeah, but they spend more. So let's sort of get some facts on the table. The Europeans stepped up. When Vladimir Putin invaded Ukraine, the Europeans came together and stepped up. Yes, the United States provided more military weaponry, but collectively the Europeans stepped up and they are stepping up in defense spending. Are they stepping up now, faster, than they might've done had there not been this belligerence from the US? Possibly. I'll grant you that.

Ian Bremmer:

Clearly, not possible. Clearly.

Zanny Minton Beddoes:

Well, yes. Yes, but they are also very aware of the threat from Putin. But okay, clearly they're stepping up. So notch that. The US achieved greater defense spending by Europe. At the same time, the kind of bullying approach and the loss of belief that the US can be relied on is very damaging to United States.

Ian Bremmer:

Again, I'm granting you that. I'm saying what do you think the Americans could have done, if anything, that would not have caused this kind of damage? Which is a problem that would have led to a true willingness and capacity of the Europeans to ... And it's not just about defense spending. It's also about competitiveness. It's also about growth.

Zanny Minton Beddoes:

So I might have started by not starting a trade war. I'm not sure who benefits from this trade war. I mean, you know your economics as well as I do. There are no real beneficiaries from an extended trade war. And when you go into tit-for-tat retaliation, everybody is worse off. Some may be even worse off than others, but everybody is worse off. I see some logic for the pressuring the Europeans to spend more on defense. In fact, I see a lot of logic in that.

Ian Bremmer:

Yeah.

Zanny Minton Beddoes:

But on the economic side, I don't understand why it is in the United States' interest to attack its closest allies over trade in the way that it has. Canada. There is no economic logic for the nature of this tariff war. In the beginning, it was because it was justified because of immigrants and because of fentanyl. Now it's not clear to me what the justification is for the latest one. Similarly, for the Europeans, when you have the reaction of President Trump when the Europeans understandably threatened counter-retaliation, he then says, "200% tariffs on wine and champagne."

Ian Bremmer:

Right.

Zanny Minton Beddoes:

It's kind of kindergarten-esque actually, I mean, with much more dangerous consequences.

Ian Bremmer:

And I'm not trying to justify the case, but I am trying to press, given what they are saying, on how you respond, which is you know that they're in a stronger position as an economy. These are tactics. These are not end goals. In the first term, they also bullied Mexico and Canada and ended up with the USMCA that led to improved economic integration between the three countries. Is there any justification in that argument in your view?

Zanny Minton Beddoes:

So if there were a strategy that could be discerned from this, I'd be delighted if you explained it to me. In the first term. I think with the negotiations over the USMCA, there was a strategy I grant you. This time, I don't quite understand what the desired end goal is. One explanation is that President Trump has a kind of McKinley-esque view of spheres of influence and high tariffs behind which the United States economy will prosper. That was the late 19th century. It was not the US economy integrated as it is in the 21st century.

Ian Bremmer:

It's the global economy, correct.

Zanny Minton Beddoes:

I don't think that is a kind of plausible end goal. Then there's the notion of reciprocal tariffs, which you ...

Ian Bremmer:

Hear a lot about.

Zanny Minton Beddoes:

April 2nd.

Ian Bremmer:

Yeah.

Zanny Minton Beddoes:

We are going to hear about how the US will impose reciprocal tariffs. If you have reciprocal tariffs, literally the same tariff imposed that every country imposes on you on every good, you're going to have some millions of tariffs, it's going to cause extraordinary complexity. And the whole basis of the post-war trading system was essentially predicated on the idea that if a country imposed a tariff, it would impose the same tariff on everybody. It's called most-favored nation status in the kind of jargon. That as you know, Ian, is the underpinning of a global trading system ...

Ian Bremmer:

Correct.

Zanny Minton Beddoes:

That has not only underpinned prosperity for all countries, it has helped the US. This is, I think, the kind of fundamental misunderstanding that President Trump and those around him who buy this have, that they think the US has somehow been hurt from this system and it hasn't been. It has gained enormous advantages from [inaudible 00:15:08].

Ian Bremmer:

The question again, the pushback question for that specifically is if those tariffs actually are imposed and you end up with millions of tariffs that are tit-for-tat exactly the same level, your argument holds. We've already seen with a number of countries, India for example, proactively reducing some of their tariffs because they're concerned about the American threats. Would you feel differently, despite all the short-term pain, if we end up seeing that a number of countries around the world end up proactively responding to reduce their tariffs against the United States in anticipation of trying to cut deals with a much more powerful Trump leading a much more powerful US economy? Is that plausible?

Zanny Minton Beddoes:

Well, we are already seeing retaliatory tariffs or the threat from all the threats from other countries.

Ian Bremmer:

To begin with, yes. Of course.

Zanny Minton Beddoes:

Well, but ...

Ian Bremmer:

From some countries, not from others. Yes.

Zanny Minton Beddoes:

From some countries, not from others.

Ian Bremmer:

Right.

Zanny Minton Beddoes:

But if you have this push towards a whole range of bilateral tariffs, conceivably you can have a world where this ends up in zero tariffs, but I see no evidence that that is the world we're going to end up in. And I think that even in the case of Canada, you don't even have that kind of economic logic for what they're doing. And these are very integrated supply chains. You are having entire industries that essentially will grind to a halt if these tariffs are imposed. Maybe if you were explaining the policy in the White House, it would have a greater apparent logic. But when you hear it explained by the policymakers who are doing it there, there doesn't seem to be any clear strategy to it and the damage to a very integrated supply system is great.

And what if we could sort of stand back a little bit more? Because I think you can get very easily sort of sucked into the weeds of this. We're in 2025. We're in a global economy that, I think, is in the midst of three big shocks, each of which is big enough for our grandchildren to have a chapter in their history books. The first is the geopolitical shock that we've talked about. That is a United States that has gone from being an upholder of an alliance system that it created to, at the very least, challenging it and possibly undermining it.

Ian Bremmer:

Its own order, yes.

Zanny Minton Beddoes:

The second is an economic shock, which we've just been talking about. A global trading system whose biggest component, the United States, now appears to be set on creating a completely different model of tariffs, whether they're reciprocal tariffs or whether it's a broad tariff war. The third shock, which we haven't talked about at all yet, is the biggest technological shock certainly since the industrial revolution, possibly longer, the advent of AI happening incredibly quickly. Each of those shocks together, really, really profound. The three together, potentially incredibly dangerous. I think if you have that kind of technological revolution at the same time as you're upending a geopolitical order and upending the economic rules that have lasted for the last 80 years, you have, at the very least, massive uncertainty and the potential, I think, for serious damage.

Ian Bremmer:

When you are willing to break, when you're a revolutionary leader, that's saying, "The system as it stands does not work the way I would like it," there's not only uncertainty, but businesses are going to keep capital on the sidelines and the rest. I am wondering do you believe that the outcome is necessarily worse number one for the US and number two for the world necessarily?

Zanny Minton Beddoes:

Yes.

Ian Bremmer:

Okay.

Zanny Minton Beddoes:

Because of the combination of the geopolitical shift, which is antagonizing allies and breaking up an alliance system, the economic shift towards a tariff system. Remember, I work for The Economist. We have, for 180 years, argued for free trade. I fundamentally don't believe that higher tariffs lead to prosperity and I don't think this is the easiest route to rapidly lower tariffs. I think it is very, very likely to go wrong. So I think the combination of those two together will risk leading us to a fundamentally-worse place. There are areas, many other areas, of what this administration wants to do that I think could be potentially very good. I'm all in favor of rationalizing government, of cutting unnecessary spending, of a dramatic overhaul of sclerotic bureaucracies, cutting red tape. There's a huge amount to do there.

So just don't get me wrong, it's not that everything this administration wants to do is wrong. Not at all. I think there are lots of priorities that are really good. I don't hanker for the sort of exact post '45 order. The world changes. The world is changing because of those shocks I've been describing. And we need to create new institutions. We need to create new ways for countries to work together. In an AI-driven world, things are going to be very, very different. But I just find the combination of this what really appears to be a sort of bullying transactionalism, where the view is that your gain must be my loss.

Ian Bremmer:

Sum-less. Yeah.

Zanny Minton Beddoes:

There's a zero-sum world in this administration's view and that, I genuinely think is, fundamentally misguided.

Ian Bremmer:

It's not about common values. And since the transatlantic relationship was ...

Zanny Minton Beddoes:

We haven't even mentioned values.

Ian Bremmer:

In large part based on not just common interests, the common values. That is clearly upsetting to the Europeans. So if we look ahead a few years, not 10, two, three, Trump is still president, where do you think the transatlantic relationship will go? How will the Europeans look differently towards the US and towards the rest of the world concretely from where we experience it right now?

Zanny Minton Beddoes:

So it depends what happens. It depends whether this administration calms down and doesn't act as aggressively as it seems to be threatening thus far.

Ian Bremmer:

And there's been a little bit of that so far.

Zanny Minton Beddoes:

Let me play you a couple of scenarios.

Ian Bremmer:

Sure.

Zanny Minton Beddoes:

I think the most benign scenario is that the Europeans are shocked into much needed defense spending, that that actually kick-starts the European economy. It's based on the creation of joint debt.

Ian Bremmer:

And their growth will go up on that.

Zanny Minton Beddoes:

Yeah.

Ian Bremmer:

Yeah.

Zanny Minton Beddoes:

Because in the short term, this will be funded by borrowing. It's based on the creation of some joint debt that kick-starts an alternative safe asset to the dollar. You have a growth in the Euro as a safe asset. It kick-starts kind of new clusters of innovation in Europe, MilTech, military technology, with the Ukrainians. And, and this is the end, if the United States doesn't completely sell out Ukraine, doesn't sign up to whatever Vladimir Putin wants, which I think is a big if ...

Ian Bremmer:

Yeah.

Zanny Minton Beddoes:

But if it does that, then you could end up in a reasonably good outcome in Europe. I think that's, in fact, better than the status quo.

Ian Bremmer:

And by the way, would that outcome include the United States at that point in your view? Do you think that's plausible?

Zanny Minton Beddoes:

Well, I think ...

Ian Bremmer:

Trump saying, "Hey, this is a win. Now I can backstop these guys."

Zanny Minton Beddoes:

Theoretically plausible.

Ian Bremmer:

But you think it's very unlikely.

Zanny Minton Beddoes:

I think it's very unlikely ...

Ian Bremmer:

Okay. That's important.

Zanny Minton Beddoes:

That there will be any meaningful support. I hope there will be and I hope that this administration recognizes that it's in its interest to do that, but have you? I haven't seen much evidence in recent weeks that there is meaningful ...

Ian Bremmer:

Does NATO still hold in that scenario?

Zanny Minton Beddoes:

So NATO, I'm sure, still exists as a structure.

Ian Bremmer:

But does it hold? Is it strong?

Zanny Minton Beddoes:

The question is whether if you are in Estonia, or indeed in Poland, you can with 100% certainty say, "If push comes to shove and Putin does something to attack my country, can I be 100% sure that the Americans are with me?" If you were in Poland, would you think that?

Ian Bremmer:

Less so.

Zanny Minton Beddoes:

Exactly.

Ian Bremmer:

But with American troops on the ground, I'd feel much closer to 100. With spending of 5% of your GDP on defense, I'd feel much closer to that.

Zanny Minton Beddoes:

Yes, and that's why we're doing it.

Ian Bremmer:

Poland is less of a problem.

Zanny Minton Beddoes:

So that's why the Europeans are doing that. We've talked about the good outcomes there.

Ian Bremmer:

Yeah.

Zanny Minton Beddoes:

Unfortunately, you can go along to worse outcomes. If the trade war with Europe escalates, and it won't get completely out of control, but if you have tit-for-tat tariffs on goods, you could see Europe starting to think, "Well, the only way that you can succeed with this administration is to stand up to it." And you may have Europe starting to think about, in a more Trumpian way, what are its assets? What is its leverage? Collectively, Europe actually has a very big market, as you know. Collectively, America defense depends for its sort of defense posture on its European basis. So Europe is hugely reliant on US support for defense. But actually, the US ability to propagate beyond that depends on Ramstein Air Base and places in Europe.

Ian Bremmer:

In Germany, yeah.

Zanny Minton Beddoes:

In derivative markets, commodities, finance markets, Europe is really important. Even in the tech sector, there are choke points. European companies, ASML, a Dutch company. Very, very important. So Europe has assets and I hope very much we don't get into a world where other countries behave in the way that the United States seems to behaving, which is, "We have the power we can push around." But I think you shouldn't sort of completely assume that countries will say, "Well, we're weaker than the United States. We have to do whatever we're told to do." The history does not suggest that happens. If you look back at the 1930s, the Smoot-Hawley tariffs were introduced. That was bad. But what was really bad was the tit-for-tat retaliatory tariff spiral that happened. And every country knew that things would be worse if they imposed retaliatory tariffs, but they ended up doing so.

Ian Bremmer:

And what I'm hearing from you is you believe the trajectory right now is closer to the negative scenario?

Zanny Minton Beddoes:

Look. I'm, as you know, a born optimist and I hope that that's not the case. But I am more worried about that than I have been in a long time. And when I see what's happened in the last few weeks in terms of both the rhetoric from the US and the actions, I worry that there are certainly some people in the orbit of President Trump who have outright hostility for Europe. It's not just that they don't care about it or think it doesn't spend enough on defense. They have outright hostility who seem to have designs on everything from Greenland to Panama that are kind of territorially expansionist, which I haven't been expecting at all. And you have a President Trump who is very, very confident in his own strategy or his own views of what he wants and where he wants to go. And his advisors around him, I think, seem to be sort of like courtiers with a king.

Ian Bremmer:

Well, they're certainly not going to push back. That's right.

Zanny Minton Beddoes:

Not giving him any pushback and trying to get his attention by, in the most perfect made-for-TV way, saying what they think he wants them to say.

Ian Bremmer:

Why do you think democracy around the world is holding less in this environment than had been so expected post-Cold War?

Zanny Minton Beddoes:

What is very clear is that the values that we stand for, free trade, open societies, all of that, are now much more under threat than they were even 10 years ago. I grant that. I find it more useful to be somewhat more specific than, say, democracy under threat. Do you mean, for instance, in Europe, you have clearly seen the rise of populist right parties? That is a challenge to the kind of centrism that has held in Europe. You have what's been happening in this country, and at the same time, you've seen from Hungary to some degree, in India, you've seen democratically elected regimes entrench themselves and become quasi-authoritarian. Those are developments that come from a number of factors, but one is people are frustrated. Clearly, there are a large subset of the population that is unhappy with the status quo, and we've had conversations about this before.

Some of it is economic. Some of it is that people feel that their children are not going to have as good a life as they did. Some of it is much more social and cultural. It is about a sense that society is changing too fast. Immigration is clearly a big part of it on both sides of the Atlantic. There is a sort of frustration with the pace of change, and what's, I think, alarming is that the pace of change is going to accelerate much further ...

Ian Bremmer:

It's going to speed up. Of course it is.

Zanny Minton Beddoes:

Because of AI. So, put all of those things together, and there's a sense that the prevailing political system is not delivering. And you see it even in continents like Africa, where there's a growing disillusionment with democracy in Africa. I think it's something that is deeply concerning. It depends on not just economic recipes. I think more rapid growth is essential, which is one of the other reasons why I really worry about the economic developments we've been talking about because if I'm right, the end result is ...

Ian Bremmer:

They're going to hurt both immensely.

Zanny Minton Beddoes:

Less prosperity. This is really bad for global democracy.

Ian Bremmer:

And potentially really good for a lot of the people that Trump wants to see win.

Zanny Minton Beddoes:

Yeah.

Ian Bremmer:

In that regard, right? So maybe there's more strategy behind it. But the reason I asked you about the big democracy picture there was to the final question, which is how much does this make you think that strategically, China globally is going to increase its influence dramatically? Are they a winner as a consequence of everything we've seen for the last couple of months?

Zanny Minton Beddoes:

You might think that the obvious answer is yes, clearly China is going to win if the democratic world is looking weaker and weaker. But I'm not so sure for a couple of reasons. The first is that China itself is actually in a big mess, as you know very well, but the economy is in real trouble. The economic model is not working. It's essentially a sort of Japanese property bust and debt crisis on steroids. And for a whole generation of Chinese people, they have a similar view as many in the west. They don't see that they have the opportunities that their parents did. Their parents had a transformational period of economic growth. And yet Chinese young people, high unemployment rates, much weaker economy, and a very authoritarian leadership.

And so the underlying social contract in China, which was, "Fine, we'll have this authoritarian regime, but it will deliver ongoing prosperity," that social contract is not working. And so I think China is domestically weaker and I also think that China's very heavy-handed attempts at gaining influence particularly in the emerging world have, in many places, backfired too. It was so aggressive in its wolf warrior diplomacy that I think there's a wariness of China in much of the world, so I think we're in a much more vociferous world where I don't think weakness in the west necessarily means the rise of China.

Ian Bremmer:

So I mean, for someone who's fundamentally optimistic, no one big is winning, right? I mean, we can point to the Gulf States and so forth.

Zanny Minton Beddoes:

You and your G-Zero world.

Ian Bremmer:

But that's what I'm hearing from you, right?

Zanny Minton Beddoes:

That we're in a G-Zero world?

Ian Bremmer:

No, I'm hearing from you that there are no ... I mean, you look at the US, you look at Europe, you look at China, these big countries with different models and different ways of trying to work for their citizens. And actually, right now, it's just kind of all going to crap.

Zanny Minton Beddoes:

So it depends what you mean by, "No one is winning." I think the flip side of everything we've spoken about, and we've sort of focused on the negative side of the destruction of the old order, if you will. The flip side is that this technological revolution is going to bring enormous gains from life expectancy to medical innovation. Our lives are going to be transformed in the next few years and that, in itself, makes me very optimistic. From that, I think new things can be built. New things can be built from different parts of the world. If you want to feel optimistic now, you go to Abu Dhabi, you go to India. You go to places where, yes, there are some political problems, but there is huge growth and ...

Ian Bremmer:

Transformational growth. That's right.

Zanny Minton Beddoes:

And huge transformational societies. And so it's not clear to me that what we end up with ... It's a very dangerous time, as I said at the beginning. I think it's hugely uncertain. Things could go very, very wrong, but they don't have to. And so I'm not sure that I agree that just because the old system is withering, necessarily, no one's winning.

Ian Bremmer:

And maybe the citizens in some of these new countries that are coming up.

Zanny Minton Beddoes:

At some point, we may be present at the destruction. At some point, somebody has to step up and help create the new.

Ian Bremmer:

Present at the creation. Zanny Minton Beddoes, thanks for joining me.

Zanny Minton Beddoes:

You're welcome.

Ian Bremmer:

That's it for today's edition of the GZERO World podcast. Do you like what you heard? Of course you do. Why not make it official? Why don't you rate and review GZERO World five stars? Only five stars, otherwise don't do it, on Apple, Spotify, or wherever you get your podcasts. Tell your friends.