Trending Now
We have updated our Privacy Policy and Terms of Use for Eurasia Group and its affiliates, including GZERO Media, to clarify the types of data we collect, how we collect it, how we use data and with whom we share data. By using our website you consent to our Terms and Conditions and Privacy Policy, including the transfer of your personal data to the United States from your country of residence, and our use of cookies described in our Cookie Policy.
{{ subpage.title }}
America’s “buy now, pay later” trap
The United States is #winning.
At least that’s how it looks if you’re tracking the economy, market indices, or the parade of countries lining up to cut deals with President Donald Trump. Asian and Gulf countries have pledged trillions of dollars in foreign direct investment in the US during the Trump presidency. The United Kingdom, the European Union, and several Southeast Asian nations have offered non-reciprocal trade deals. Canada folded on its plan to impose a digital services tax. Japan made unilateral concessions on automotive tariffs and Nippon Steel. European pharmaceutical companies are relocating production stateside to avoid punitive tariffs. Consumer confidence may be in the doldrums, but spending remains resilient (driven by the wealthiest Americans). Combined with an artificial intelligence spending boom and massive deficit spending – enabled by the dollar’s ongoing status as the global reserve currency – markets continue betting on American liquidity and growth.
It’s a heady moment. But while the short-term picture looks strong, the United States is systematically trading long-term strategic advantages for immediate tactical gains, with the accumulating costs hiding in plain sight.
Start with immigration. For decades, the cornerstone of America’s technological, economic, and soft-power dominance has been its ability to attract the best and brightest from around the world. Talented engineers, scientists, and entrepreneurs long chose the US because it promised opportunity, freedom, openness, and meritocracy – a fair shot at the American Dream. Now, the welcome mat is fraying. The Trump administration is increasingly hostile to immigrants (whether legal or illegal, skilled or unskilled), nativist sentiment among Americans is growing, and civil liberties (especially for non-white immigrants) feel increasingly uncertain. The numbers speak for themselves: International student arrivals to the US have declined by nearly 20% relative to last year. Meanwhile, China is rolling out new visas explicitly designed to poach high-skilled workers from the United States, and Canada is plastering airports with recruitment pitches. As America becomes a less attractive destination for top global talent relative to its competitors, the long-term economic damage will compound.
Then there are the universities. Yes, many humanities departments had grown intellectually insular and politically captured. Taking on these echo chambers for fringe woke ideology was long overdue. But the Trump administration has gone much further, slashing research infrastructure at America’s (and the world’s) finest universities. These institutions are what keep America at the cutting edge of advanced science and technology and draw the most talented students globally – the ones who become tomorrow’s leading researchers, inventors, and entrepreneurs. Undermining that ecosystem will erode one of the most important pillars of the US economy at a time when public trust in science itself is declining. Growing vaccine skepticism, embrace of conspiracy theories, reflexive rejection of expertise – these aren’t just cultural quirks, they’re a structural disadvantage when competing against countries where faith in science remains strong. They’re making Americans less capable of driving the next wave of technological advances, and therefore less likely to dominate the commanding heights of the world economy and geopolitics.
Consider artificial intelligence. The United States is racing ahead in consumer-facing AI – chatbots, engagement-maximizing social media algorithms, generative tools to produce yet-more-addictive slop, ever-larger language models that claim to be one step closer to superintelligence – because that’s where the money is. But these technologies are also fragmenting society, amplifying misinformation, and possibly contributing to a kind of collective psychosis. China, by contrast, has channeled AI development away from consumer applications in favor of defense and industrial uses, which carry less risk of social fragmentation and more strategic upside.
It’s a similar story when it comes to energy. The United States has become the world’s most powerful petrostate, producing more oil, gas, and coal than any other country. That’s not inherently a problem – fossil fuels will continue to power data centers, agriculture, and heavy industry for decades to come. But the US has effectively ceded leadership on post-carbon energy to China, which already dominates battery technology, solar power, next-generation nuclear, and supply chains for critical minerals. Washington is doubling down on hydrocarbons while letting the future of energy pass it by.
Or take trade policy. The Trump administration is imposing the highest US tariffs in a century – including on major allies, on countries with no bilateral trade imbalances, and on sectors where America lacks capacity to ramp up domestic production quickly enough to avoid shortages or inflation. Following Trump’s Oct. 30 meeting with Chinese President Xi Jinping – which put escalation on hold for a year and lowered fentanyl tariffs on China from 20% to 10% in exchange for politically-sensitive soybean purchases – the effective US tariff rate on Chinese imports now sits at 32%, close to the rate on ASEAN countries and lower than on its strategic partner India and South America’s largest economy, Brazil, which actually runs a trade surplus with the United States.
The cumulative result is a roughly 17% regressive tax on American businesses and consumers, which are forced to pay more for intermediate inputs and final goods. Paired with a sharp turn toward industrial policy and state capitalism, the US is moving away from the free-market principles that made its economy so competitive in the first place. Targeted government intervention in select sectors (e.g., semiconductors, banking) can sometimes be justified on specific grounds (e.g., national security, financial stability), but history shows that broad protectionism and state direction tend to make economies less, not more, dynamic over time.
This short-term thinking extends to geopolitics. As I wrote last week, most countries are prepared to give the US wins – some pyrrhic, some significant – to avoid open conflict. But these same countries are also working to ensure they’re never in that position again. The EU has finalized trade agreements with Mexico, Indonesia, and the South American trading bloc Mercosur. Brazil is deepening economic ties with Europe, China, and Canada. India is working to stabilize relations with China while accelerating infrastructure projects that reduce its dependence on US markets. Saudi Arabia has signed a nuclear deal with Pakistan to hedge against future security neglect from Washington.
These moves aren’t costless – they require years of political capital, billions in investment, and new institutional architecture. Once built, they’re hard to reverse. But countries have learned the hard way that US policy can change course every election cycle with little in the way of policy continuity or long-term strategic planning, and they’re building alternatives now while accommodating Washington in the short run. Every four years, there’s a 50/50 chance that everything – not just the winners and losers but the rules of the road – shifts. Gone are the days when politics ended at water’s edge. That structural volatility reduces American leverage over time, even as it delivers wins for the world’s largest economy.
So when asking whether the United States will retain its lead over its allies and adversaries, the answer depends on the time horizon. Short-term? Absolutely. America remains by far the world’s most powerful country, so there’s a lot of room for damage before structural decline sets in. Moreover, artificial intelligence is about to change everything, and the US is one of only two games in town (China being the other) and still the preferred partner for most of the West and parts of the Global South.
But long term, the trajectory is troubling. The historical advantages the United States enjoyed over its peers – better physical and institutional infrastructure, superior demographics driven partly by immigration, public tolerance for inequality undergirded by perception of meritocracy, greater capacity for deficit spending – are all heading in the wrong direction, arguably unsustainably so. China, despite being in a weaker overall position, is doing what it can to exploit these shifts. And while Beijing faces severe structural challenges of its own, it benefits from the increasingly accurate perception that it takes the long view while America chases the next election.
Perhaps most worrying is the one thing everyone in a deeply divided America now agrees on: that the country’s biggest threat is domestic. They just disagree on who that threat is. That kind of inward turn ensures the bulk of the national energy and focus will remain on fighting internecine political battles rather than making the deeper, patient investments – in people, institutions, research, and infrastructure – required to keep the United States competitive a generation from now.
America is giving up long-term leadership in exchange for short-term wins. The question isn’t whether the United States will pay for this addiction to immediate gratification. It's only when the bill will come due – and how much it will cost.
President Macron is down but not out
Everybody thinks President Emmanuel Macron is on political life support, but Eurasia Group's Mujtaba Rahman has spent a week in Paris and he thinks Macron has a way out.
I'm standing in front of La Rotonde, which is the restaurant where Emmanuel Macron celebrated his win in 2017. That seems like a really long time ago given the absolute political and fiscal chaos that's engulfed France and Macron's presidency over the course of the last one-plus years. Tomorrow, Emmanuel Macron is going to appoint his fourth prime minister in a year and a bit. And even though we don't know who the identity of that prime minister is, here's why I think it might stick.
Macron came very close to pulling an early election this week. In that focused mind, Macron doesn't want an early election, and really no MPs in Parliament wants an early election, except the far right, because they are France's most popular party and they would win that early election. In combination with the fact Macron is now willing to potentially reverse an increase in the retirement age, there may be enough there for restless MPs to do a deal and put this crisis to bed.
Now, the crisis doesn't just matter for France, it also matters for Europe. France is the Euro area's second-largest economy, it's a G7 country, a nuclear power, and across all the major foreign policy issues of our time, the French have been a leading player. It's about the global role he's playing in the world at a time when the US is withdrawing and there are existential and important questions hanging over the future of Gaza, the future of Ukraine where he has been a leading voice. The outcome of this crisis matters way beyond France's borders. It's also going to have really important implications for the rest of the world.
Spy games and loyalty tests with Senator Mark Warner
It’s been a banner stretch for President Trump: a major strike on Iran’s nuclear sites, a sprawling tax-and-spending bill pushed through Congress, and a growing foreign policy resume. But beneath the surface of all the flag-waving and victory laps, Democrats like Senator Mark Warner are warning that the real story is unfolding in the shadows—inside an increasingly politicized US intelligence community.
In this episode of the GZERO World podcast, Ian Bremmer sits down with the senior Senator from Virginia at his Capitol Hill office for a wide-ranging conversation about what’s breaking inside America’s national security institutions—and what that means for foreign policy decisions from Tehran to Gaza. Warner doesn’t hold back: “We’re in uncharted, dangerous territory. [Intelligence] Analysts are being told to change their conclusions—or lose their jobs.”
The two also dive into the fallout from the US-Israeli strikes on Iran, the fragile push for a Gaza ceasefire, and why Warner sees a largely ignored civil war in Sudan as one of the world’s worst ongoing humanitarian crises—and a rare opportunity for the US to lead.
Subscribe to the GZERO World Podcast on Apple Podcasts, Spotify, Stitcher, or your preferred podcast platform, to receive new episodes as soon as they're publishedMalibu, California, USA: A pickup truck with a President Donald Trump decal and decorated in U.S. Flags drives on Pacific Coast Highway on July 4th in Malibu, California.
Opinion: US in the driver’s seat
Even still, with six months under their belt, US allies and adversaries continue to be confounded by the pace of dynamics coming their way. The influx of volatility is largely treated as an unknown variable to be built into strategic conversations and planning. An imperative to hold space for the “known unknowns” that will require navigation and policy response. The United Kingdom’s 2025 National Security Strategy released in June, for instance, labels this moment “an era of radical uncertainty” with no “stable equilibrium” in sight.
For the US administration, dysregulation is part of the end game. The intention is keeping global stakeholders on their toes, or as the White House calls it, “Keeping America in the Driver’s Seat.”
Security sphere uneasiness
Without a clear sense of what lies ahead, the working global response is to brace for impact, hope the ripples emerging from the US are not directed your way, and when they are, to do the best to ride the waves. In Europe, where the memory of US Vice President JD Vance’s remarks at this year’s Munich Security Conference still brings a shudder, there is a fleeting sense of relief at surviving June’s NATO Summit unscathed. A commitment to invest 5% of annual GDP on core defense requirements and defense- and security-related spending by 2035 feels like a fair price to keep the US engaged. After a decade or so wandering through the wilderness and being chided by successive US presidents about fair dues, European capitals find themselves buoyed by a reenergized NATO alliance.
With the hurdle of the NATO Summit cleared, Europe returns its focus to another summer offensive in Ukraine. Initial optimism that a change in the US administration might provide exit ramps for the war has subsided. Trump’s own promises to bring the war to an end quickly have been frustrated by the realities of an intractable conflict and the limits of relational diplomacy. Amidst an intensifying Russian missile and drone campaign of late, Europe is not sure which messaging from Washington is noise and which is signal. Reporting that the US Defense Department would halt the delivery of air defenses and artillery to Ukraine as part of a stockpile review had a chilling effect. Trump’s subsequent critical comments of Russian President Vladimir Putin at a US Cabinet meeting, alongside plans to sell weapons bound for Ukraine to NATO allies, reduced some of Europe’s anxiety. But each time Europe thinks it is doing a two-step with Trump only to find itself facing radical uncertainty, the known unknowns leave a mark.
A cresting trade tidal wave
Alongside security, the other major wave rippling around the globe this summer is a trade tidal wave. Just under the wire, the Trump administration extended implementation of so-called “reciprocal tariffs” from July 9th to August 1st. According to the White House, the further pause was based on “information and recommendations from senior officials, including information on the status of trade negotiations.” Thus far, a “Liberation Day” target of 90 deals in 90 days has resulted in trade agreements with the UK and Vietnam and a temporary trade truce with China (even as it has imposed new export restrictions on rare earths).
While the Trump team will be privately disappointed by the number of deals achieved to date, it is unlikely to be discouraged. As the world looks to interpret what comes next on trade, global stakeholders would do well to hold firm to a couple of framing principles. The first is that the US administration is ideological on trade, and has positioned these ideals at the center of its current-term ambitions.
The second grounding principle is that the president views himself as dealmaker-in-chief. He prefers to anchor negotiations by naming a price early in the process: in this case the Liberation Day reciprocal tariff rates. The anchoring position may not be where negotiations land, but it has the effect of shifting perspectives and forcing behavioral change. Europe’s 2025 NATO defensive spend commitments provide Trump with proof that this approach (plus patience) works. Likewise, Canadian Prime Minister Mark Carney’s rescission of a digital services tax (DST), disfavored by the US administration, is another data point for Trump’s negotiating strategy. Canada, for its part, is being repaid for its cooperation with a renewed threat of 35% tariffs on US imports.
Given all its levers of power, the US administration has taken to a tariff-letter-writing campaign. South Korea, Brazil, Philippines, Malaysia and a dozen or so others have been the recipients of letters notifying them of US willingness to continue its trading relationship but on new terms. What gets overlooked by too narrow a focus on the latest trade threats, and viral memes suggesting “Trump always chickens out,” is that against the wider perspective the US administration has already succeeded. Whether Brazil is hit with 50% tariffs over Trump’s displeasure with former Brazilian President Jair Bolsonaro’s legal investigations, whether Japan’s government falls over the precariousness that the threatened 25% tariffs have wrought, whether copper imports face 50% duties now and pharmaceuticals 200% in a year’s time or not; trade is at the top of everyone’s priorities.
The Trump administration has set a target of a new Golden Age for the American people. Through adopting an elusive approach to security expectations and defensive support, unsettling the global trade infrastructure, exporting risk, the president makes clear the US will be driving the agenda. Everyone else is sitting in the passenger seat.
Iran was the clear loser of its war with Israel and the US. So, what happens next?
Less than a month after Iran’s stunning defeat in a brief but consequential war with Israel and the United States, Prime Minister Benjamin Netanyahu has emerged politically stronger—at least for now. But as New York Times columnist Thomas Friedman notes to Ian in the latest episode of GZERO World, that boost may be short-lived unless Bibi finds a credible way to resolve the crisis in Gaza. “The people who won this war for Israel...were, for the most part, the very same people who were in the streets of Israel for nine months against Netanyahu and his judicial coup,” he says. That internal contradiction, he argues, is likely to reassert itself as the conflict continues.
Friedman warns that Netanyahu still faces the same three unappealing choices in Gaza: permanent occupation, rule by local warlords, or a phased withdrawal in partnership with an Arab-led peacekeeping force and the Palestinian Authority. If he were to choose door number three, then Bibi would win the next five elections, Friedman says. But doing so would likely require pressure from Washington. With Trump now touting his foreign policy win in Iran, Friedman believes the moment is ripe for the US to push hard for a ceasefire in Gaza.
The conversation also explores the uncertain road ahead for Iran’s leadership. In the wake of military humiliation, Friedman anticipates an internal debate over whether to double down on nuclear ambitions or seek reintegration into the international community. “All real politics in the Middle East happens the morning after the morning after,” he says. As both Israel and Iran attempt to move forward, Friedman suggests the real reckoning—for governments, publics, and the global order—may just be beginning.
GZERO World with Ian Bremmer, the award-winning weekly global affairs series, airs nationwide on US public television stations (check local listings).
New digital episodes of GZERO World are released every Monday on YouTube. Don't miss an episode: subscribe to GZERO's YouTube channel and turn on notifications (🔔).
Iran's retaliation shows strategic weakness
In his latest Quick Take, Ian Bremmer unpacks Iran’s carefully calibrated retaliation against the United States after a major American strike on its nuclear program. Tehran launched missiles at a massive US base in Qatar, but warned Washington ahead of time, resulting in no casualties.
“It shows incredible weakness on the part of the Iranian government,” Ian notes, emphasizing the Islamic Republic’s desire to avoid provoking further US escalation.
Ian calls the moment “the biggest foreign policy win for President Trump” so far in his second term, as Iran appears increasingly isolated and risk averse. He also highlights how the regime's top leadership is in hiding, further hampering its ability to coordinate or negotiate.
While the immediate threat of escalation has eased, Ian still warns that “rogue actors” within Iran’s military still pose a risk. For now, though, oil prices are down and the region is holding its breath.
US President Donald Trump is welcomed by Saudi Crown Prince Mohammed Bin Salman in Riyadh, Saudi Arabia, on May 13, 2025.
Dollar diplomacy: Finance is the focus as Trump heads to the Gulf
In his first diplomatic overseas trip since returning to office, Donald Trump is embarking on a four-day tour through a trio of Gulf states with the goal of bringing home over $1 trillion in deals and investment pledges – and a free $400 million plane for good measure.
The US president will visit Saudi Arabia – his first overseas trip of his debut term was also to Riyadh – as well as Qatar and the United Arab Emirates.
Trump scored an early diplomatic win ahead of his visit when Hamas released Israeli-American hostage Edan Alexander on Monday — a move the paramilitary group framed as a gesture of goodwill toward the president. The release — made without any demands — was aimed at showing the US and Israel that Hamas is serious about pursuing another ceasefire and willing to negotiate, per Jonathan Panikoff, director of the Middle East Security Initiative at the Atlantic Council.
“Hamas clearly believes that the US is the only country — and Trump is probably the only person — with sufficient leverage over Netanyahu to compel him to make a deal,” Panikoff said.
Alexander’s release comes as Israel threatens to escalate its military campaign in Gaza, warning it may move toward full occupation of the strip after Trump’s visit to the region, if no new ceasefire agreement is reached.
White House Press Secretary Karoline Leavitt hinted that the trip would involve peace talks, too, saying that Trump still aims for a “prosperous and successful Middle East” where “extremism is defeated in place of commerce and cultural exchanges.”
But the Gaza War isn’t likely to be high on the agenda for Trump. Despite the Gulf’s support for Palestine, the focus is instead on business.
Saudi Crown Prince Mohammed bin Salman has pledged to invest $600 billion in the US over the next four years, which the Trump administration is trying to push up to $1 trillion. The UAE wants to go a step further, committing $1.4 trillion of investment over the next decade, with the majority of the funds going to AI and energy.
While Qatar has not committed to how much it is planning to invest, they’ve set the tone by readying a $400-million gift to the president in the form of a Boeing 747, raising ethics concerns about the US president accepting such a lavish gift from a foreign government.
The meetings are designed to be symbiotic: Gulf nations are opening their sovereign wealth coffers with the expectation of attracting investment from US tech giants — CEOs including Mark Zuckerberg are among those accompanying Trump on the trip. As these countries push to diversify their economies beyond oil, their decade-long investment promises aim to anchor their economic relevance to the US.
“They want it to be a place where the US thinks of trade with the Gulf countries in the same way that we think of trade with Canada, Germany, or Japan,” says Panikoff.
Hidden figures: Even if these investment pledges reach fruition, the Gulf countries would still have a long way to go until they reach the annual foreign direct investment levels from Japan, Canada, and Germany – the three countries which invest the most in the US. In 2023 alone, Japan ploughed $783.3 billion in the US – mostly in the automobile industry – followed by Canada at $749.6 billion, and Germany at $657.8 billion.
And what about Iran? Like Gaza, this isn’t likely to dominate talks. While Trump’s “maximum pressure” campaign once thrilled Gulf monarchies, they are now more skeptical of US security guarantees and more interested in stabilizing ties with Tehran. If Iran comes up on Trump’s trip, it will be behind closed doors.
“[The Gulf states have] gone largely onto plan B when it comes to Iran,” says Panikoff. “And plan B is détente.”
President Donald Trump and Russian President Vladimir Putin shake hands as they meet in Helsinki, Finland, in July 2018.
Trump embraces Russia, attacks Ukraine
The realignment was announced at a meeting in Saudi Arabia between US Secretary of State Marco Rubio and Russian Foreign Minister Sergey Lavrov, which was initially expected to focus on ending the war in Ukraine but ended up being about improving their diplomatic and economic ties. This would end the isolation that Vladimir Putin’s government has endured since he ordered the invasion of Ukraine three years ago.
The meeting – held without the presence of Ukraine or European countries – was a huge win for Putin. The Americans had already signaled that they accepted his terms for talks on ending the war: No NATO membership for Ukraine, no territorial concessions by the Russians, and no US military presence to enforce the peace.
Even as European leaders were scrambling to respond, Trump cranked up the pressure, denouncing Volodymyr Zelensky as a dictator and blaming him for the war. Zelensky replied that Trump is “living in a disinformation space.” Vance denounced him in turn.
Trump’s friends in the Kremlin say Putin and he may meet this month, at which point their plans may be clearer.
Two GOP senators have spoken against Putin, but Trump’s control over his party looks too strong to turn him, which leaves Ukraine in a desperate position, pleading for European help to either keep fighting or enforce a peace that the Americans force on him.
- Trump's Ukraine peace plan confuses Europe leaders - GZERO Media ›
- Why the US-Ukraine minerals deal changed - GZERO Media ›
- Is the US-Europe alliance permanently damaged? - GZERO Media ›
- A Baltic warning: What Ukraine war means for Europe—and the Russian perspective - GZERO Media ›
- If Trump's foreign policy pushes allies away, can the US go it alone? - GZERO Media ›
- Ukraine ceasefire deal now awaits Putin's response - GZERO Media ›
- Will Trump pressure Putin for a Ukraine ceasefire? - GZERO Media ›
- Russian analyst: Let the US and Russia settle the Ukraine war - GZERO Media ›