With Trump, it's all impulse, and he likes to win, and he likes to be on top.

And guess what, when you're the President of the United States, you do have that option of saying, I get to run the world.

[MUSIC] Hello and welcome to GZERO World.

I'm Ian Bremmer, and today we are talking all about the economy, tariffs and globalization, what's left of it, where it's going, and whether America is still leading the charge or walking away entirely.

For decades, the United States set the rules of the global economy, and most of the world followed them.

Free trade, open markets, international cooperation.

But now, Washington is tearing up the economic playbook, levying historic tariffs against allies and adversaries alike.

America's recasting the world as a high stakes, winner take all, zero sum game.

President Trump recently announced a few deals that leave some tariffs in place.

His August 1 deadline has come and gone, and so far, the global economy hasn't crated.

But is this just the calm before a very big storm?

To help us understand the stakes and where the world goes from here, I'm joined by Fareed Zakaria.

Don't worry, I've also got your puppet regime.

>> What is that smell?

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And... [MUSIC] Imagine you designed a board game.

Teach everyone the rules, all your friends start playing, and then mid game, you flip the board.

Accuse everyone of cheating.

You demand new rules that benefit you.

That's what other countries believe the United States is doing right now with global trade.

Since the end of World War II, the US has been the architect of the international economic order.

The Americans wrote the rules.

The Americans built the institutions.

The GATT, WTO, NAFTA, with the United States at the center.

But as Washington takes a wrecking ball to the global trading system, pushing far higher tariffs and rewriting trade agreements, it's no longer playing by the very rules that it created.

President Trump's tariffs are chaotic, confusing, and constantly changing.

America has become the main driver of global economic uncertainty, and is increasingly not seen as a reliable trade partner.

Governments trying to negotiate can find out that the terms have changed overnight.

That's what happened to the European Union in July when Trump announced a new 30% baseline tariff on Truth Social, despite months of talks.

So what can countries do?

They adapt.

They can't trade through Washington.

They'll try to start trading around it and redraw the global trade map.

Brazil has a massive economic relationship with the United States, but with a 50% tariff threat, it's now deepening ties with Mexico, China, and just agreed to nearly double its trade with India.

Canada is strengthening its Asia-Pacific partnerships, and in June, signed a security and defense agreement with the European Union with plans to expand trade cooperation.

We're trying to make sure that ultimately, while the US is becoming weaker, we will become stronger.

The real power play is coming from Europe, pitching itself as the world's steadfast trade partner.

The EU is actively, though very carefully, negotiating with China.

They're reinforcing ties with the United Kingdom, and they're pushing for deeper trade partnerships across Latin America and Asia.

We're living in turbulent times, and when economic uncertainty meets geopolitical volatility, partners like us must come closer together, and you can count on Europe.

Brussels even floated the idea of an EU-led alternative to the WTO by linking up with the 12 economies of the CPTPP, the very trade pact the United States helped design and then abandoned under Trump 1.0.

That's the new map, and it's a seat change.

Yes, America's economy is still the largest in the world, it won't be excluded from global trade, but trade relationships are already changing in ways that will long outlast Trump's presidency.

Global supply chains are, of course, sticky.

Once you build new infrastructure, once you rewrite regulations, you sign multi-year agreements, trade is hard to reroute.

Political trust, once lost, is difficult to rebuild.

And even if America changes course once again when Trump leaves office, the world's new economic order will have steered in a new direction.

The big question, will allies stop at trying to work around the US and actually start working against it?

As America steps back from 80 years of leadership, that's the gamble it's taking.

Is it worth the risk?

To help us understand this new reality, I'm joined by author and journalist Fareed Zakaria.

Fareed Zakaria, welcome to GZERO.

Always a pleasure, Ian.

So first thing I wanted to ask you is, thing that I've, I think I've learned recently is the Chinese seem a lot more powerful now than they did three years ago, five years ago, ten years ago in their willingness and ability to hit the Americans back.

Is that a significant lesson that you think is appropriate right now?

Yeah, I think that's exactly right.

I think a few things have happened.

The first is, the Chinese have, you know, kind of figured out, they've, they've, they've hit their stride a little bit better in international relations.

If you remember, after Xi Jinping comes to power, he starts asserting control over the, the Communist Party.

He starts pushing back against private business.

And then he gets pretty aggressive internationally.

The wolf warrior diplomacy, they called it.

Very tough on India, very tough on Australia.

Starts making nasty anti-American speeches.

And he gets a lot of blowback.

He gets a lot of blowback from the Australians, the Vietnamese, the Indians.

And I think that even though, you know, it's a, it's a one party system and, you know, he's a, he's a dictator, they realized this was not working.

Secondly, the Americans, particularly under Trump, but even under Biden, started getting tougher and tougher on the Chinese.

So, they felt like they had to start finding, you know, ways to, to combat.

And all that, you put that all together, and I think China has now kind of tried, I wouldn't say it's gotten there yet, but it's trying to figure out a way to assert itself against an American policy of soft containment, call it what you will.

And what it involves is much closer alliance with Russia.

Much, much greater degree of independence from American supply chains and American dependence, even if that means lower economic growth abroad.

And finally, new alliances and strengthening of old alliances or relationships in places like Africa and the global south.

That third piece has become much, much easier, because Trump is so alienating so many people.

The big power play is going to be, they are going to try and make have better relations with Europe and, and drive a wedge between the Western alliance.

Is that going to work?

That's what we're going to have to wait and see.

There isn't going to be any marriage between China and Europe, but I think you will see better relations than they've had in the past.

>> What the Chinese now have is a stranglehold of critical minerals, of exploitation, of supply chain.

They've got dominant technology in electric vehicles, in solar, in wind, in nuclear, in a lot of places that the Americans have not been investing a lot for the past decades, that the Europeans have not invested adequately over the past couple decades, the Chinese do have that.

And it seems in response to Trump's willingness to put a de facto trade embargo on them, that they're willing to hit back pretty hard.

Surprising to you?

>> Not surprising.

People have often wondered, this was the weapon they had.

We've known this for a while.

They haven't been willing to use it because they felt like, you know, the Chinese need trade.

They need, they're not Russia.

Russia is a kind of rogue regime that is happy to foment instability.

By the way, it helps them economically because it raises the price of oil and commodities, and that's the Russian economy.

It's basically just, it's a commodities economy.

China is different.

It's integrated into the world system.

It's a manufacturing economy.

It needs trade.

It needs stability.

So we always wondered, well, will they be willing to do this because it'd be disruptive?

Well, the thing about Trump is that he's so disruptive, and he's been so tough on the Chinese.

And as you say, the tariffs are effectively an embargo.

Their feeling is we might as well, I mean, things are getting disrupted anyway, and we gotta protect ourselves.

We gotta have something to fight back on.

What we have come to realize is we cannot have a sole dependence on the Chinese for these kinds of products.

It does not mean we need to make them here.

This is the big mistake I think we're making, which is we have these deep connections with Canada, with Mexico, with Britain, with Europe.

Why don't we use them?

>> Talk about where you think the future of global trade and interdependence is heading.

In ten years' time, do we still talk about an era of globalization, or do you think it's becoming fundamentally different?

>> We are living through an age of backlash.

Backlash to 30 years of globalization, massive technological change, cultural change, and I think we're in that for a while.

I don't think that this is a blip.

I think we are going to see ten years at least of slow-balization, not deglobalization, but a much slower pace and a much more political economy where there are going to be all kinds of tariffs, restrictions, carve-outs.

Now, in some places that will be very, very small inefficiencies.

In other places, they will be very substantial.

The place where they are the most substantial right now is the United States of America.

We are becoming the highest tariff country in the world.

If you look at, look, they're going to vary- >> Going back to 1930s levels.

>> Right, and that is going to be a substantial shift in the world economy.

But, and here's the really interesting thing, Ian.

One of the great strengths America has had is it sets the agenda for the world, and it's really done that since 1945.

And the agenda that the United States has set for seven or eight decades was openness, integration, free markets, democracy, human rights.

And the US is now in a different mode.

Trump couldn't give a damn about human rights.

He's very much a protectionist.

Restrictions on immigration, it's a very different model.

But with a few exceptions like immigration, while the US has gone off on this different model, the rest of the world is not taking America's lead.

It's not following America's example.

It's not following the new narrative put forth by America.

Because when I go to Europe, they say to me, look, we depend on trade.

And if we're not going to be able to have it with America, we'll have to find other places.

When I go to Asia, they say exactly the same thing.

So it's a very interesting moment where the US is pointing in a different direction.

Other countries have to accommodate themselves to the US because it's so powerful, but they're not following that course.

They're trying to freelance on their own and figure out how to make deals.

>> And if I see one of the biggest things that's been a clear negative for geopolitical stability over the past decades, it's the asymmetry in power development between the United States and its allies.

I'd also include Japan and South Korea, but most importantly, Europe.

Like America's been powering ahead and Europe has not.

And I mean, one of these be careful what you wish for moments, but nonetheless, I think a very positive thing is over the course of the next 10, 20 years, you got a Europe that was much more competitive, was much more productive, was spending a lot more in its own defense.

And yes, building up the European defense industries, and those will be competitors to the US.

But at least competitors with rule of law, as opposed to competitors with a Chinese worldview that supports authoritarianism and state capitalism.

How do you think about that?

>> If you look back over the last 30 years and you say, what is the dominant trend in the world economy?

It is what I've called the rise of the rest, right?

The rise of China, of India, but even Indonesia, Brazil.

So if you looked at 35 years ago, the emerging markets were about 5% of the global GDP.

They're now about 40, 45%, depending on how you measure it.

That's the big shift.

But that shift, fascinatingly, did not affect America.

American share of global GDP 30 years ago- >> Didn't change.

>> Was 25%, today it's 25%.

>> 25%, yeah.

>> So where did that growth come from?

>> So there's no American decline.

>> Right.

>> That everybody talks about.

>> So where did that growth come from?

It was Europe and Japan.

Those are the countries that declined in relative terms to allow the Chinas and Indias of the world to rise.

And that has created the circumstance where the US is the only country upholding the liberal international order.

And so as you say- >> Which helps create the backlash that you're talking about.

>> Exactly, and so you're exactly right that if we have a Europe that can be more competitive, more strategic, more defense oriented, if we can have a Japan and a South Korea and an Australia, all those countries can contribute to a world of order because they all share these ideas about a rule based international system, about human rights and things like that.

And that has to be the hope, because what we have discovered is the United States cannot do it alone.

Not because, by the way, we do not have the capacity in hard power.

We probably do, but because it produces a massive political backlash at home.

This is still in its DNA a country that is suspicious of the world, suspicious of why do we have to be involved in the world.

Trump has tapped into that.

>> And that's not new.

>> It's not new at all.

>> It was World War II too.

>> Yeah, I mean Tucker Carlson, Steve Bannon, they represent in a sense the beating heart of MAGA.

And one of the ways to solve that problem is to say, yeah, we're going to shed some of those loads, but they will be taken up by Europe, by Japan, by South Korea, by Australia, not by China and Russia.

>> This is kind of the argument that you'd want the America firsters to make.

If they were strategic, if they were long term, you'd want them to say, no, it's not that we don't care about the rest of the world, but we want our allies to be more competitive.

We want our allies to be stronger, as opposed to we want to divide them and make them weaker and beat them up and win all the time.

No, we want to win together.

That's the way America ultimately is strongest.

That's the way the American worldview wins in the same way that the Soviets were ultimately defeated.

>> So it's a very important point because it outlines two different world views, right?

One is to say this rules based international order that has promoted economic growth, trade, cooperation, the flourishing of human rights.

All that created by the United States after 1945 is a great thing.

We just don't think we should be bearing the burden alone.

And we have part of the genius of the system was it allowed for growth and it allowed a lot of countries to become very rich.

Now they should participate in that collective project of collective hegemony to undergird this system.

But I think at the heart of MAGA, at the heart of this kind of American right wing populism, is a deep rejection of that world, of those values.

And what they want is a world that is much more nationalist, protectionist, in a sense a kind of world of the great power jungle, of realpolitik, where every country hustles for itself.

Nobody is constrained and we are able to do well, well, because we're very powerful.

We want Greenland, we want Panama Canal, we want to annex Canada.

If the Russians want to annex Ukraine, fine, that's their sphere of influence.

If the Chinese want to annex Taiwan, that's their sphere of influence.

And that's, for many people, that kind of throwback to a 19th century realpolitik is the world they think about.

>> I get that.

If you talk about the beating heart of MAGA as if there were some ideological purity, but of course when you talk about Trump, you don't talk about ideological purity, you talk about whatever happens to be on his mind and the deal and the wins that he wants.

And I don't see spheres of influence.

I mean, to me it's about, no, no, no, the Americans are doing what we want and you guys are all going to have to march by our drum.

>> So it's fascinating, right?

You're exactly right.

There's competing impulses.

And the beating, when I say the beating heart, I mean the ideological heart.

That's why I think of Tucker and Bannon and people like that.

But one of the funny things about American hegemony is, even those who have been very critical of it, like Barack Obama, like Donald Trump, very different critiques.

But when they come into the Oval Office, they realize, you know, it's kind of nice to run the world.

It's kind of, and by the way, if we don't do it, it's anarchy.

If we don't do it, it's the Chinese who step in.

If we don't do it, it's the Russians who gain.

So there's a kind of strange default imperialism that takes over the people who enter into these positions.

So the tension, I think, and you saw it with the Iran strikes, is the tendency of the people in Washington running things to say, we want to control, we want to be involved in these great world-shaping military operations, decisions, or call it what you will, versus the people, the beating heart of MAGA, like Tucker Carlson and Steve Bannon, who are totally opposed to the strikes on Iran.

So I think there is going to be that tension.

But I think you're right to say that with Trump, it's all impulse, and he likes to win, and he likes to be on top.

And guess what?

When you're the President of the United States, you do have that option of saying, I get to run the world.

And maybe he's going to be reluctant to give it up.

But I do wonder whether JD Vance would have that same attitude, because he is much closer ideologically to that beating heart of MAGA.

>> So secure the borders, check, he's done a lot on that.

End the wars, he hasn't ended the wars, but certainly he's making an effort to end the wars.

It seems like, going back to the beginning of our conversation, it's the economy stoop that is the place that he's actually having the hardest time.

>> The economy, look, Trump has for 40 years had one consistent, ideologically coherent position.

>> Tariffs.

>> Right, he is a protectionist.

>> Yes.

>> And he is finally, Trump won the Republican establishment, the Paul Ryans and the Gary Cohnes of the world stopped him from doing it.

This time he's unconstrained, he's going to do it.

We'll see the effect, in my view, it's going to have a big effect on the shape of the global economy going forward.

What do I mean by that?

The US was the beating heart of the free trade movement.

The United States was the country that forced all the other countries in the world to open their markets.

It reduced- >> Even China.

>> Even China.

>> To the extent that it happened, yeah.

>> And China is much more open, most people don't realize, China's a much more open economy than India or Brazil.

I mean, and that was because of US pressure.

I think that it moves the world economy in a bad place.

It moves it towards much more political interference, much more corruption.

And in the US, we're going to become, we're less globalized than the rest of the world.

Only 15% of our economy is exposed to trade, 85% is domestic.

But it'll cause inefficiencies, it'll cause, look, why has America been so innovative and so able to kind of be at the frontiers of technology?

It's because we have allowed and invited competition from the world's best.

The American car industry would be a shadow of itself today if we had not let in the Japanese competition in the 70s and 80s.

When we let that competition in, we realized our companies were sclerotic, they were making lemons.

We then shaped up and had to find a way to compete against them.

If you shelter your best companies behind 15, 20% tariff walls, they're just not going to be as competitive.

And that's what I worry, because America's great strength, we don't have the well-functioning state and welfare system and market economies of the northern Europeans.

What we have is we know how to let the economy go gangbusters.

We know how to innovate at the highest level.

And then we have a debate about how much to redistribute and we should be reducing- >> And we have the best universities, we invest in the most research, all of these things.

>> And we have that feedback loop, right?

So it's all directed towards massive innovation.

Take on the best and the brightest.

Find the best and brightest from the world, recruit them, get them to universities, have them start the companies, let them compete at the highest end.

Open competition with the rest of the world.

If we move to something else, I think we lose that edge.

>> Fareed Zakaria, thanks for being on, man.

>> Such a pleasure, Ian.

[MUSIC] >> And now there might be one product hitting the shelves soon that's exempt from global trade barriers, and it smells amazing.

It's time for your puppet regime.

>> What is that smell?

Well, looks like after Donald Trump launched his own signature cologne line, other world leaders are trying to nose in on that business too.

[MUSIC] Keep your enemies close so they know where they stand, right next to open window.

[MUSIC] >> Dronz Sauvage, smells like 19 year old kid flying $400 worth of chaos right into Kremlin.

>> Chanel No 5, for those who want to play the field, a deceptively cheap and comparatively stable alternative.

>> It's like the perfect gift for a fiscal conservative, socially liberal immigrant, but also sort of white nationalist adjacent techno utopian insomniac.

[MUSIC] >> The fragrance for a man who can get away with anything.

>> All right, just to be clear, this is a go brand between the two of us.

>> Puppet regime.

>> That's our show this week, come back next week.

And if you like what you've seen, or even if you don't, you want to levy your own tariffs on China and the EU, we've got you covered.

Check us out, gzeromedia.com.

[MUSIC] >> Funding for GZERO World is provided by our lead sponsor, Prologis.

>> A global partner of the United States, and an end-to-end solutions platform, addressing the critical initiatives of global logistics today.

Learn more at prologis.com.

>> And by Cox Enterprises is proud to support GZERO.

Cox is working to create an impact in areas like sustainable agriculture, clean tech, healthcare, and more.

Cox, a family of businesses.

>> Additional funding provided by Carnegie Corporation of New York, Koo and Patricia Yuen, committed to bridging cultural differences in our communities, and... [MUSIC]