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Speaker 1: Hi everyone, and welcome to Bloomberg Intelligence Talking Transports podcast.

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Speaker 1: I'm your host, Lee Klascau, Senior Freight Transportation Logistics analyst

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Speaker 1: at Bloomberg Intelligence, Bloomberg's in house research arm. Before diving

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Speaker 1: in a little public service announcement, your support is instrumental

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Speaker 1: in bringing guests on the podcast like the one we

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Speaker 1: have today. If you haven't already, please take a moment

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Speaker 1: to follow, rate and share. We appreciate all your support.

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Speaker 1: I'm very excited to have Ian Bremmer, president and founder

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Speaker 1: of eur Asia Group, the leading geopolitical risk advisory firm,

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Speaker 1: and G zero Media, a company providing intelligent and engaging

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Speaker 1: coverage of international affairs, onto the podcast today. Ian is

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Speaker 1: an independent voice on critical issues across the globe. His

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Speaker 1: insights have been valuable for my assessment of global supply

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Speaker 1: chain risks and what it could mean for the companies

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Speaker 1: in my coverage universe. He's a prolific writer. He's the

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Speaker 1: author of eleven books, including the New York Times bestseller

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Speaker 1: US and Them, The Failure of Globalism, The Power of Crisis,

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Speaker 1: How three threats in our response will change the world.

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Speaker 1: He also serves as a repertoire of the un High

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Speaker 1: Level Advisory Board on AI and is the foreign affairs

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Speaker 1: columnist and editor at large for Time Magazine. He's the

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Speaker 1: host of G zero World with Ian Bremmer, a global

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Speaker 1: affairs program that airs weekly on US public television. He

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Speaker 1: earned a master's degree.

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Speaker 2: And a doctorate in political science from Stanford University, where

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Speaker 2: he went on to be the youngest ever National Fellow

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Speaker 2: at the Hoover Institute, and received his undergraduate degree at Tulane.

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Speaker 2: In addition to all this, he currently teaches at Columbia

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Speaker 2: University's School of International and Public Affairs. Ian, thank you

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Speaker 2: so much for joining the podcast, because I know this

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Speaker 2: is a very busy day for you today.

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Speaker 3: Yeah, happy to join. You know, primly just.

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Speaker 1: For folks that really aren't really that familiar with Eurazor Group.

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Speaker 1: Can you just give a quick synopsis of what your

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Speaker 1: firm does.

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Speaker 3: Yeah, we are a political science company. We try to

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Speaker 3: help people, big companies, financial institutions, and also just like consumers,

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Speaker 3: just individual readers understand where the world's heading, how geopolitics function.

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Speaker 3: And there's no political slant to that. It's really our

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Speaker 3: best analysis we've got. I started from a nineteen ninety

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Speaker 3: eight It was just me, there's no outside investment. We've

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Speaker 3: grown it organically over the last twenty six years. We're

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Speaker 3: almost two hundred and fifty people now, but we're still

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Speaker 3: headquartered and based in New York City.

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Speaker 4: Fantastic.

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Speaker 1: So obviously, like I mentioned, a lot going on right now.

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Speaker 1: Over the weekend, iran I attacked Israel. Israel and its

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Speaker 1: allies seem to do a pretty good job of mitigating

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Speaker 1: the damage. So I guess my first question to you,

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Speaker 1: even though this is a supply chain and transport conversation

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Speaker 1: and podcast, where do you see the global threats in

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Speaker 1: the Middle East heading from here?

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Speaker 3: It's obviously relevant to supply chain. We've already seen the

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Speaker 3: Red Sea gets significantly disrupted by the Huthis, which are

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Speaker 3: a knock on attack and escalation from what we've had

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Speaker 3: between Israel and Hamas and Gaza. You've also seen in

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Speaker 3: the last several days the Iranians board in Israeli linked

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Speaker 3: ship outside of the Straits of Hormuz. So this is

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Speaker 3: all I mean. This is a critical waterways for global

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Speaker 3: supply chain that are becoming disrupted by geopolitics, and that's

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Speaker 3: making it harder to get your goods. It's a pushing

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Speaker 3: up price of oil a little bit, But I mean,

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Speaker 3: what's going to happen broadly. Look, I think for the

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Speaker 3: last week we were in an escalatory cycle because the

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Speaker 3: Israelis made a pretty spectacular hit in Damascus against an

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Speaker 3: Iranian government building, taking out Iran's top military leader in Syria,

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Speaker 3: Iranian citizen right, and the Iranians responded with three hundred

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Speaker 3: drones and missiles against Israel over the weekend. That never

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Speaker 3: happened before. Now that's a very big deal, and it

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Speaker 3: could presage war between Israel and Iran. It's not going

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Speaker 3: to in the near term in the near term, and

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Speaker 3: the reason it's not going to is because the Iranians

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Speaker 3: are trying to do two different things, and they're trying

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Speaker 3: very hard to do those two things. They're trying to

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Speaker 3: have a spectacular military strike that shows that they're not

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Speaker 3: going to sit down when the Israelis whack one of

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Speaker 3: their top leaders, but they're also trying very hard to

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Speaker 3: avoid further escalation. And for that, they gave the Americans

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Speaker 3: a heads up on what they were going to do

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Speaker 3: and when they were going to do it, and they

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Speaker 3: did that days in advance of the strikes through and

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Speaker 3: they tipped their hand to the Iraqis and to the Turks,

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Speaker 3: just like the Americans did after the Iranian proxy killing

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Speaker 3: of three servicemen and women in Jordan back at the

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Speaker 3: end of January. And what that meant is that the

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Speaker 3: Americans had time to diplomatically get their ducks in a row,

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Speaker 3: publicly promise ironclad support for Israeli defense, send the head

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Speaker 3: of Scentcom to Israel to help coordinate the defensive response,

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Speaker 3: get you know, the ships and the aircraft you know,

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Speaker 3: in place. And even the fact that the Iranians sent

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Speaker 3: slow moving drones ahead of the ballistic missiles meant that

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Speaker 3: there were hours of awareness that these attacks were in coming,

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Speaker 3: so that the Israelis were able to get into their

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Speaker 3: bomb shelters. So it was very, very unlikely that you're

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Speaker 3: going to have large scale casualties on the back of

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Speaker 3: these strikes. Now, it turned out that the Israelis, with

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Speaker 3: help from the US and others, were able to knock

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Speaker 3: ninety nine plus percent of all of these missiles out

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Speaker 3: of the sky. And that's a big deal. But so

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Speaker 3: all of that, what all that means is that the

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Speaker 3: United States is you know, in telling the Israelis, we

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Speaker 3: really don't want you to retaliate in a big way

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Speaker 3: against Iran. That doesn't mean the Israelis will do nothing.

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Speaker 3: But with the Americans having just helped to save the

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Speaker 3: Israelis bacon and I guess that's a non kosher thing

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Speaker 3: for me to say, you know, it does mean that

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Speaker 3: the Israelis should be paying some attention to what the

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Speaker 3: Americans have to say here. So I think we are

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Speaker 3: now in a de escalatory cycle. But the that's that's

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Speaker 3: in the near term. If you look at this broader term,

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Speaker 3: we're talking about a war that is getting worse, a

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Speaker 3: war in the region that's getting worse. You've had, You've had,

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Speaker 3: you know, sort of small periods of escalation and de

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Speaker 3: escalation along a broader pathway of an increasingly dangerous Middle

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Speaker 3: East war. It is not getting better. It is not

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Speaker 3: getting better at.

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Speaker 1: All, right, And so you think that, I guess your

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Speaker 1: view is that Israel is probably not going to do much.

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Speaker 1: And when you say in the near turb off, you're

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Speaker 1: talking the next weeks, next, in the next days, it's okay.

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Speaker 3: In response to this set of Iranian strikes, I think

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Speaker 3: the Israelis will do something significantly more restrained than the

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Speaker 3: strikes in Damascus against the Iranian military leader. In other words,

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Speaker 3: I see that as a de escalation by Israel. But

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Speaker 3: longer term, the Iranians have put the Israelis on notice,

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Speaker 3: you take out our guys in the region, We're gonna

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Speaker 3: hit you hard and we won't give you the same

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Speaker 3: heads up the way we did this time. Well, I

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Speaker 3: don't think that Iran is going to stop with their

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Speaker 3: proxy strikes in the region. I don't think they're going

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Speaker 3: to stop with the intelligence support, with the military support.

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Speaker 3: And these are terrorist organizations that do not believe Israel

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Speaker 3: has a right to exist, and I don't believe that

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Speaker 3: Israel is going to stop targeting Iranians in these countries

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Speaker 3: working with these people. So it's not like we've suddenly

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Speaker 3: managed to create deterrence where it hasn't existed before. This

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Speaker 3: is dangerous. Furthermore, the Israeli Prime ministers stronger today than

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Speaker 3: he was two days ago. Why because he's just managed

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Speaker 3: a spectacular defense of his country. And remember the legacy

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Speaker 3: that he was living with over the last six months.

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Speaker 3: Is failing to do that on October seventh, you know,

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Speaker 3: not paying attention, not using the best border defense in

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Speaker 3: the world to stop himas instead having them focused on

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Speaker 3: the occupied territory in the West Bank where they've been

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Speaker 3: taking more land illegally. So this is the guy looks

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Speaker 3: like a failure. Suddenly he's got a huge success under

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Speaker 3: his belt, a historic success under his belt, and that

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Speaker 3: means he's probably going to be there for longer, which

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Speaker 3: is not what Biden wants at all. So Biden, Biden,

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Speaker 3: you know, he's managed this well for the last week,

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Speaker 3: but he's in a horrible position as we look more

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Speaker 3: broadly at the election.

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Speaker 1: Right and you don't think that now who's far right

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Speaker 1: coalition is will pressure him to do something sooner rather

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Speaker 1: than of course they will.

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Speaker 3: Of course they will, but they're not in the war cabinet,

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Speaker 3: and the war cabinet has sovereign decision making over this issue. Look,

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Speaker 3: I mean, if you are Smotrich or Ben Gevier, the

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Speaker 3: two sort of serious proud boy type Israeli hawks, I

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Speaker 3: mean they're almost fascist on the right right. These are

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Speaker 3: people that believe from the river to the sea like Hamastas,

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Speaker 3: just they believe it applies to Jews as opposed to Palestinians.

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Speaker 3: But they're basically the same right Now, their view would be.

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Speaker 3: The Iranians have just given us a golden opportunity to

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Speaker 3: blow them up. They just sent all of these missiles

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Speaker 3: at us. We knocked them all out of the sky.

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Speaker 3: We've got the Americans, the Germans, the French, the Jordanians

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Speaker 3: all providing support. Like take that, Let's go and hit

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Speaker 3: them hard. Hit their military, hit their nuclear program, hit

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Speaker 3: their leadership. And by the way, they're led by an

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Speaker 3: eighty four year old supreme leader who we believe has

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Speaker 3: serious prostate cancer, and they have lots of instability in

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Speaker 3: the country. We hit them hard, maybe we can get

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Speaker 3: rid of the regime that that is what Smotrich and

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Speaker 3: Ben Givie are pushing, not in Yahoo to do. But

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Speaker 3: he has no power to do it, not by himself.

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Speaker 3: He doesn't And that's a good thing.

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Speaker 4: Okay.

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Speaker 1: And so you know, you mentioned the Houthi's earlier and

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Speaker 1: a lot of their their activities in the Red Sea

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Speaker 1: have been driven by Israel's war with Hamas.

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Speaker 4: Where do you how do you see that playing out?

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Speaker 1: You know, because when this started again, I'm not a

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Speaker 1: geopolitical expert, I was like, ah, this will be like

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Speaker 1: a four or five month thing. But it seems like

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Speaker 1: we're going well past that. How long is this going

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Speaker 1: to play out? You know, so the Red Sea can

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Speaker 1: get back to normal, so the Suez Canal can go

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Speaker 1: back to normal, so trade can go back to normal.

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Speaker 3: I think as long as the war in Gaza is

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Speaker 3: going on and a minimum, you're going to continue to

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Speaker 3: see hoothy strikes against shipping and also strikes against American

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Speaker 3: and UK vessels that are going to warships. And so

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Speaker 3: far those have been repulsed. But military leaders tell me

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Speaker 3: that there's a fair amount of luck in that, and

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Speaker 3: that you know, you could easily see some of these

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Speaker 3: missiles get through, probably wouldn't sink a ship, but could

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Speaker 3: lead to casualties. And that would also be a problem

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Speaker 3: because it brings the Americans farther in. So this is dangerous.

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Speaker 3: But I don't see any proximate end to the war

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Speaker 3: in Gaza. I mean the Israelis, and here I'm not

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Speaker 3: talking about the Prime Minister. I'm talking about the entire

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Speaker 3: Israeli population strongly supports the war in Gaza, strongly supports

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Speaker 3: wiping out hamas their leadership, and there's some thirty to

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Speaker 3: forty thousand fighters, and they believe overwhelmingly that the civilian

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Speaker 3: casualties are worth it. They blame Hamas for the civilian casualties.

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Speaker 3: They blame them for October seventh. Of course, they also

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Speaker 3: blame them for operating in the middle of civilian areas

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Speaker 3: and essentially using them as human shields. But they even

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Speaker 3: to the extent that the Israeli are engaging in lots

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Speaker 3: of attacks that are taking inadequate care to try to

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Speaker 3: limit the amount of damage to Palestinian civilians. Israeli support

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Speaker 3: that war overwhelmingly, so I don't see any circumstance where

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Speaker 3: the war is over anytime soon, and that means you're

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Speaker 3: going to continue to have those disruptions in the supply chain.

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Speaker 1: And when you focus on the Huthis, are you surprised

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Speaker 1: that China hasn't kind of put a little pressure on them,

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Speaker 1: because obviously their ships are getting through the Suez Canal

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Speaker 1: right now, but it is impacting trade, It is impacting

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Speaker 1: their businesses. So are you are you surprised or you

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Speaker 1: think they're happy to see what's going on.

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Speaker 3: No, I don't think the Chinese are happy. I think

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Speaker 3: the Chinese would like to see a cease fire. And

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Speaker 3: they've also said that in response to the most recent

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Speaker 3: blow up between Iran and Israel. But it's not like

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Speaker 3: the Chinese have a lot of military slash geopolitical influence

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Speaker 3: on the ground in the region. They have serviceable relations

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Speaker 3: with the Iranians, the Saudis, and the UAE, and they're

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Speaker 3: major commercial clients customers of those countries, particularly when we

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Speaker 3: talk about oil export, much more than the United States.

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Speaker 3: But the Chinese don't have military bases in the region,

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Speaker 3: with the exception of Jibouti. That's it, and their ability

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Speaker 3: to bring peace to the region just isn't there now.

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Speaker 3: The Houthis have told the Chinese that they will not

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Speaker 3: target Chinese ships going through But the Chinese are affected

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Speaker 3: by a change in global prices of commodities manufactured goods

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Speaker 3: just like everyone else, and their economy is not doing

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Speaker 3: very well right now. So you're right, they're unhappy about it,

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Speaker 3: but they're just not in a position to do very

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Speaker 3: much about it.

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Speaker 1: Right And what would guess there's some Chinese cargo on

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Speaker 1: that lightership that was just hijack the other waver in

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Speaker 1: that region. Are you surprised that the global there's not

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Speaker 1: more of a global coalition going against the Houthis? Because

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Speaker 1: it's been so disruptive to global trade.

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Speaker 3: I think that the there's a lot of support for

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Speaker 3: the United States to attack the Houthis and limit that that.

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Speaker 3: That's been a lot of Europeans, and it's been some

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Speaker 3: support from the region. You've seen that on the shipping

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Speaker 3: and logistics side. And when the Americans did the significant

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Speaker 3: attacks in February against the Houthis where they degraded about

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Speaker 3: thirty percent of Hothy's known military capabilities, there was a

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Speaker 3: fair amount of support across NATO and a little more broadly.

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Speaker 3: But I mean the Americans aren't prepared to put troops

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Speaker 3: on the ground to fight the Huthis in Yemen. They're

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Speaker 3: not prepared to like physically end the civil war, which

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Speaker 3: by the way, I think would be welcomed by the

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Speaker 3: Saudis and the UAE, but the US has no appetite

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Speaker 3: for it and so absent that I think there's limits

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Speaker 3: to how far the countries in the region want to

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Speaker 3: like staple themselves to the United States. Frankly, and how much.

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Speaker 1: In control are the Houthis in Yemen.

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Speaker 3: I mean, they control their territory and they're continuing to

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Speaker 3: act in ways that are meant not just to get

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Speaker 3: them more support from Iran, but also to gain more

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Speaker 3: support from the Yemeni population. And you have seen, I'm

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Speaker 3: sure there's been major resistance demonstrations with large numbers tens

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Speaker 3: of thousands of Yemeny's turning out in favor of the Houthis,

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Speaker 3: and certainly, in an eventual resolution of that civil war,

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Speaker 3: they are now in a stronger position to get an

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Speaker 3: outcome that is favorable to them because of what they've

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Speaker 3: been doing in in the region, because of what they've

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Speaker 3: done in the Red Sea.

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Speaker 1: Gotcha, Okay, I mean we could talk about the Middle

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Speaker 1: East for quite some time, but you know, I only

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Speaker 1: have few for a limited amount of time. So let's

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Speaker 1: shift gears to China and the China Sea. You know,

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Speaker 1: that's obviously a huge artery for commerce, and there seems

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Speaker 1: to be more and more activity going on there. Can

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Speaker 1: you talk about, you know, how you see China kind

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Speaker 1: of saying, you know, this is our territory, not your territory.

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Speaker 1: How that's going to play out with the other people

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Speaker 1: that are living there.

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Speaker 3: Well, I mean, if you were to show anyone the

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Speaker 3: nine dash line, which has the extent of the territorial

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Speaker 3: ambitions that the Chinese presently recognized as belonging to mainland China,

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Speaker 3: you would see why it would be seen as farcical

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Speaker 3: by other countries in the region. I mean, it extends

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Speaker 3: basically right up to their territories, and of course, in

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Speaker 3: international tribunals, the Chinese claims have been rejected and the

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Speaker 3: Chinese refused to accept the outcomes of these international tribunals.

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Speaker 3: And the Chinese perspective is increasingly, well, we've got the

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Speaker 3: military and we have the dominant trade relations with these countries,

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Speaker 3: so we're gonna squeeze them, and we're gonna squeeze them bilaterally.

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Speaker 3: But these countries are increasingly working more close with the

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Speaker 3: United States and with others in the region to try

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Speaker 3: to resist that. And that's been particularly true for the Philippines,

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Speaker 3: where you've had a change in government in the last

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Speaker 3: couple of years from Rodrigo du Terte, who himself was

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Speaker 3: much more pro Beijing economically and was more willing to

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Speaker 3: push back against his own generals, to cozy up to

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Speaker 3: the Chinese and not to counter them assertively in the

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Speaker 3: South China Sea. Now you've got Marcos who has offered

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Speaker 3: five plus new pieces of territory for the Americans to

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Speaker 3: use his military bases and actively wants a stronger tilt

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Speaker 3: to the United States, very aligned with his military and

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Speaker 3: in particular, there is a fight over the second Thomas Schultz,

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Speaker 3: which is this contested piece of territory where the Philippines

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Speaker 3: has grounded this ship which is falling apart and they

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Speaker 3: are trying to continue to bolster it to help them

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Speaker 3: defend their claims of sovereignty over this territory and water

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Speaker 3: and the air dropped some equipment in to help them

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Speaker 3: shore it up. The Chinese were surprised by that it

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Speaker 3: got through. They're not gonna let them do it again.

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Speaker 3: There have now been a number of military incidents to

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Speaker 3: where the Chinese have blocked ships getting in Philippine warships.

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Speaker 3: One most recently that led to a number of Philippines

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Speaker 3: sailors being injured. No one killed, but actually significantly injured.

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Speaker 3: And I mean it's a pretty big deal. The Philippines

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Speaker 3: has a alliance with the United States, and if anyone

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Speaker 3: is killed, I think they're going to ask the Americans

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Speaker 3: to escort their warships, and the Americans will probably say yes,

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Speaker 3: which means that you have the potential for the US

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Speaker 3: and the Chinese to be directly facing off against each

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Speaker 3: other militarily over this second Thomashchol. This is actually a

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Speaker 3: much more dangerous environment in the near term than Taiwan.

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Speaker 3: It's probably the biggest area of concern between the countries,

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Speaker 3: two militaries, and as you say, very relevant for global

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Speaker 3: supply chain.

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Speaker 1: And you know you mentioned Taiwan. So why do you

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Speaker 1: see Taiwan playing second fiddle to you know, the South

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Speaker 1: China Sea situation.

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Speaker 3: Well, one, because both countries, the US and China understand

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Speaker 3: each other's red lines to a much greater degree. This

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Speaker 3: has been an area of conflict for fifty years. They've

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Speaker 3: been talking about it, wargaming it for a long time.

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Speaker 3: And so it's much easier to finally calibrate escalation and

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Speaker 3: de escalations in response to a change in the environment

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Speaker 3: on Taiwan and have both sides know exactly what the

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Speaker 3: message is that's being delivered. That is hard to do

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Speaker 3: over the second time in the Philippines. Secondly, the Americans

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Speaker 3: and the Japanese have been working hard to try to

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Speaker 3: communicate with engage with the incoming president who's going to

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Speaker 3: be inaugurated in the coming month, President Lee to try

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Speaker 3: to help ensure that he doesn't change the status quo

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Speaker 3: in ways that would upset the US China relationship over Taiwan.

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Speaker 3: So I think there's both a lot more effort and

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Speaker 3: also there's a lot more understanding of the nature of

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Speaker 3: the status quo and how it might change in dangerous ways.

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Speaker 3: That's not true in the South China.

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Speaker 1: See Okay and outside and in the South China see

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Speaker 1: you know you mentioned the Philippines. Are there any other

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Speaker 1: countries where China have gone head to head with or

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Speaker 1: there's increased friction.

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Speaker 3: Well, sure, I mean there's been increased friction all over

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Speaker 3: the place. We saw some in the Baltic States where

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Speaker 3: the Chinese pushed back on some of the tariffs and exports.

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Speaker 3: We saw that in the Nordics. We've seen it with

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Speaker 3: Australia with the restriction of export of spiny lobster and shuras.

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Speaker 3: They've recently actually brought that back and there was a

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Speaker 3: bilaterals between the two countries that have helped soften it. So,

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Speaker 3: I mean a lot of places with the West where

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Speaker 3: the Chinese are unhappy either with political or economic decisions

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Speaker 3: that are being made, and the Chinese have been willing

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Speaker 3: to hit back, but in an environment where the Chinese

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Speaker 3: are not doing well geopolitically in their backyard and their

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Speaker 3: economy is sputtering, They've tried to engage in a more

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Speaker 3: constructive way. They've had a charm offensive, They've been more

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Speaker 3: proactive with repeated high level diplomatic engagement, and just generally

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Speaker 3: more willing to try to find ways to stabilize put

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Speaker 3: a floor under what have been challenging relations In many

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Speaker 3: of these cases.

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Speaker 1: I probably prefer chardonay with my spiny lobster, so that's

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Speaker 1: fair enough.

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Speaker 3: It's probably right, but you know, you don't have to

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Speaker 3: have them, you know. Concurrently that is true.

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Speaker 4: So where does Australia fit in this.

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Speaker 3: Well, I mean in a relationship with aucus, with leaders

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Speaker 3: that are constantly traveling to be a part of the

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Speaker 3: NATO alliance, so I mean coordinated the Five Eyes relationship.

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Speaker 3: You're seeing more willingness to engage in joint military exercises

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Speaker 3: with the US and other countries in the region spending

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Speaker 3: more on their military as well. I mean, this is

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Speaker 3: a strong ally of the United States, which is deeply

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Speaker 3: concerned about a competitive and to some degrees hostile China

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Speaker 3: becoming the dominant economy in Asia.

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Speaker 1: All right, So if we hop on a plan and

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Speaker 1: go to Venezuela now and the conflict that they're having

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Speaker 1: with Guyana over a region where.

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Speaker 4: There's a lot of oil.

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Speaker 1: The Esquibo probably mispronouncing that, yeah, you know, off off

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Speaker 1: their coast.

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Speaker 4: Yeah, where how do you see that playing off?

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Speaker 1: Like?

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Speaker 4: Is the US gonna get involved there?

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Speaker 1: Because it seems like Venezuela is doing a lot of

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Speaker 1: saber rattling.

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Speaker 3: Yeah, I think it's completely overstated. They they don't have

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Speaker 3: the military capabilities to change the status quo there. The

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Speaker 3: UK actually sent uh I think it was a free

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Speaker 3: gate through in a show of force to support Guyana.

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Speaker 3: It is a massive investment that the Venezuelans held a

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Speaker 3: referendum in claiming the territory for itself. It of course

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Speaker 3: passed overwhelmingly in an authoritarian Venezuela, but almost nobody turned

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Speaker 3: up to vote, which was an embarrassment for Maduro. I

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Speaker 3: mean it's you can't really attack Guyana by land because

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Speaker 3: it's incredibly inhospitable territory and by sea. The Venezuelans just

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Speaker 3: don't have the military throw power. So I mean here

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Speaker 3: this is it's this is completely political posturing by Maduro.

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Speaker 3: On the ground domestically in Venezuela, there is almost nothing

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Speaker 3: to be seen.

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Speaker 4: Here, gotcha. That's interesting.

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Speaker 1: So, you know, in terms of geopolitical risks, one ongoing

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Speaker 1: risks for the longest time have been Russia's.

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Speaker 4: War with Ukraine.

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Speaker 1: Yeah, you know, that's impacted obviously a lot of commodities

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Speaker 1: going in and out of that region.

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Speaker 4: How do you see this playing out? Is this ever

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Speaker 4: going to end?

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Speaker 3: We now see that the Ukrainians are engaging in drone

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Speaker 3: strikes deep into Russian territory, targeting Russian refineries. About five

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Speaker 3: percent of Russian export of oil is presently off the market,

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Speaker 3: in part because of that. They haven't yet targeted the

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Speaker 3: major refineries and related facilities on the Black Sea, but

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Speaker 3: they could. This is reflects a level of desperation on

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Speaker 3: the part of the Ukrainians, who are running out of

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Speaker 3: men and also running out of artillery and ammunition. So

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Speaker 3: they're having a hard time maintaining their front lines, which

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Speaker 3: makes them more will to do anything they can to

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Speaker 3: show that they can still hurt the Russians. The Russians,

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Speaker 3: in return, just recently took out the major electricity facility

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Speaker 3: for a Kiev in the surrounding region, so it's getting worse.

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Speaker 3: And of course the Ukrainians have also destroyed about a

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Speaker 3: third of the Russian black sea fleet, which is good

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Speaker 3: for Ukraine because it allows them to get food and

436
00:25:20,000 --> 00:25:23,560
Speaker 3: fertilizer out of their own ports, which is good for

437
00:25:23,840 --> 00:25:26,760
Speaker 3: the world in terms of prices of those commodities, but

438
00:25:26,920 --> 00:25:29,240
Speaker 3: makes the Russians more willing to hit them hard. So

439
00:25:29,600 --> 00:25:31,520
Speaker 3: I mean, all of this is to say that this

440
00:25:31,640 --> 00:25:35,320
Speaker 3: is it's not a stalemate, it's the territory of the

441
00:25:35,320 --> 00:25:38,320
Speaker 3: front lines hasn't changed much over the last year. But

442
00:25:38,640 --> 00:25:41,800
Speaker 3: no guarantees that's going to continue. No willingness of Putin

443
00:25:41,880 --> 00:25:45,840
Speaker 3: to engage in diplomacy at least until after US elections

444
00:25:45,840 --> 00:25:49,040
Speaker 3: hoping for Trump. No willingness of the Ukrainians to accept

445
00:25:49,040 --> 00:25:52,280
Speaker 3: a partition the illegal seizure of some of their land

446
00:25:52,320 --> 00:25:54,720
Speaker 3: by Russia, which is the minimum table stakes that Putin

447
00:25:54,760 --> 00:25:57,480
Speaker 3: would accept to end this war. As long as that continues,

448
00:25:57,480 --> 00:25:58,680
Speaker 3: it's hard to see this getting better.

449
00:25:59,359 --> 00:26:03,119
Speaker 1: All right, You mentioned Trump, so let's talk about US elections.

450
00:26:04,000 --> 00:26:07,560
Speaker 1: You know, what kind of risks do you see with

451
00:26:07,680 --> 00:26:11,399
Speaker 1: a change of administration in the United States as it

452
00:26:11,440 --> 00:26:14,760
Speaker 1: relates to trade, because Trump has been very obviously vocal

453
00:26:14,760 --> 00:26:19,600
Speaker 1: about tariffs. You know, how do you see those risks

454
00:26:19,640 --> 00:26:23,440
Speaker 1: coming in from from an international perspective in a Trump

455
00:26:23,600 --> 00:26:25,720
Speaker 1: second administration.

456
00:26:25,840 --> 00:26:29,920
Speaker 3: Well, countries that run a large surplus against the United States,

457
00:26:30,440 --> 00:26:33,240
Speaker 3: Trump sees that as a problem and wants to use

458
00:26:34,200 --> 00:26:38,560
Speaker 3: US economic power and weaponize it against them. And you know,

459
00:26:38,560 --> 00:26:41,600
Speaker 3: if you're a country like South Korea where the surplus

460
00:26:41,600 --> 00:26:44,760
Speaker 3: has widened out significantly over the last three years, they're worried,

461
00:26:45,640 --> 00:26:48,600
Speaker 3: and Trump's gonna hit him hard, and he's gonna threaten tariffs,

462
00:26:48,760 --> 00:26:51,240
Speaker 3: and he'll threaten a rip up course the trade agreement,

463
00:26:52,040 --> 00:26:54,080
Speaker 3: and he'll also say I'm gonna pull my troops out

464
00:26:54,119 --> 00:26:55,879
Speaker 3: unless you spend a lot more money. So that's going

465
00:26:55,920 --> 00:27:00,199
Speaker 3: to be a hard negotiation. The Japanese less so, in

466
00:27:00,240 --> 00:27:02,080
Speaker 3: part because they're spending a lot more in defense than

467
00:27:02,080 --> 00:27:05,080
Speaker 3: they were last time around, in part because they understand

468
00:27:05,080 --> 00:27:06,359
Speaker 3: that if Trump comes in that's going to be a

469
00:27:06,359 --> 00:27:09,560
Speaker 3: problem for them. Also because their deficit is their surplus

470
00:27:09,600 --> 00:27:13,280
Speaker 3: is smaller than South Korea's. Then you've got China, where

471
00:27:13,320 --> 00:27:16,800
Speaker 3: Trump has said and so has Robert Leitthheiser, who is

472
00:27:17,119 --> 00:27:19,840
Speaker 3: probably odds on favor to be Treasury Secretary in a

473
00:27:19,880 --> 00:27:22,560
Speaker 3: second Trump administration if he wins. That He wants to

474
00:27:22,600 --> 00:27:26,199
Speaker 3: see an end of the permanent normalized trade status with

475
00:27:26,800 --> 00:27:29,960
Speaker 3: China and also wants to see sixty percent tariffs across

476
00:27:30,000 --> 00:27:32,760
Speaker 3: the board on Chinese exports. The United States also wants

477
00:27:32,800 --> 00:27:37,119
Speaker 3: to squeeze third party countries like Mexico Indonesia, where the

478
00:27:37,200 --> 00:27:40,359
Speaker 3: Chinese are putting a lot of investment into companies and

479
00:27:40,520 --> 00:27:42,800
Speaker 3: using them as conduits for Chinese goods to get into

480
00:27:42,840 --> 00:27:46,880
Speaker 3: the United States. Obviously, all of this is very disruptive

481
00:27:47,600 --> 00:27:51,880
Speaker 3: for trade, it's disruptive for globalization. It will cost American consumers.

482
00:27:52,840 --> 00:27:56,320
Speaker 3: The Trump perspective is, we don't care. We want those

483
00:27:56,520 --> 00:28:00,040
Speaker 3: jobs in the United States and if this is a

484
00:28:00,080 --> 00:28:04,680
Speaker 3: near term hit two Americans, we would rather Americans have

485
00:28:05,080 --> 00:28:08,680
Speaker 3: two televisions and a job in Ohio than three televisions

486
00:28:08,680 --> 00:28:11,520
Speaker 3: and no job. And that is a message that resonates

487
00:28:11,520 --> 00:28:14,800
Speaker 3: strongly with a lot of the American working in middle class.

488
00:28:14,840 --> 00:28:16,920
Speaker 3: I mean that that's a reality, and some of that

489
00:28:17,040 --> 00:28:22,560
Speaker 3: is is economic truth, and some of that is populist rhetoric.

490
00:28:23,119 --> 00:28:26,760
Speaker 3: But both are playing reasonably well for Trump's space.

491
00:28:28,040 --> 00:28:31,159
Speaker 1: You know, there's populism in the United States, there's popularism

492
00:28:31,560 --> 00:28:32,760
Speaker 1: like across the globe.

493
00:28:32,760 --> 00:28:36,480
Speaker 4: It seems to be you know, increasing, at least from

494
00:28:36,480 --> 00:28:37,240
Speaker 4: my perspective.

495
00:28:37,560 --> 00:28:41,000
Speaker 1: What do you think is driving that increase in populism

496
00:28:41,440 --> 00:28:45,040
Speaker 1: in all these different countries, whether they're you know, emerging

497
00:28:45,120 --> 00:28:46,440
Speaker 1: countries or developed countries.

498
00:28:46,600 --> 00:28:49,640
Speaker 3: Yeah, it's not Trump because it's much broader than just

499
00:28:49,680 --> 00:28:52,040
Speaker 3: the United States, as you say, and it's also been

500
00:28:52,080 --> 00:28:54,080
Speaker 3: happening for a long time. So I mean, he's a

501
00:28:54,120 --> 00:28:57,880
Speaker 3: symptom of it, and he's a political beneficiary, a political

502
00:28:58,040 --> 00:29:01,200
Speaker 3: entrepreneur that's identified it and taken advantage of it. But

503
00:29:01,320 --> 00:29:04,080
Speaker 3: there's something underneath it that's driving it. So what is

504
00:29:04,080 --> 00:29:07,520
Speaker 3: that thing? And I would say, you know, it started

505
00:29:08,520 --> 00:29:12,280
Speaker 3: with a lot of the disruptions from globalization, a lot

506
00:29:12,360 --> 00:29:15,720
Speaker 3: of the jobs that were more expensive in the US

507
00:29:15,720 --> 00:29:18,680
Speaker 3: and those countries that went to China and the emerging markets.

508
00:29:18,720 --> 00:29:21,480
Speaker 3: You had for thirty forty years, the emergence of a

509
00:29:21,560 --> 00:29:26,280
Speaker 3: global middle class and the hollowing out of comparatively wealthy

510
00:29:26,360 --> 00:29:30,120
Speaker 3: middle classes and working classes in the advanced industrial democracies

511
00:29:30,440 --> 00:29:35,040
Speaker 3: that then was furthered by automation and robotics, and a

512
00:29:35,040 --> 00:29:39,719
Speaker 3: lot of these governments did not take the macro profits

513
00:29:39,800 --> 00:29:45,280
Speaker 3: that their companies were making and effectively redistribute them to

514
00:29:45,400 --> 00:29:50,520
Speaker 3: people and communities that were being disrupted. So that's one aspect.

515
00:29:50,520 --> 00:29:55,120
Speaker 3: The second aspect is a large waves of immigration from

516
00:29:55,160 --> 00:29:59,320
Speaker 3: people that were not seen as suitably well integrated into

517
00:29:59,400 --> 00:30:04,400
Speaker 3: new community. Some of it is racism, and some of it,

518
00:30:04,520 --> 00:30:09,840
Speaker 3: of course, is algorithmic driven hatred. Some of it is

519
00:30:09,880 --> 00:30:13,160
Speaker 3: the fact that the mainstream media and talk radio and

520
00:30:13,200 --> 00:30:17,600
Speaker 3: the blogosphere and cable news and now most damagingly, social

521
00:30:17,680 --> 00:30:22,480
Speaker 3: media means that many people in these societies are only

522
00:30:23,400 --> 00:30:27,960
Speaker 3: paying attention, only digesting information from people that they already

523
00:30:28,000 --> 00:30:30,560
Speaker 3: agree with him, becoming more polarized by that. And I

524
00:30:30,600 --> 00:30:34,320
Speaker 3: would argue that the latter is actually the most dramatic

525
00:30:35,400 --> 00:30:39,160
Speaker 3: and is the most dangerous for democracy that we see

526
00:30:39,200 --> 00:30:41,160
Speaker 3: in these countries. But it's not solely that.

527
00:30:42,680 --> 00:30:47,680
Speaker 1: Okay, So just looking at in the Caribbean Haiti, you

528
00:30:47,680 --> 00:30:49,560
Speaker 1: know the lawlessness that we've seen, I don't think it

529
00:30:49,600 --> 00:30:52,040
Speaker 1: gets enough attention. Do you think that spills over to

530
00:30:52,120 --> 00:30:53,440
Speaker 1: other Caribbean nations.

531
00:30:53,840 --> 00:30:57,120
Speaker 3: I mean, it's not even spilling over to the Dominican Republic, right,

532
00:30:57,520 --> 00:30:59,760
Speaker 3: which shares an Island. It's actually one of the wealthiest,

533
00:30:59,760 --> 00:31:03,360
Speaker 3: best developed parts of the Caribbean and South America. It's

534
00:31:03,400 --> 00:31:07,240
Speaker 3: a great story. So no, I don't see it spilling

535
00:31:07,280 --> 00:31:09,640
Speaker 3: over much. If it was spilling over, I think there'd

536
00:31:09,640 --> 00:31:12,520
Speaker 3: be a lot more tension in the United States and

537
00:31:12,640 --> 00:31:15,480
Speaker 3: other countries that something has to be done. It's precisely

538
00:31:15,560 --> 00:31:19,280
Speaker 3: because it's a horrible, horrible situation that most people don't

539
00:31:19,280 --> 00:31:20,080
Speaker 3: feel affected by.

540
00:31:20,920 --> 00:31:22,040
Speaker 4: Okay, that's fair.

541
00:31:23,040 --> 00:31:26,400
Speaker 1: So I guess from your perspective, you know the world

542
00:31:26,520 --> 00:31:30,240
Speaker 1: probably better than most people. What keeps you up at

543
00:31:30,320 --> 00:31:32,960
Speaker 1: night in terms of being scared of?

544
00:31:35,440 --> 00:31:44,400
Speaker 3: You know, I really try hard to not allow like

545
00:31:45,040 --> 00:31:50,400
Speaker 3: my emotional sensibility any given time to affect my analysis.

546
00:31:50,400 --> 00:31:52,840
Speaker 3: So I think that that's a harder and harder thing

547
00:31:52,840 --> 00:31:55,080
Speaker 3: to do in this environment. It makes it more valuable.

548
00:31:56,320 --> 00:31:58,400
Speaker 3: I mean, I'm not someone who goes to sleep saying,

549
00:31:58,440 --> 00:32:00,560
Speaker 3: oh my God, like this is a Cuban misas environment,

550
00:32:00,560 --> 00:32:01,920
Speaker 3: this could be World War three and how do we

551
00:32:01,920 --> 00:32:04,440
Speaker 3: get through this? I'm not that way at all. I

552
00:32:04,480 --> 00:32:08,280
Speaker 3: will say the thing that makes me most both excited

553
00:32:08,360 --> 00:32:13,280
Speaker 3: and concerned is the Ai Revolution, which is not only

554
00:32:13,320 --> 00:32:18,480
Speaker 3: transformative economically, but is also transforming human beings. It's also

555
00:32:18,520 --> 00:32:24,520
Speaker 3: transforming society. It's transforming our geostrategic environment much faster than

556
00:32:24,960 --> 00:32:28,080
Speaker 3: governments have the ability to process it, much faster than

557
00:32:28,160 --> 00:32:32,400
Speaker 3: humans have the ability to respond to it in a

558
00:32:32,440 --> 00:32:35,040
Speaker 3: way that will be good for us long term. So

559
00:32:35,320 --> 00:32:37,680
Speaker 3: that's the area that I'm trying to get most up

560
00:32:37,720 --> 00:32:40,280
Speaker 3: to speed on. Again, it doesn't make me lose sleep,

561
00:32:40,480 --> 00:32:42,840
Speaker 3: but it makes me spend a lot more time talking

562
00:32:42,880 --> 00:32:46,640
Speaker 3: to people that understand that area, technologists that are cutting edge.

563
00:32:47,040 --> 00:32:49,960
Speaker 3: Where are we heading? Where is the world going to

564
00:32:49,960 --> 00:32:53,240
Speaker 3: be in three years time? With that sort of transformation

565
00:32:53,680 --> 00:32:56,200
Speaker 3: that I think most people in my field are just

566
00:32:56,360 --> 00:33:00,400
Speaker 3: not adequately fluent on how it's going to affect them.

567
00:33:00,840 --> 00:33:02,880
Speaker 1: Do you have an opinion on what needs to be done?

568
00:33:02,920 --> 00:33:06,240
Speaker 1: So AI is a net positive for society, unlike social media,

569
00:33:06,280 --> 00:33:09,600
Speaker 1: which is in my view and kind of taking from

570
00:33:09,600 --> 00:33:13,120
Speaker 1: what you said, somewhat of a negative, has turned out

571
00:33:13,120 --> 00:33:14,000
Speaker 1: to be a net negative.

572
00:33:14,200 --> 00:33:16,480
Speaker 3: Well, the obvious thing, it's not that you break up

573
00:33:16,520 --> 00:33:19,320
Speaker 3: the tech companies. It's that they just need to be

574
00:33:19,360 --> 00:33:22,720
Speaker 3: made accountable, not just for the profits but also for

575
00:33:22,840 --> 00:33:27,040
Speaker 3: the negative externalities. You know, we've you and I have

576
00:33:27,120 --> 00:33:31,400
Speaker 3: benefited from fifty years of industrialization which have been fantastic

577
00:33:31,600 --> 00:33:36,720
Speaker 3: for the betterment of the planet in terms of human growth.

578
00:33:37,520 --> 00:33:41,080
Speaker 3: Are more people are educated, Women are a bigger part

579
00:33:41,120 --> 00:33:45,200
Speaker 3: of the global economy. Infant mortality is down, life expectancy

580
00:33:45,280 --> 00:33:49,160
Speaker 3: is up. More people have the ability to live productive

581
00:33:49,200 --> 00:33:52,960
Speaker 3: lives around the world because of globalization, and companies have

582
00:33:53,040 --> 00:33:54,560
Speaker 3: made a lot of money on the back of that.

583
00:33:55,080 --> 00:33:58,640
Speaker 3: We have also gotten to one point two degrees of

584
00:33:59,240 --> 00:34:03,920
Speaker 3: a centigrade of warmth in the planet, which is destroying

585
00:34:03,920 --> 00:34:07,200
Speaker 3: a lot of species and then increasingly is disrupting a

586
00:34:07,240 --> 00:34:08,879
Speaker 3: lot of lives, and we're on a path to two

587
00:34:08,960 --> 00:34:12,200
Speaker 3: or two point five. And the companies that have made

588
00:34:12,320 --> 00:34:16,400
Speaker 3: all the money profiting from the good parts of globalization

589
00:34:17,040 --> 00:34:20,760
Speaker 3: haven't had to spend any money paying for the negative

590
00:34:20,800 --> 00:34:24,879
Speaker 3: externalities that have come from that climate change. I mean,

591
00:34:24,920 --> 00:34:28,120
Speaker 3: you know, you're at Bloomberg and we in the United

592
00:34:28,120 --> 00:34:32,200
Speaker 3: States are the best in the world at capitalism when

593
00:34:32,239 --> 00:34:35,520
Speaker 3: there are profits involved. But those same entrepreneurs and CEOs

594
00:34:35,560 --> 00:34:38,120
Speaker 3: become some of the world's best socialists when there are

595
00:34:38,160 --> 00:34:42,080
Speaker 3: losses involved. They say, not me, that's all about taxpayers,

596
00:34:42,080 --> 00:34:44,399
Speaker 3: that's all about kids in the future. And so when

597
00:34:44,400 --> 00:34:47,400
Speaker 3: we talk about social media. It's because the companies that

598
00:34:47,440 --> 00:34:50,400
Speaker 3: have made all this money have had literally zero accountability

599
00:34:50,400 --> 00:34:54,160
Speaker 3: for the damage they're doing to society. I don't want

600
00:34:54,200 --> 00:34:56,959
Speaker 3: to break up the social media companies, but I want

601
00:34:57,000 --> 00:35:01,400
Speaker 3: them to be accountable for the damage that they are doing.

602
00:35:01,719 --> 00:35:03,600
Speaker 3: It can't just be the profits. We got to look

603
00:35:03,600 --> 00:35:05,759
Speaker 3: at the balance sheet. It's p and L. It's p

604
00:35:05,880 --> 00:35:10,479
Speaker 3: and L. And if we have artificial intelligence out there

605
00:35:10,760 --> 00:35:14,200
Speaker 3: that is creating the world's most extraordinary profits in every

606
00:35:14,200 --> 00:35:17,680
Speaker 3: sector of the economy, when there are losses that affect society,

607
00:35:17,880 --> 00:35:22,000
Speaker 3: those companies must pay for those losses. And how do

608
00:35:22,080 --> 00:35:24,839
Speaker 3: you do that from you regulate them now.

609
00:35:24,880 --> 00:35:29,120
Speaker 1: But you need a global regulation that everyone's bought into.

610
00:35:29,320 --> 00:35:31,560
Speaker 3: It doesn't have to be necessarily global. I mean, when

611
00:35:31,600 --> 00:35:35,040
Speaker 3: the United States is the country that is absolutely dominant

612
00:35:35,080 --> 00:35:38,040
Speaker 3: in terms of these increasingly monopoly platforms, and the US

613
00:35:38,160 --> 00:35:40,359
Speaker 3: can do the line's share of the regulation, that will

614
00:35:40,360 --> 00:35:44,080
Speaker 3: be fine. Now, a regulator needs to be a set

615
00:35:44,120 --> 00:35:49,520
Speaker 3: of independent arbiters that acts in the public interest in

616
00:35:50,120 --> 00:35:56,360
Speaker 3: determining rule of law over all of these corporations. Unfortunately,

617
00:35:56,760 --> 00:36:00,759
Speaker 3: the United States is the democracy that is most captured

618
00:36:00,960 --> 00:36:04,440
Speaker 3: by money and special interests. Among advanced industrial economies in

619
00:36:04,440 --> 00:36:07,840
Speaker 3: the world, and that makes the US particularly unsuited to

620
00:36:07,960 --> 00:36:10,200
Speaker 3: effectively regulate these sorts of issues.

621
00:36:10,880 --> 00:36:12,680
Speaker 1: All right, well, I think I'm gonna wrap it up there,

622
00:36:12,800 --> 00:36:16,359
Speaker 1: and I really appreciate your time, especially on this busy day,

623
00:36:16,880 --> 00:36:17,440
Speaker 1: and I.

624
00:36:17,480 --> 00:36:19,239
Speaker 4: Want to thank you for tuning in. If you'd liked

625
00:36:19,239 --> 00:36:22,040
Speaker 4: the episode, please subscribe and leave a review. We've lined

626
00:36:22,120 --> 00:36:24,400
Speaker 4: up a number of great guests for the podcast.

627
00:36:24,480 --> 00:36:29,480
Speaker 1: You can check back to hear conversations with C Speed executives, shippers, regulators,

628
00:36:29,520 --> 00:36:31,640
Speaker 1: and decision makers within the freight markets.

629
00:36:31,719 --> 00:36:33,760
Speaker 4: And if you have an idea for a future episode,

630
00:36:33,760 --> 00:36:34,360
Speaker 4: please hit.

631
00:36:34,239 --> 00:36:37,520
Speaker 1: Me up on the terminal or on Twitter at logistics Lee.

632
00:36:37,560 --> 00:36:38,759
Speaker 4: Thanks everyone, Take care,