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Where the US is gaining and losing influence
Ian Bremmer's Quick Take: Hi everybody, Ian Bremmer here and a happy Monday from Vancouver. I'm here for the TED Conference. I've never done the main TED conference before, believe it or not, but giving a speech tomorrow and so came in a little early to meet some of all of these crazed public intellectuals and see what they have to say about the world. Should be kind of interesting, kind of fun.
But thought I would talk a bit about where US relations are with other countries in the world. I got a question from someone over the weekend that said, "Are there any countries where the United States actually has better relations today than they did ten years ago?" And I think this reflects, this wasn't an anti-Biden or pro-Trump sensibility, it's more the world feels like it's heading in a difficult direction, America losing influence. How do we think about that?
And it's mixed, right? It's mixed. It's very clear that China is much more commercially and economically powerful than it has been at any point in modern times. And it's also more willing to use its diplomatic leadership as well as the consistency of a single president, Xi Jinping, for eleven plus years now and going on however long he's alive. And so that I think makes people, especially that grew up in a time of more consistent global leadership from the United States, more discomforted or more excited, depending on their background. I think that also the United States is more, and we're looking it's some more divided, there are a lot of questions of why the United States would want to be the world's policeman, would try to drive global trade agreements when people inside the United States don't feel it necessarily benefits them. But the outcomes are a little more varied than that story would give you as a headline.
So for example, it is pretty clear that there's a lot of architecture being built by the United States with its allies in Asia. It's true that the US didn't get the Trans-Pacific Partnership done, and that was Obama's alleged pivot to Asia, never really happened. But now when you look at the Quad, you look at AUKUS, you look at the Indo-Pacific Economic Framework and you look at the CHIPS 4. And then you look at all of the alignment of countries that rely on the United States, particularly for national security in Asia and the backlash that you see from a China that is increasingly dominant militarily in some Asian security conflicts and Asian security areas. And as a consequence you have Japan, South Korea, improving their relations with each other and with the United States, you have the Australians much more aligned. You have New Zealand joining AUKUS as a non-NATO nuclear member and much more hawkish towards China than they would've been even two years ago, nevermind ten.
The Philippines pivoting into that direction, Indonesia concerned. So there are some countries that are really dominated by China and Asia. I'm thinking about Laos, Cambodia. But those aren't the countries with geopolitical heft. And for the rest they're more aligned with the United States. In Europe, you'd certainly say that most Europeans are more aligned with the US and yes, you'd probably even say that about France. Now, again, not necessarily Macron-Biden or Macron-Trump, given the personalities of all involved, but the fact that the French have voted along with every other EU country for ten rounds of sanctions against the Russians and to invite Ukraine into the EU and are decoupling their economies from Russia. That is a level of very significant alignment that we weren't seeing over the last five or ten years. And some countries in Europe may not like it, may be discomforted, but they don't necessarily have good alternatives.
And then Mexico and Canada where a level of economic integration, political integration and security integration with the US is just overwhelming. So those are all places where I see the relationship with the US as either as strong or getting stronger, getting more aligned, at least for the present and not really mattering hugely just on leadership, also mattering structurally with what's happening in the world. Then you have the Middle East and you have emerging markets around the world. You have the so-called Global South, and that's where I think the US is really and rapidly getting displaced, particularly in the Middle East where the US is not as focused on fossil fuels from there. And where the security relationship has been more challenged, Congress less interested in allowing the most advanced weapons to go to some of these countries. Some focus on human rights and just less engagement given how much more the Asian and the European environments are just sucking up all the airspace for the US diplomatically.
So there, I think China is displacing the United States in influence and countries in the Middle East are feeling like they need to do everything themselves. In terms of the Global South, also lots of countries that feel a level of hypocrisy from the United States, don't feel aligned, feel that the revealed preferences of US policy are really not supporting what these countries need. Whether it's in response to the pandemic or response to big inflation or response to the Russian invasion. Anything else, climate change, thinking that their relationship with the US is becoming less important. And meanwhile, globalization is less of a benefit for them as Americans focus more on nearshoring and on providing jobs for Americans in the middle and working classes. And this will even speed up with AI developments. Finally, and most dangerously, rogue states, North Korea, Russia, Iran, these are countries that have relations which are not just badly broken with the US but increasingly dangerous.
These are countries willing to be hostile and take risks with their relations with the US and allies. And China, which is not a rogue state, but is a country where there is zero trust between them and the US. And the relationship is at its worst it's been in decades. So if you were to put all of that together and say which world is more stable, definitely not where we are today. Is global power at largely shifting towards the US, away from the US or pari-passu, staying the same? I'd say it's very mixed, but slightly away from the US if you add all of those things up. Still, lots of areas where the Americans have a lot of power, but also a lot of areas where the world and its geopolitical balance is shifting far faster than the Americans and its allies can effectively respond to it.
So that's a little bit of the big picture for me. Seems like the thing one to talk about at TED. We'll do more of that tomorrow and I hope everyone's doing well. Talk to you soon.
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Subsidy game could hurt Canada-US relations
Jon Lieber, head of Eurasia Group's coverage of political and policy developments in Washington, DC shares his perspective on US politics.
What is happening with US/Canada relations?
Well, I'm headed up to Toronto, Canada, just about a week after President Biden made his first trip to America's neighbor to the north, which is also the US' second largest trading partner. A very important, deeply ingrained relationship between these two North American economies. And a major source of tension right now between the US and Canada is over industrial policy. The US over the last several years has started to deeply subsidize infrastructure development, semiconductor manufacturing, and in the Inflation Reduction Act, green energy production, electric vehicles, and the components that go into this.
Now, the automobile industry is obviously a very major component of US/Canada trade and has been that way since the mid '90s when NAFTA was signed. The renegotiated USMCA has created a new set of playing rules for governing US/Canada trade, and there have been several long-standing disputes between the two countries that have not yet been worked out. And now with the introduction of the US' new subsidies, the Inflation Reduction Act is causing major concerns in Canada who are worried about losing green energy investments to the United States where there are tax preferences, loan programs, and other direct form of subsidies in order to get that manufacturing into the US.
Canada last week responded with its own budget, laying out billions of dollars in new subsidies to help compete with the United States and hoping that it can attract some of that investment over the northern border. Canada has several very attractive elements that the US does not have, including lower costs of construction, more flexible immigration policy, allowing them to take in higher skilled labor from around the globe, that is set specifically around set of criteria having to do with how qualified and educated immigrants are. This exists in the US but to a much lesser extent, and now Canada's getting into the subsidy game.
So this could be an ongoing source of tension between the two countries. It means that if you're looking to build a manufacturing plant for green energy or EV, electric vehicles, or for batteries, there's going to be this race to the top that the US is trying to push. Where Canada, the US, the EU, are all looking at different ways they can get these manufacturers into their markets. And going forward, these types of tensions could be an important part of the US/Canada relationship.
Both leaders are incentivized to keep things friendly between the two countries. Canada has a lot to lose if they could cut out of the US market. And from the US perspective, Canada is sort of like a very large state where English is the primary language, there's very little trade barriers, a highly educated workforce that's competitive across many of the same areas that the US economy is, and the US is also deeply incentivized to get along well here with Canada.
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