1 00:00:09,880 --> 00:00:13,800 Speaker 1: Welcome to the Bloomberg Surveillance Podcast. I'm Tom Keane Jay Lee. 2 00:00:13,960 --> 00:00:17,560 Speaker 1: We bring you insight from the best in economics, finance, investment, 3 00:00:18,000 --> 00:00:23,480 Speaker 1: and international relations. Find Bloomberg Surveillance on Apple Podcasts, SoundCloud, 4 00:00:23,600 --> 00:00:27,520 Speaker 1: Bloomberg dot Com, and of course on the Bloomberg. This 5 00:00:27,560 --> 00:00:30,080 Speaker 1: is a real treat. We welcome all of you worldwide 6 00:00:30,080 --> 00:00:33,839 Speaker 1: and across the nation to a conversation with Ian Bremer. 7 00:00:33,920 --> 00:00:37,159 Speaker 1: Let me explain here right now out of telaying. Dr 8 00:00:37,520 --> 00:00:41,400 Speaker 1: Bremer has built a franchise over a well decade with 9 00:00:41,600 --> 00:00:45,120 Speaker 1: Eurasia Group. And what he's done like any lead singer 10 00:00:45,280 --> 00:00:47,559 Speaker 1: running a good band, and to be sure, everybody in 11 00:00:47,560 --> 00:00:49,760 Speaker 1: the band is better than him. And he has put 12 00:00:49,800 --> 00:00:53,479 Speaker 1: together an outstanding team at Eurasia Group over the years 13 00:00:53,600 --> 00:00:56,600 Speaker 1: of true experts. So let's dive in with Ian Bremer 14 00:00:56,640 --> 00:00:59,240 Speaker 1: with the top risk of You had to rip up 15 00:00:59,280 --> 00:01:02,840 Speaker 1: the script of risk here and rewrite it on Friday 16 00:01:02,840 --> 00:01:05,960 Speaker 1: and Saturday. Where does iraq a ran all of these 17 00:01:05,959 --> 00:01:09,680 Speaker 1: tensions fit in to the global risks of this year. Oh, 18 00:01:09,720 --> 00:01:11,919 Speaker 1: we had to include it, certainly. But let's be clear, 19 00:01:12,040 --> 00:01:15,480 Speaker 1: when you look at the big trends out there is 20 00:01:15,520 --> 00:01:18,720 Speaker 1: a tipping point and that's true because an economy that's 21 00:01:18,720 --> 00:01:22,760 Speaker 1: been growing robustly after financial crisis is now starting to 22 00:01:22,800 --> 00:01:30,720 Speaker 1: get softer, a geopolitical recession is in serious uh capacity 23 00:01:30,840 --> 00:01:34,400 Speaker 1: right now, and that the alignment between the United States 24 00:01:34,440 --> 00:01:38,240 Speaker 1: and its allies is vastly weaker than it used to be. Globalization, 25 00:01:38,400 --> 00:01:41,160 Speaker 1: which is the one thing that had driven so much 26 00:01:41,200 --> 00:01:45,360 Speaker 1: of the good news um, is now taking a significant 27 00:01:45,400 --> 00:01:48,800 Speaker 1: step backwards as the United States and China decouples from 28 00:01:48,840 --> 00:01:52,520 Speaker 1: each other on the technology front. Those three things coming 29 00:01:52,560 --> 00:01:56,760 Speaker 1: together is frankly an unprecedented stead of trends over the 30 00:01:56,760 --> 00:01:59,520 Speaker 1: course of the last few generations. And it does mean 31 00:01:59,560 --> 00:02:03,560 Speaker 1: that even though we don't believe that Iran war is 32 00:02:03,680 --> 00:02:07,760 Speaker 1: going to suddenly lead to regional confrontation or World War three, 33 00:02:08,120 --> 00:02:11,120 Speaker 1: we do believe that the Resilian's globally is so much less. 34 00:02:11,240 --> 00:02:13,400 Speaker 1: You sat down today, inn and you said to me, 35 00:02:13,560 --> 00:02:15,720 Speaker 1: I just want to get away from the hysteria. I've 36 00:02:15,760 --> 00:02:18,520 Speaker 1: been doing that all weekend. You know. It's like excepter 37 00:02:18,600 --> 00:02:22,119 Speaker 1: Neil Ferguson's wonderful essay in the Times of London, Time 38 00:02:22,200 --> 00:02:26,079 Speaker 1: Freedman writing and others about some of the historical perspective. 39 00:02:26,400 --> 00:02:29,880 Speaker 1: If we're to get away from the hysteria and get 40 00:02:29,919 --> 00:02:34,000 Speaker 1: towards clear thinking on these immediate matters. What is the 41 00:02:34,120 --> 00:02:38,280 Speaker 1: clear thinking as we look at Tehran, Baghdad in Washington, 42 00:02:38,600 --> 00:02:41,080 Speaker 1: clear thinking is that the United States is likely to 43 00:02:41,120 --> 00:02:44,400 Speaker 1: be forced out of Iraq. It's troop presence, which Trump 44 00:02:44,480 --> 00:02:47,079 Speaker 1: didn't want to have to begin with, but nonetheless not 45 00:02:47,200 --> 00:02:49,760 Speaker 1: because of the United States, because of Iran, and because 46 00:02:49,760 --> 00:02:53,160 Speaker 1: the Shia, who are the majority in Iraq, um are 47 00:02:53,200 --> 00:02:56,359 Speaker 1: going to turn very significantly against the United States following 48 00:02:56,639 --> 00:02:59,560 Speaker 1: the series of bombings that you've seen um without any 49 00:02:59,639 --> 00:03:03,240 Speaker 1: premi from the Iraqi government invasion of their sovereignty. Having 50 00:03:03,280 --> 00:03:06,360 Speaker 1: said that, the power asymmetry between the United States and 51 00:03:06,360 --> 00:03:11,000 Speaker 1: Iran is massive. If the Iranians were to actually engage 52 00:03:11,000 --> 00:03:15,040 Speaker 1: in serious strikes against Americans in the region, they do 53 00:03:15,200 --> 00:03:18,000 Speaker 1: risk their regime. And that's very different from the risk 54 00:03:18,040 --> 00:03:21,200 Speaker 1: they thought they were taking when they went after a 55 00:03:21,280 --> 00:03:23,880 Speaker 1: US base in the last week, or when they went 56 00:03:24,000 --> 00:03:27,120 Speaker 1: after the U. S embassy in terms of the recent demonstrations, violence, 57 00:03:27,120 --> 00:03:30,320 Speaker 1: and occupation. So there now is a level of deterrence. 58 00:03:30,560 --> 00:03:35,000 Speaker 1: Trump is certainly enormously unpredictable, not very experienced leader from 59 00:03:35,000 --> 00:03:37,720 Speaker 1: a foreign policy perspective. That's different from saying that our 60 00:03:37,800 --> 00:03:41,160 Speaker 1: expectation is US Iran war. We don't think that's gonna happen. 61 00:03:41,400 --> 00:03:43,200 Speaker 1: There's so many ways to go, your folks, and I 62 00:03:43,240 --> 00:03:45,480 Speaker 1: think what I'll do is start with the immediate newsflow 63 00:03:45,560 --> 00:03:47,960 Speaker 1: as you wake up across the nation, and one of 64 00:03:47,960 --> 00:03:51,680 Speaker 1: them is to see the House Foreign Affairs Committee say 65 00:03:51,720 --> 00:03:53,880 Speaker 1: on the back end of I believe it was a tweet. 66 00:03:54,280 --> 00:03:57,920 Speaker 1: Mr Trump, you are not a dictator. Interpret force what 67 00:03:58,040 --> 00:04:02,280 Speaker 1: your raisor group says about this Warpowers Act, how we've 68 00:04:02,320 --> 00:04:05,960 Speaker 1: come out of the fractions seventies, the legacy of Vietnam, 69 00:04:06,320 --> 00:04:10,120 Speaker 1: and now Congress in the executive branch should work with 70 00:04:10,240 --> 00:04:13,520 Speaker 1: each other given these tensions. Most should and will are 71 00:04:13,560 --> 00:04:16,159 Speaker 1: two different things. Let's be very clear, um. I think 72 00:04:16,200 --> 00:04:21,800 Speaker 1: that if Maddis, McMaster, h Kelly, if they were still 73 00:04:21,800 --> 00:04:24,240 Speaker 1: in the administration, I don't think Sulimani would have been killed. 74 00:04:24,800 --> 00:04:29,080 Speaker 1: I think the constraints on Trump the adults in the 75 00:04:29,200 --> 00:04:33,240 Speaker 1: room are not what they were. Pompeo is very smart, 76 00:04:33,320 --> 00:04:37,080 Speaker 1: but facilitates Trump, and he's about to leave office and 77 00:04:37,200 --> 00:04:40,040 Speaker 1: run for Senate in Kansas in any case, so I 78 00:04:40,080 --> 00:04:42,600 Speaker 1: do think that that is a concern, and it's a 79 00:04:42,600 --> 00:04:45,599 Speaker 1: concern that is rightly brought up by Congress. But the 80 00:04:45,680 --> 00:04:50,240 Speaker 1: more important issue is that impeachment we are about to 81 00:04:50,360 --> 00:04:56,159 Speaker 1: see is no longer functional as a political constraint on 82 00:04:56,279 --> 00:04:59,240 Speaker 1: the president. And that's new. In other words, we're gonna 83 00:04:59,279 --> 00:05:01,560 Speaker 1: have a guy running for office that will be acquitted 84 00:05:01,600 --> 00:05:06,120 Speaker 1: by the Senate and he's going to have no no 85 00:05:06,279 --> 00:05:09,799 Speaker 1: ability of others to say, if you take the following actions, 86 00:05:09,839 --> 00:05:12,000 Speaker 1: you'll be removed from office. Only the people will be 87 00:05:12,040 --> 00:05:14,480 Speaker 1: able to do that with the vote, and his efforts 88 00:05:14,839 --> 00:05:18,279 Speaker 1: to manipulate and delegitimize that vote is going to be 89 00:05:18,360 --> 00:05:21,320 Speaker 1: unprecedented in recent times. And I guess my question, Dr 90 00:05:21,360 --> 00:05:25,560 Speaker 1: Bremer is synthesizing the Democrat candidate responses to what we're 91 00:05:25,560 --> 00:05:27,640 Speaker 1: seeing in the last three days. But more than that, 92 00:05:27,880 --> 00:05:32,200 Speaker 1: synthesize in the United States election into your top risks 93 00:05:32,200 --> 00:05:35,800 Speaker 1: of For the first time in twenty three years, we 94 00:05:35,920 --> 00:05:39,600 Speaker 1: view US domestic politics is actually the singular top risk, 95 00:05:39,680 --> 00:05:42,040 Speaker 1: and we don't usually think about that because the US 96 00:05:42,160 --> 00:05:45,640 Speaker 1: is so resilient, the political institutions are so strong. But 97 00:05:45,839 --> 00:05:48,400 Speaker 1: here the concern is that we end up in an 98 00:05:48,440 --> 00:05:52,080 Speaker 1: American Brexit, not because the US is leaving anything. But 99 00:05:52,320 --> 00:05:56,960 Speaker 1: because the outcome of the election is seen as uncertain, 100 00:05:57,320 --> 00:06:00,479 Speaker 1: is seen as contested and delegitimized. So it's not that 101 00:06:00,520 --> 00:06:02,080 Speaker 1: you vote for Trump or that you vote for some 102 00:06:02,160 --> 00:06:05,440 Speaker 1: Democratic candidate, but rather that whoever you vote for, half 103 00:06:05,480 --> 00:06:08,720 Speaker 1: of the population believes that person should not have actually 104 00:06:08,800 --> 00:06:12,520 Speaker 1: gotten the presidency. It's like core Bush, but without the 105 00:06:12,560 --> 00:06:16,400 Speaker 1: Supreme Court concluding the outcome. And and and we haven't 106 00:06:16,400 --> 00:06:19,239 Speaker 1: seen that since in teen seventy six in the United States, 107 00:06:19,480 --> 00:06:22,479 Speaker 1: with the election of Rutherford Hayes. There's quite something to 108 00:06:22,520 --> 00:06:25,159 Speaker 1: think about the world's largest economy going to have that 109 00:06:25,240 --> 00:06:28,440 Speaker 1: kind of atturning point moment with our upcoming election. Let's 110 00:06:28,480 --> 00:06:30,120 Speaker 1: let's move to some of the other risks that we 111 00:06:30,240 --> 00:06:32,240 Speaker 1: see this year. I want to touch on a few 112 00:06:32,320 --> 00:06:35,680 Speaker 1: here very quickly. On China, and of course you've been 113 00:06:35,720 --> 00:06:39,760 Speaker 1: wonderful in China with your Meritith sumter um Ian Bremer's 114 00:06:39,800 --> 00:06:42,720 Speaker 1: take on the next step of China not Phase two 115 00:06:42,760 --> 00:06:46,320 Speaker 1: in the trade talks, but almost Phase G Trump. What's 116 00:06:46,360 --> 00:06:49,400 Speaker 1: the next thing we should try to observe of these 117 00:06:49,400 --> 00:06:52,200 Speaker 1: two world leaders. We should observe that China has changed 118 00:06:52,240 --> 00:06:54,640 Speaker 1: a lot more than the United States, j and Pink's 119 00:06:54,640 --> 00:06:58,440 Speaker 1: consolidation of power, his decision to make China into an 120 00:06:58,440 --> 00:07:02,640 Speaker 1: ai superpower and to decouple itself from the United States, 121 00:07:02,680 --> 00:07:05,039 Speaker 1: his belt and Road, his end of term limits, his 122 00:07:05,080 --> 00:07:08,599 Speaker 1: anti corruption campaign. Those are the sea changes that we're seeing. 123 00:07:08,839 --> 00:07:13,080 Speaker 1: The United States has it's only bipartisan consensus on foreign policy, 124 00:07:13,200 --> 00:07:15,960 Speaker 1: is largely on a harder line response to the just 125 00:07:16,000 --> 00:07:17,840 Speaker 1: because the timing. You know, I've got to get to this. 126 00:07:17,960 --> 00:07:20,080 Speaker 1: You use the phrase a long march, which of course 127 00:07:20,080 --> 00:07:23,080 Speaker 1: has all that color of another time in place in China. 128 00:07:23,200 --> 00:07:25,600 Speaker 1: What does the new long march of China look like? Well, 129 00:07:25,720 --> 00:07:28,280 Speaker 1: Jiji and Ping uses that phrase and that that phrase 130 00:07:28,480 --> 00:07:31,840 Speaker 1: is about the Chinese not being able to be hit 131 00:07:31,960 --> 00:07:34,880 Speaker 1: by the United States on critical issues of national security, 132 00:07:35,080 --> 00:07:38,320 Speaker 1: most importantly their technology system. So it's building their own 133 00:07:38,320 --> 00:07:41,119 Speaker 1: supply chain, having control of the countries that really matter. 134 00:07:41,320 --> 00:07:44,640 Speaker 1: It's not needing the United States. That is decisively in 135 00:07:44,720 --> 00:07:47,800 Speaker 1: opposition to everything that mattered to multinational corporations in the 136 00:07:47,800 --> 00:07:50,200 Speaker 1: West for the last generations. We see the image of Tehran. 137 00:07:50,280 --> 00:07:52,120 Speaker 1: We get out our map of a run like we 138 00:07:52,200 --> 00:07:54,960 Speaker 1: got out our map of Iraq and two thousand three, 139 00:07:55,120 --> 00:07:58,480 Speaker 1: Tehran's in a bowl. They have a lot of air pollution. 140 00:07:58,680 --> 00:08:01,560 Speaker 1: We see the images of men the Indian cities with 141 00:08:01,680 --> 00:08:04,640 Speaker 1: horrific air pollution as well, and that gets us the 142 00:08:04,720 --> 00:08:08,320 Speaker 1: climate change. It's the vogue, but it's a different vogue 143 00:08:08,360 --> 00:08:10,720 Speaker 1: this year. Climate change is different now than it was 144 00:08:10,800 --> 00:08:14,280 Speaker 1: four years ago, isn't it. It's different because UM it's 145 00:08:14,360 --> 00:08:19,640 Speaker 1: causing more domestic political response in backlash when the governments 146 00:08:19,640 --> 00:08:22,120 Speaker 1: and the leaders aren't taking actions themselves to get to 147 00:08:22,120 --> 00:08:26,080 Speaker 1: two degrees to point five degrees UM. The Chinese, the Indians, 148 00:08:26,120 --> 00:08:30,400 Speaker 1: the Americans, nobody UM is on track UM to make 149 00:08:31,000 --> 00:08:33,360 Speaker 1: their commitments. What that means is that you're going to 150 00:08:33,400 --> 00:08:37,440 Speaker 1: start to see UM non organized responses like you have 151 00:08:37,520 --> 00:08:40,080 Speaker 1: in the financial markets right now, and that's definitely changing 152 00:08:40,080 --> 00:08:43,480 Speaker 1: how we think about UM. The multiples of shares in 153 00:08:44,200 --> 00:08:47,400 Speaker 1: fossil fuels, for example, or the companies that are served 154 00:08:47,440 --> 00:08:49,520 Speaker 1: by them, certainly going to change how we think about 155 00:08:49,520 --> 00:08:52,439 Speaker 1: portfolio allocation. Let me circle back to what I've noticed 156 00:08:52,480 --> 00:08:54,800 Speaker 1: since Friday. I've had to speak to adults in the room. 157 00:08:54,880 --> 00:08:57,960 Speaker 1: James Travitas, the Atimal, mark him at the general time, 158 00:08:57,960 --> 00:09:01,800 Speaker 1: Beckett of the United Kingdom Military, you as well, and 159 00:09:02,400 --> 00:09:06,280 Speaker 1: in others. We're all trying to get to clear conversation 160 00:09:06,559 --> 00:09:11,120 Speaker 1: in non hysteria over this. What should we listen for 161 00:09:11,240 --> 00:09:15,320 Speaker 1: in the coming few days, is this unfolds Iraq irun 162 00:09:15,480 --> 00:09:19,600 Speaker 1: in the United States. Let's watch what the Iranians do 163 00:09:19,800 --> 00:09:23,439 Speaker 1: and don't say. It's very interesting that the Foreign Minister 164 00:09:23,640 --> 00:09:27,160 Speaker 1: has focused on in the last twenty four hours leaving 165 00:09:27,160 --> 00:09:31,000 Speaker 1: the nuclear deal but also saying they'll come back if 166 00:09:31,160 --> 00:09:34,720 Speaker 1: the Europeans are able to continue to uphold and get 167 00:09:34,720 --> 00:09:38,640 Speaker 1: them the sanctions off. They're focusing on um the uh 168 00:09:39,240 --> 00:09:43,320 Speaker 1: Iraq uh pull out of the legislature, saying that the U. 169 00:09:43,440 --> 00:09:46,120 Speaker 1: S troops should leave. If they're focusing on things that 170 00:09:46,200 --> 00:09:49,080 Speaker 1: look like winds but aren't about we have to, you know, 171 00:09:49,120 --> 00:09:53,640 Speaker 1: sort of kill American military. For me, so far, I'd 172 00:09:53,720 --> 00:09:57,440 Speaker 1: actually say the diplomacy from Iran, not the demonstrations, but 173 00:09:57,480 --> 00:10:03,600 Speaker 1: the diplomacy feels more climb down, feels softer rather than harder. 174 00:10:03,800 --> 00:10:06,520 Speaker 1: There they are not in a position of power. If 175 00:10:06,520 --> 00:10:11,800 Speaker 1: you're the world's only superpower, your room for miscalculation is greater. 176 00:10:12,040 --> 00:10:14,800 Speaker 1: It gives me no pleasure to say that, but it's true, 177 00:10:14,800 --> 00:10:16,480 Speaker 1: and the Iranians are highly aware of it. We're gonna 178 00:10:16,480 --> 00:10:18,280 Speaker 1: have to wrap this up. Ian Bremer with us with 179 00:10:18,360 --> 00:10:20,760 Speaker 1: your Asia group. Of course, many more conversations through the 180 00:10:20,800 --> 00:10:23,040 Speaker 1: morning is well, and of course we'll look for this 181 00:10:23,080 --> 00:10:27,440 Speaker 1: out on social particularly on Twitter and on LinkedIn as well. 182 00:10:27,559 --> 00:10:32,120 Speaker 1: An important document the top risk from your Aisier group. 183 00:10:46,080 --> 00:10:48,360 Speaker 1: Pharaoh is sick and he is going home. He maybe 184 00:10:48,440 --> 00:10:51,480 Speaker 1: Yeoman's duty to come in earlier today and we hope 185 00:10:51,480 --> 00:10:54,240 Speaker 1: that Mr Farrell kills it, makes it through it. I've 186 00:10:54,240 --> 00:10:56,200 Speaker 1: had the plague here in the last few days and 187 00:10:56,240 --> 00:10:59,080 Speaker 1: now Farrell he got it for me. Is how he 188 00:10:59,120 --> 00:11:03,000 Speaker 1: has blaming on the with Paul Sweeney. He is and 189 00:11:03,160 --> 00:11:06,800 Speaker 1: Paul Sweeney uh is here and we're thrilled that we 190 00:11:06,840 --> 00:11:08,439 Speaker 1: can move forward. And we do that with a very 191 00:11:08,440 --> 00:11:12,040 Speaker 1: special broadcast. We welcome all of you worldwide, particularly on 192 00:11:12,080 --> 00:11:15,880 Speaker 1: a Pacific rim in your evening in Asia, to our 193 00:11:15,960 --> 00:11:19,880 Speaker 1: annual visit to euro to do Eurasia Groups offices in 194 00:11:19,880 --> 00:11:21,960 Speaker 1: New York and of course the centers around the top 195 00:11:22,040 --> 00:11:25,480 Speaker 1: risks of for Asian. Now we do this, Paul with 196 00:11:25,600 --> 00:11:28,400 Speaker 1: a market chourninger all the news slow coming off of 197 00:11:28,440 --> 00:11:31,239 Speaker 1: a rock and a run, and of course in Washington, 198 00:11:31,320 --> 00:11:33,440 Speaker 1: and we'll let others we'll describe that over the hour 199 00:11:34,280 --> 00:11:37,280 Speaker 1: as well, but certainly with futures of negative sixteen DA 200 00:11:37,440 --> 00:11:41,760 Speaker 1: futures negative one fifty eight yields jumble. This morning we 201 00:11:41,840 --> 00:11:46,120 Speaker 1: had seventy dollar oil sixty ninety two on Brent crude, 202 00:11:46,440 --> 00:11:49,320 Speaker 1: and the global Litmus paper that I use dollar yen 203 00:11:50,160 --> 00:11:52,120 Speaker 1: showing me a little bit of calm there one O 204 00:11:52,280 --> 00:11:56,320 Speaker 1: eight sixteen on yen churning at this morning. So certainly, Paul, 205 00:11:56,360 --> 00:11:58,680 Speaker 1: I don't see panic out there to you, I do not, 206 00:11:58,760 --> 00:12:00,760 Speaker 1: and we kind of made that comment on on Friday 207 00:12:00,840 --> 00:12:03,640 Speaker 1: as well. But clearly a new level of risk in 208 00:12:03,679 --> 00:12:06,080 Speaker 1: the market and the market participants across the risky asset 209 00:12:06,160 --> 00:12:09,160 Speaker 1: classes time you mentioned oil as well as the end 210 00:12:09,200 --> 00:12:11,440 Speaker 1: trying to figure out kind of where this goes next 211 00:12:11,640 --> 00:12:16,440 Speaker 1: steps here as relates to renewed min East attentions. A 212 00:12:16,480 --> 00:12:18,960 Speaker 1: lot of news slow there this morning. Course, Kevin Serilllean 213 00:12:19,000 --> 00:12:21,960 Speaker 1: Washington monitoring this as best he can. It is the 214 00:12:22,040 --> 00:12:25,960 Speaker 1: top risky and of COURSI and Bremer and Cliff and 215 00:12:26,000 --> 00:12:29,200 Speaker 1: others had to rip it up and write a new ideas. 216 00:12:29,240 --> 00:12:32,199 Speaker 1: And I believe their third risk of the year, which 217 00:12:32,280 --> 00:12:36,320 Speaker 1: is on the Middle East and particularly on Iran but 218 00:12:36,600 --> 00:12:40,480 Speaker 1: so much of this is about China. Maybe they don't 219 00:12:40,559 --> 00:12:42,640 Speaker 1: leave this year with China. They look at the US 220 00:12:42,760 --> 00:12:45,880 Speaker 1: election is their lead risk. But Meredith Sumter, with this 221 00:12:46,000 --> 00:12:49,080 Speaker 1: head of all their research and of course truly expert 222 00:12:49,200 --> 00:12:52,880 Speaker 1: on China, is well, what's the nuance here in China 223 00:12:53,280 --> 00:12:58,440 Speaker 1: of this January versus a year ago. A year ago, Tom, 224 00:12:58,480 --> 00:13:01,280 Speaker 1: I think there was a great deal more expectation that 225 00:13:01,360 --> 00:13:03,760 Speaker 1: the U. S And China would have some kind of 226 00:13:03,800 --> 00:13:07,119 Speaker 1: trade confrontation but would find some way to resolve their differences. 227 00:13:07,559 --> 00:13:10,360 Speaker 1: A year on where we stand now we have a 228 00:13:10,400 --> 00:13:14,040 Speaker 1: Phase one trade deal. But even with the deal, Tom, 229 00:13:14,080 --> 00:13:17,480 Speaker 1: there is no real truth between the world's two largest economies. 230 00:13:17,679 --> 00:13:22,520 Speaker 1: Does China need a truce? Jan Ping doesn't believe so, 231 00:13:22,760 --> 00:13:25,800 Speaker 1: and he is girding up his population for what he 232 00:13:25,840 --> 00:13:29,240 Speaker 1: believes is going to be a long march to increase 233 00:13:29,720 --> 00:13:33,680 Speaker 1: China's own self reliance and reduce its dependency and risk 234 00:13:34,080 --> 00:13:37,920 Speaker 1: exposure to the United States. The dependency is around sanctions. 235 00:13:38,000 --> 00:13:39,920 Speaker 1: I'm a bit confused here, as I'm sure all my 236 00:13:40,040 --> 00:13:43,120 Speaker 1: listeners are about what sanctions are coming on, which ones 237 00:13:43,160 --> 00:13:44,959 Speaker 1: are coming off. The hope and prayer of getting back 238 00:13:45,000 --> 00:13:48,040 Speaker 1: to some form of not lazy, fair free trade, but 239 00:13:48,080 --> 00:13:52,560 Speaker 1: at least less sanctions. Give us a sanctions update as 240 00:13:52,600 --> 00:13:56,240 Speaker 1: you see it. What's the dynamic of sanctions into two 241 00:13:56,240 --> 00:13:59,079 Speaker 1: thousand twenty. Well, in two tho markets are going to 242 00:13:59,160 --> 00:14:02,520 Speaker 1: be looking for or a partial reduction of tariffs, but 243 00:14:02,600 --> 00:14:05,480 Speaker 1: for the most part, the majority of the tariffs are 244 00:14:05,520 --> 00:14:08,760 Speaker 1: are going to to stay in place. Uh, And we 245 00:14:08,880 --> 00:14:11,959 Speaker 1: could be seeing more tough measures from the US towards 246 00:14:12,000 --> 00:14:14,800 Speaker 1: China this year. It's it's an election year and product 247 00:14:14,960 --> 00:14:18,120 Speaker 1: is nothing changes? Is that right? Not much is changing. 248 00:14:18,120 --> 00:14:20,480 Speaker 1: But I'll tell you what is changing on the negative 249 00:14:20,520 --> 00:14:23,800 Speaker 1: front is you're going to see a hardening of this 250 00:14:23,960 --> 00:14:29,000 Speaker 1: confrontation and locking in that hardened confrontation for the longer term. 251 00:14:29,360 --> 00:14:31,720 Speaker 1: So that's why we have US China as our third 252 00:14:31,760 --> 00:14:35,440 Speaker 1: top risk. But tied to that is our second top risk, TOM, 253 00:14:35,480 --> 00:14:38,800 Speaker 1: which is the Great decoupling. This is essentially China in 254 00:14:38,800 --> 00:14:42,480 Speaker 1: the US, the two largest economies disentangling from one another 255 00:14:43,240 --> 00:14:45,840 Speaker 1: in a way that's going to have spillover effects not 256 00:14:45,920 --> 00:14:50,720 Speaker 1: just in global technology, but in business activity, in research, 257 00:14:50,960 --> 00:14:54,520 Speaker 1: in media and entertainment, in culture. You're going to have 258 00:14:54,760 --> 00:14:58,480 Speaker 1: more of a risk of a true bifurcation of the 259 00:14:58,520 --> 00:15:01,800 Speaker 1: global order in a way that really haven't taken seriously 260 00:15:02,520 --> 00:15:05,680 Speaker 1: since the Cold War. So, Meredith, we had yet to 261 00:15:05,720 --> 00:15:08,360 Speaker 1: see anything really on paper as it relates to Phase one. 262 00:15:08,400 --> 00:15:09,920 Speaker 1: So I hate to even go to phase two. But 263 00:15:10,000 --> 00:15:14,880 Speaker 1: is there any sense of what Phase two could encompass, uh, 264 00:15:15,000 --> 00:15:17,320 Speaker 1: and maybe any sense of timing or is this just 265 00:15:17,440 --> 00:15:22,840 Speaker 1: a tweet out there in the wind terrific question. I 266 00:15:22,920 --> 00:15:26,280 Speaker 1: would say the President and US here Bob Lizzheiser, are 267 00:15:26,360 --> 00:15:29,160 Speaker 1: supremely focused on a phase two. If you talk to 268 00:15:29,200 --> 00:15:32,440 Speaker 1: the actual trade negotiators on the US and China side, though, 269 00:15:32,440 --> 00:15:36,120 Speaker 1: who are going over the substance of what those negotiations 270 00:15:36,160 --> 00:15:39,600 Speaker 1: might entail. No one seriously believes that we're likely to 271 00:15:39,640 --> 00:15:43,760 Speaker 1: see a Phase two negotiation reached completion, And believe me, 272 00:15:43,800 --> 00:15:46,360 Speaker 1: there's a whole lot left on the table there. Phase 273 00:15:46,440 --> 00:15:50,680 Speaker 1: one really is just about a partial teriff reduction, a 274 00:15:50,760 --> 00:15:54,520 Speaker 1: resumption of of some Chinese purchases of of US products, 275 00:15:54,560 --> 00:15:58,800 Speaker 1: namely agg But the core issues at at at the 276 00:15:58,840 --> 00:16:05,840 Speaker 1: heart of the conference tation, industrial policies, subsidies, the misalignment 277 00:16:06,080 --> 00:16:09,440 Speaker 1: of the Chinese economy with the U S economy, that 278 00:16:09,640 --> 00:16:13,480 Speaker 1: all remains, and that's not likely to be fundamentally changed 279 00:16:13,560 --> 00:16:16,680 Speaker 1: by onward negotiations this year. So, Meredith, one of the 280 00:16:16,720 --> 00:16:19,480 Speaker 1: things that this administration has done is it as UH 281 00:16:19,760 --> 00:16:24,080 Speaker 1: really taken trade negotiations with China to arguably the next level, 282 00:16:24,080 --> 00:16:26,760 Speaker 1: a more direct level including tariffs and so on and 283 00:16:26,800 --> 00:16:30,320 Speaker 1: so forth, a more bilateral approach, more aggressive approach. Do 284 00:16:30,360 --> 00:16:33,760 Speaker 1: you think this is the new normal for US China 285 00:16:34,240 --> 00:16:37,120 Speaker 1: UH negotiations or if there is another administration coming in, 286 00:16:37,160 --> 00:16:40,080 Speaker 1: it might go back to something UH that we're more 287 00:16:40,160 --> 00:16:45,640 Speaker 1: used to. This is a this is a new normal 288 00:16:45,720 --> 00:16:48,200 Speaker 1: for US China with the Trump administration. But you know, 289 00:16:48,440 --> 00:16:51,400 Speaker 1: even if you get a democratic administration in office in 290 00:16:52,320 --> 00:16:55,520 Speaker 1: one UH, there is still going to be a hardened 291 00:16:55,640 --> 00:16:59,360 Speaker 1: US approach towards China. Now, they might take a and 292 00:16:59,480 --> 00:17:03,240 Speaker 1: and look all of the Democratic candidates who are still 293 00:17:03,280 --> 00:17:05,720 Speaker 1: in the field. Not one of them has said that 294 00:17:05,760 --> 00:17:10,119 Speaker 1: they would reduce tariffs on China. The difference in approach, however, 295 00:17:10,640 --> 00:17:15,560 Speaker 1: might be more of a collaborative strategy with other allies 296 00:17:15,640 --> 00:17:18,480 Speaker 1: to to play sort of collective pressure on China to 297 00:17:18,560 --> 00:17:21,560 Speaker 1: adjust its approach. One of them is, that's so wonderful 298 00:17:21,560 --> 00:17:23,679 Speaker 1: what your Asia group is. All the horses you're bringing here. 299 00:17:23,680 --> 00:17:27,040 Speaker 1: You've got Robert D. Caplan in helping you out advising. 300 00:17:27,119 --> 00:17:29,879 Speaker 1: Of course, this book Asia's Cauldron and was in my 301 00:17:29,920 --> 00:17:32,240 Speaker 1: Book of the Year a couple of years ago, and 302 00:17:32,280 --> 00:17:35,560 Speaker 1: it is about the South China Sea. How does China 303 00:17:35,720 --> 00:17:38,399 Speaker 1: right now interpret the South China see? Is it just 304 00:17:38,440 --> 00:17:42,360 Speaker 1: as simple as they say, it's ours? It has always 305 00:17:42,359 --> 00:17:46,960 Speaker 1: been in China's mindset, there's and what you're seeing. It 306 00:17:47,160 --> 00:17:49,240 Speaker 1: is it is, but it's it's what you're seeing. We're 307 00:17:49,240 --> 00:17:53,400 Speaker 1: talking about the bifurcating world. Tom. For China, it's reality 308 00:17:53,400 --> 00:17:56,120 Speaker 1: and the sound China see. They've built their outposts, they're 309 00:17:56,240 --> 00:17:59,760 Speaker 1: exercising influence, maybe not absolute control, and maybe they don't 310 00:17:59,840 --> 00:18:03,000 Speaker 1: they don't get a chance showing the flag enough on 311 00:18:03,040 --> 00:18:07,560 Speaker 1: the U S sign We are in in the area. 312 00:18:07,640 --> 00:18:09,879 Speaker 1: But I think that there's enough of a question about 313 00:18:10,000 --> 00:18:14,800 Speaker 1: US staying power in the region and US commitment to 314 00:18:15,160 --> 00:18:18,440 Speaker 1: partnerships and alliances in the region to where the other 315 00:18:18,520 --> 00:18:21,920 Speaker 1: countries in the region are already hedging their bets. Meridith 316 00:18:21,960 --> 00:18:23,760 Speaker 1: sumter with us with your Raiser group, folks, as we 317 00:18:23,800 --> 00:18:26,760 Speaker 1: look at their top risk. A lovely conversation here and 318 00:18:26,760 --> 00:18:29,199 Speaker 1: look for this on our podcast. We are thrilled to 319 00:18:29,200 --> 00:18:32,760 Speaker 1: re emphasize our podcast in this January obviously out at 320 00:18:32,760 --> 00:18:36,040 Speaker 1: Apple Spotify for their names. I'm not hip enough to remember, 321 00:18:36,560 --> 00:18:40,960 Speaker 1: but the podcasts have been hugely, hugely successful. And we'll 322 00:18:41,040 --> 00:18:45,200 Speaker 1: lead with Brummer and Sumter. Uh. This day you read? 323 00:18:45,480 --> 00:18:48,720 Speaker 1: Do you read Chinese? Right? Can you speak it? Uh? 324 00:18:48,800 --> 00:18:51,240 Speaker 1: Not as well? It's hard, it's hard to make that lead. 325 00:18:52,000 --> 00:18:54,560 Speaker 1: What what do you read in China? Explain to our 326 00:18:54,600 --> 00:18:57,840 Speaker 1: audience who are kids? My child's going to take Mandarin 327 00:18:57,880 --> 00:18:59,800 Speaker 1: and that lasts for like two weeks. It's like, you know, 328 00:19:00,000 --> 00:19:04,960 Speaker 1: Ellen lessons. When you read Chinese? How do you read it? 329 00:19:05,080 --> 00:19:07,600 Speaker 1: What do you profession? Is there like a Beijing newspaper 330 00:19:07,640 --> 00:19:10,480 Speaker 1: you read every morning or is it research reports or 331 00:19:10,800 --> 00:19:13,680 Speaker 1: secret things that come in like you know, on pigeons, wings, 332 00:19:13,720 --> 00:19:16,240 Speaker 1: on ravens, wings, like Game of Thrones. When you read 333 00:19:16,400 --> 00:19:19,639 Speaker 1: China in Chinese, what do you read? You read a 334 00:19:19,720 --> 00:19:23,119 Speaker 1: variety of different newspapers. Um, all of them sort of 335 00:19:23,240 --> 00:19:26,320 Speaker 1: state bad. But there are different nuances with the with 336 00:19:26,359 --> 00:19:31,159 Speaker 1: the different newspapers out there. But it's it's a wonderful language. Uh. 337 00:19:31,200 --> 00:19:33,680 Speaker 1: And I think when you when you actually get in 338 00:19:33,720 --> 00:19:37,280 Speaker 1: to the language, you get a sense of the whole 339 00:19:37,560 --> 00:19:41,399 Speaker 1: holy different worldview that is coming from from Beijing. And 340 00:19:41,440 --> 00:19:46,040 Speaker 1: again it sort of leads back into this bifurcated world 341 00:19:46,240 --> 00:19:49,760 Speaker 1: that we're that we're moving into. Neither China nor the 342 00:19:49,920 --> 00:19:54,600 Speaker 1: US is strong enough or is going to take enough 343 00:19:54,600 --> 00:19:57,159 Speaker 1: of the pain to push the other off of the 344 00:19:57,280 --> 00:19:59,480 Speaker 1: helm of global leadership. But they've got to find a 345 00:19:59,520 --> 00:20:02,280 Speaker 1: way to co exist. And what you see in Chinese 346 00:20:02,320 --> 00:20:06,200 Speaker 1: print media, uh, and in commentary frankly on on wayble 347 00:20:06,320 --> 00:20:10,520 Speaker 1: and and and other media social media platforms is increasingly 348 00:20:10,640 --> 00:20:15,240 Speaker 1: China is looking to project its own interpretation of what 349 00:20:15,359 --> 00:20:22,600 Speaker 1: international technology, international trade, international financial architecture, international rules and regulations, 350 00:20:23,080 --> 00:20:27,199 Speaker 1: how those should be shaped to account for Beijing's and 351 00:20:27,280 --> 00:20:30,520 Speaker 1: China's own interests in addition to the interests of the 352 00:20:30,960 --> 00:20:34,439 Speaker 1: traditional Western liberal order. Mare, could you just give us 353 00:20:34,440 --> 00:20:36,400 Speaker 1: a quick update on kind of what is the latest 354 00:20:36,680 --> 00:20:38,840 Speaker 1: from Hong Kong. We know there's been some leadership changes 355 00:20:38,880 --> 00:20:43,639 Speaker 1: there right well, we've we've seen actually just in the 356 00:20:43,720 --> 00:20:48,679 Speaker 1: last couple of days, Beijing appointing a perceived sort of 357 00:20:48,760 --> 00:20:52,080 Speaker 1: hardliner to to go in and be their chief representative 358 00:20:52,560 --> 00:20:56,399 Speaker 1: in Hong Kong. Uh, this is to be expected. Uh, 359 00:20:56,560 --> 00:21:01,160 Speaker 1: Beijing's approach is to strengthen their reach in control over 360 00:21:01,240 --> 00:21:06,160 Speaker 1: Hong Kong, even as the protests show no signs of abating. Uh. 361 00:21:06,200 --> 00:21:09,800 Speaker 1: And you know speculation that Carrie Lamb will be stepping 362 00:21:09,840 --> 00:21:16,240 Speaker 1: down perhaps later this year after the leon Quai, China's 363 00:21:16,359 --> 00:21:19,920 Speaker 1: own sort of meetings in March of their National People's 364 00:21:19,960 --> 00:21:24,480 Speaker 1: Congress and Consultative Conference. But she might step down, but 365 00:21:24,560 --> 00:21:27,399 Speaker 1: that's not going to do anything to to take the 366 00:21:27,400 --> 00:21:30,080 Speaker 1: floor underneath the protests that we see happening in Hong Kong. 367 00:21:30,200 --> 00:21:32,360 Speaker 1: This has been wonderful, Maritus Sumter, thank you so much. 368 00:21:32,359 --> 00:21:34,639 Speaker 1: I thank you to all your research capabilities. Here are 369 00:21:34,680 --> 00:21:37,840 Speaker 1: the different voices we've heard this morning at eur Asia Group. 370 00:21:51,640 --> 00:21:55,000 Speaker 1: Without question, this is our interview of the morning. He 371 00:21:55,160 --> 00:21:58,840 Speaker 1: is Henry Rome and he is far, far too young 372 00:21:58,920 --> 00:22:01,119 Speaker 1: to be this good. He's out of Princeton where he 373 00:22:01,119 --> 00:22:04,240 Speaker 1: had a modest knowledge of the Persian language, and then 374 00:22:04,280 --> 00:22:09,040 Speaker 1: it's going on to a sterling academic career studying the 375 00:22:09,119 --> 00:22:13,320 Speaker 1: Levant and Persia, and he joins us today is truly 376 00:22:13,359 --> 00:22:17,440 Speaker 1: one of the nation's Persian experts. With your Aisia Group, 377 00:22:17,480 --> 00:22:19,439 Speaker 1: I should point out we're thrilled that we have the 378 00:22:19,480 --> 00:22:22,920 Speaker 1: top Risks of two thousand twenty four Ian Bremer's e 379 00:22:23,000 --> 00:22:25,720 Speaker 1: Raisia group this morning, Henry, thank you so much for 380 00:22:25,800 --> 00:22:29,080 Speaker 1: taking time with us. What is the number one thing 381 00:22:29,320 --> 00:22:34,680 Speaker 1: Americans miss of the present Islamic Republic and its linkage 382 00:22:34,720 --> 00:22:39,560 Speaker 1: back to a Persia of long ago? Sure? Thanks, Tom, 383 00:22:39,560 --> 00:22:42,920 Speaker 1: It's it's great to be here here with you. I 384 00:22:43,080 --> 00:22:46,400 Speaker 1: think the number one thing that that Americans missed is 385 00:22:46,520 --> 00:22:50,480 Speaker 1: the prevalence in in today's Iran of the same nationalism 386 00:22:50,560 --> 00:22:53,320 Speaker 1: that we've seen over the past hundreds of years. That 387 00:22:53,640 --> 00:22:58,800 Speaker 1: while Iranians today obviously majority Shia country, but the depth 388 00:22:59,200 --> 00:23:03,120 Speaker 1: of religion and only gets you so far. Really, the nationalism, 389 00:23:03,160 --> 00:23:06,679 Speaker 1: the pride and the empire is still very strong, and 390 00:23:06,720 --> 00:23:10,800 Speaker 1: I think the government today uses that very effectively to 391 00:23:10,840 --> 00:23:13,080 Speaker 1: try to rally around the flag. And then we're seeing 392 00:23:13,119 --> 00:23:15,840 Speaker 1: it right this morning with with the funeral processions for 393 00:23:15,960 --> 00:23:21,679 Speaker 1: costumsula money. We whether we read Dexter, Philkins or George 394 00:23:21,680 --> 00:23:24,480 Speaker 1: Packer the others out in the media, Tom Friedman and 395 00:23:24,520 --> 00:23:27,719 Speaker 1: others writing and the last number of days there seems 396 00:23:27,720 --> 00:23:30,680 Speaker 1: to be a debate about the Islamic Republic. I get 397 00:23:30,680 --> 00:23:34,240 Speaker 1: the idea of nationhood and everyone coalescing. What does the 398 00:23:34,320 --> 00:23:38,440 Speaker 1: new Islamic Republic look like. It's not the same one 399 00:23:38,480 --> 00:23:42,040 Speaker 1: of nineteen seventy nine or even eighty nine after the war, 400 00:23:42,280 --> 00:23:45,720 Speaker 1: is it. No, it's not. It's it shifted in a 401 00:23:45,760 --> 00:23:48,600 Speaker 1: number of important ways. One is that after the revolution 402 00:23:48,680 --> 00:23:54,960 Speaker 1: you've had a much more institutionalized mechanism that have I 403 00:23:55,320 --> 00:23:59,960 Speaker 1: think become or solidified I should say, the the rule 404 00:24:00,000 --> 00:24:04,119 Speaker 1: will of of of the clerical elite, and also I 405 00:24:04,160 --> 00:24:07,520 Speaker 1: think limited or or disabused people of the notions that 406 00:24:07,520 --> 00:24:10,199 Speaker 1: that this would be a that this would take a 407 00:24:10,200 --> 00:24:13,640 Speaker 1: more republican, a more democratic route. So there so there's 408 00:24:13,680 --> 00:24:17,199 Speaker 1: been I think in in in aspect of disappointment, especially 409 00:24:17,200 --> 00:24:22,160 Speaker 1: among the revolutionary generation. I think also the government's proclivity, 410 00:24:22,200 --> 00:24:26,280 Speaker 1: of government's willingness to crack down viciously on the population 411 00:24:26,320 --> 00:24:31,080 Speaker 1: when it feels threatened, I think is a more recent phenomena, 412 00:24:31,160 --> 00:24:34,399 Speaker 1: going back uh to to two thousand and nine. Certainly 413 00:24:34,440 --> 00:24:37,600 Speaker 1: they were protests before, but the events of two thousand nine, 414 00:24:37,640 --> 00:24:39,639 Speaker 1: combined with the ones over the past few months, I 415 00:24:39,680 --> 00:24:43,280 Speaker 1: think have been quite um quite quite quite impactful. And 416 00:24:43,520 --> 00:24:45,239 Speaker 1: I think that the last point I'll make is is 417 00:24:45,400 --> 00:24:49,879 Speaker 1: the kind of UH intensification of of official corruption of 418 00:24:50,480 --> 00:24:53,399 Speaker 1: you have folks who are ostensibly men of God but 419 00:24:53,440 --> 00:24:58,040 Speaker 1: are also involved very significantly in the Iranian business sector. 420 00:24:58,240 --> 00:25:01,399 Speaker 1: And and and I think you have a um a 421 00:25:01,480 --> 00:25:04,879 Speaker 1: disappointment of expectations among many Iranians. Now, does that mean 422 00:25:04,920 --> 00:25:07,320 Speaker 1: they want to overthrow the government? No? And I think 423 00:25:07,359 --> 00:25:10,880 Speaker 1: that's that's what we're seeing very clearly uh in Tehran 424 00:25:10,960 --> 00:25:12,359 Speaker 1: right now. So anyway, I guess what a lot of 425 00:25:12,400 --> 00:25:14,840 Speaker 1: observers are wondering at this point as we wait for 426 00:25:14,920 --> 00:25:17,119 Speaker 1: some type of retaliation, is this going to be a 427 00:25:17,160 --> 00:25:20,040 Speaker 1: series of tips for tat's kind of thing, back and forth, 428 00:25:20,080 --> 00:25:24,320 Speaker 1: back and forth, you know, relatively low level engagement, or 429 00:25:24,640 --> 00:25:27,720 Speaker 1: do we really run the risk of this escalating into 430 00:25:27,800 --> 00:25:31,520 Speaker 1: some type of war, however limited. I think it will 431 00:25:31,560 --> 00:25:33,639 Speaker 1: be more of the former, more of the tip for 432 00:25:33,720 --> 00:25:36,960 Speaker 1: TAT exchanges. But but there's going to be bloodshed and 433 00:25:36,800 --> 00:25:39,200 Speaker 1: and and it's going to be very turbulent. So I 434 00:25:39,240 --> 00:25:43,000 Speaker 1: would say that that that that the Iranians will continue 435 00:25:43,040 --> 00:25:46,280 Speaker 1: to have US forces in their sights. They said very 436 00:25:46,280 --> 00:25:49,719 Speaker 1: publicly over the weekend that military retaliation is what they 437 00:25:49,760 --> 00:25:52,240 Speaker 1: are going to do. And I think once that happens, 438 00:25:52,280 --> 00:25:55,080 Speaker 1: President Trump will be compelled to respond, and there will 439 00:25:55,119 --> 00:25:57,560 Speaker 1: be a cycle here. But but there is a ceiling 440 00:25:57,560 --> 00:26:01,280 Speaker 1: to this, and I think the ceiling is is reinforced 441 00:26:01,320 --> 00:26:04,719 Speaker 1: by the structural factors on either side that are pushing 442 00:26:05,200 --> 00:26:08,159 Speaker 1: the two sides away from the kind of brink of 443 00:26:08,280 --> 00:26:10,960 Speaker 1: brink of a larger escalation. On the U s side, 444 00:26:10,800 --> 00:26:14,199 Speaker 1: I think Trump remains a verse to military conflict. I 445 00:26:14,200 --> 00:26:19,320 Speaker 1: think recognizes that, uh conducting a major war essentially in 446 00:26:19,359 --> 00:26:23,440 Speaker 1: the middle of an election campaign is would be extremely damaging. 447 00:26:23,840 --> 00:26:26,800 Speaker 1: And I think from the Iranian side, they are very cautious, 448 00:26:26,800 --> 00:26:29,960 Speaker 1: They're calculated. They do not want to fight a war 449 00:26:30,040 --> 00:26:32,600 Speaker 1: that they're going to lose. So I think the that 450 00:26:32,720 --> 00:26:35,679 Speaker 1: imposes some constraints on what we're going to be seeing 451 00:26:35,680 --> 00:26:38,280 Speaker 1: over the next weeks and months. Henry, just quickly, what 452 00:26:38,560 --> 00:26:42,680 Speaker 1: is your best estimate of when we could or when 453 00:26:42,680 --> 00:26:46,320 Speaker 1: Iran could really make a move here in retaliation. I 454 00:26:46,359 --> 00:26:50,200 Speaker 1: think within the next days or weeks, UH, so fairly soon. 455 00:26:50,359 --> 00:26:55,320 Speaker 1: They're using the Sulamani funeral as a way to generate 456 00:26:55,440 --> 00:26:59,200 Speaker 1: and and and consolidate nationalism in the country and also 457 00:26:59,240 --> 00:27:01,520 Speaker 1: as a way to buy time to figure out exactly 458 00:27:01,920 --> 00:27:04,399 Speaker 1: what to do. But but but I would say, you know, 459 00:27:04,520 --> 00:27:09,400 Speaker 1: imminent essentially, Henry, thank you so much. We really look 460 00:27:09,440 --> 00:27:12,160 Speaker 1: forward to your analysis, your synthesis here in the next 461 00:27:12,640 --> 00:27:16,000 Speaker 1: number of days. Henry Rome is with Eurasia Group, and 462 00:27:16,000 --> 00:27:18,440 Speaker 1: of course one of his focal points is the Middle 463 00:27:18,440 --> 00:27:21,520 Speaker 1: East and it is a top risk for two thousand 464 00:27:21,560 --> 00:27:37,520 Speaker 1: twenty four Ian Bremer and Eurasia Group. This is a 465 00:27:37,640 --> 00:27:39,479 Speaker 1: joy with your Asia Group as we look at their 466 00:27:39,520 --> 00:27:43,399 Speaker 1: top risk for two thousand twenty is midg Rahman, who 467 00:27:43,480 --> 00:27:46,280 Speaker 1: over the last two three years has been dead on 468 00:27:46,520 --> 00:27:51,480 Speaker 1: of a very very new, indistinctive Europe. Midge, what is 469 00:27:51,480 --> 00:27:55,159 Speaker 1: the distinction in your European report as you look at 470 00:27:55,160 --> 00:28:00,560 Speaker 1: the top risks of Thanks for having me, Tommy. It's really, 471 00:28:00,760 --> 00:28:02,800 Speaker 1: I think a year where Europe is going to try 472 00:28:02,840 --> 00:28:06,240 Speaker 1: to do more geopolitically, and and that I think is 473 00:28:07,080 --> 00:28:10,800 Speaker 1: a direct reflection of the fact anglom week at home 474 00:28:11,000 --> 00:28:14,840 Speaker 1: cobbled by a wobbly coalition while Emmanuel Macron is sitting 475 00:28:14,880 --> 00:28:18,000 Speaker 1: on top of a super majority and a mandate that's 476 00:28:18,040 --> 00:28:20,159 Speaker 1: probably going to see him win the next election. In 477 00:28:21,880 --> 00:28:25,960 Speaker 1: Macron is decisively off this view that Europe should be 478 00:28:26,000 --> 00:28:29,440 Speaker 1: doing more in the world, taking on China and its 479 00:28:29,440 --> 00:28:33,640 Speaker 1: centralized political and economic model, dealing with the fact Trump 480 00:28:34,200 --> 00:28:37,560 Speaker 1: is erratic, inconsistent and cannot be relied upon, and in 481 00:28:37,560 --> 00:28:41,000 Speaker 1: that in that space, I think a believer in the 482 00:28:41,040 --> 00:28:43,920 Speaker 1: idea that Europe needs to be the defender of multilateralism 483 00:28:43,960 --> 00:28:48,400 Speaker 1: and needs to speak up in world affairs, well, some 484 00:28:48,480 --> 00:28:50,000 Speaker 1: of that is and I've seen as so much in 485 00:28:50,000 --> 00:28:52,360 Speaker 1: the last number of days, including all that's going on 486 00:28:52,400 --> 00:28:55,960 Speaker 1: in Tihran and Baghdad, and that is the yearning look 487 00:28:56,000 --> 00:28:59,920 Speaker 1: back to a Westphalian system. There's almost this in a 488 00:29:00,000 --> 00:29:04,120 Speaker 1: nostalgia mide raman of going back to what was? What 489 00:29:04,200 --> 00:29:06,680 Speaker 1: do we want to go back to post World War two? 490 00:29:07,120 --> 00:29:10,040 Speaker 1: Or something even more distant like the Treaty of West Failure. 491 00:29:12,400 --> 00:29:16,480 Speaker 1: I agree, I agree, there is something historical and almost 492 00:29:16,520 --> 00:29:19,120 Speaker 1: mystical about what the French are trying to achieve, and actually, 493 00:29:19,160 --> 00:29:22,320 Speaker 1: in practical and real terms, you know, what can the 494 00:29:22,400 --> 00:29:27,080 Speaker 1: European Union do to prevent escalation between this U S 495 00:29:27,160 --> 00:29:29,760 Speaker 1: and IRUN crisis? And the answer at the moment is 496 00:29:29,800 --> 00:29:33,360 Speaker 1: absolutely nothing. But I think it's that precise answer that's 497 00:29:33,440 --> 00:29:36,240 Speaker 1: driving the French in particular to say, look, we need 498 00:29:36,280 --> 00:29:38,600 Speaker 1: to be able to speak up in world affairs more effectively, 499 00:29:38,640 --> 00:29:40,000 Speaker 1: and we need to be able to do more. And 500 00:29:40,040 --> 00:29:43,120 Speaker 1: I think in the first instance, what the Europeans are 501 00:29:43,120 --> 00:29:47,280 Speaker 1: going to try and do is leverage their market to 502 00:29:47,440 --> 00:29:50,040 Speaker 1: give them a bigger voice in world affairs. So they're 503 00:29:50,080 --> 00:29:53,720 Speaker 1: going to try to use the internal market to promote 504 00:29:54,000 --> 00:29:59,640 Speaker 1: cross border military trade, to promote more technological development within 505 00:29:59,760 --> 00:30:04,000 Speaker 1: your Europe, to make them less dependent on other parts 506 00:30:04,000 --> 00:30:07,840 Speaker 1: of the world for defense and for the protection of 507 00:30:07,880 --> 00:30:10,280 Speaker 1: their own interests. That's where I think they start with 508 00:30:10,440 --> 00:30:14,080 Speaker 1: the market in major I find your comments about the 509 00:30:14,080 --> 00:30:19,000 Speaker 1: EU trying to assert itself in global affairs extraordinarily interesting, 510 00:30:19,320 --> 00:30:22,080 Speaker 1: just at a time when one of its most important 511 00:30:22,080 --> 00:30:25,120 Speaker 1: members is leaving the block. How do you think the 512 00:30:25,160 --> 00:30:28,920 Speaker 1: EU is going to deal with the UK and Brexit 513 00:30:29,000 --> 00:30:31,600 Speaker 1: really over the coming weeks and coming months. I'm just 514 00:30:31,640 --> 00:30:33,680 Speaker 1: kind of trying to get a sense of how harder 515 00:30:33,720 --> 00:30:37,200 Speaker 1: soft this whole thing. Maybe, Yeah, it's a great question. 516 00:30:37,240 --> 00:30:39,360 Speaker 1: I think, you know, the the European Union doesn't have 517 00:30:39,400 --> 00:30:43,000 Speaker 1: a great strategic answer for the fact the UK is leaving. 518 00:30:43,000 --> 00:30:46,520 Speaker 1: They're desperate to keep the UK in its diplomatic orbit, 519 00:30:46,560 --> 00:30:49,520 Speaker 1: and I think the statement last night from Chancellor Merc 520 00:30:49,640 --> 00:30:53,160 Speaker 1: le French President Macron and Boris Johnson will go down 521 00:30:53,160 --> 00:30:56,040 Speaker 1: well in Europe in the sense that Boris has firmly 522 00:30:56,040 --> 00:30:59,120 Speaker 1: aligned himself for now at least with the EU camp 523 00:30:59,560 --> 00:31:02,560 Speaker 1: in calling forward the escalation, and as you'll know, there 524 00:31:02,600 --> 00:31:05,840 Speaker 1: was no reference to Trump in that statement. But in 525 00:31:05,960 --> 00:31:09,520 Speaker 1: terms of pure Brexit negotiations, I think the landing zone 526 00:31:09,560 --> 00:31:13,000 Speaker 1: looks quite hard because you have a government with Boris 527 00:31:13,040 --> 00:31:15,840 Speaker 1: John's and that basically wants to do things differently. You know, 528 00:31:15,920 --> 00:31:19,160 Speaker 1: their interpretation of Brexit and the mandate they have is 529 00:31:19,200 --> 00:31:21,160 Speaker 1: the right to do things differently. They don't want to 530 00:31:21,200 --> 00:31:23,280 Speaker 1: follow EU rules in the future. They want to be 531 00:31:23,320 --> 00:31:25,040 Speaker 1: free and they want to do things their own way, 532 00:31:25,440 --> 00:31:29,160 Speaker 1: and that's going to immediately impact how close the two 533 00:31:29,200 --> 00:31:34,360 Speaker 1: sides can indeed be, because ultimately market access for the 534 00:31:34,480 --> 00:31:37,160 Speaker 1: UK depends on following EU rules and if the UK 535 00:31:37,240 --> 00:31:39,000 Speaker 1: no more no longer wants to do that because they 536 00:31:39,040 --> 00:31:41,600 Speaker 1: want to be democratic and sovereign, well, that's going to 537 00:31:41,680 --> 00:31:44,520 Speaker 1: have an impact on I think how close economically the 538 00:31:44,520 --> 00:31:47,520 Speaker 1: two sides can be, which suggests there is a degree 539 00:31:47,520 --> 00:31:51,000 Speaker 1: of risk for Sterling, a degree of economic disruption that 540 00:31:51,080 --> 00:31:53,680 Speaker 1: we're going to see manifest towards the end of the 541 00:31:53,760 --> 00:31:57,600 Speaker 1: year when that becomes apparent to the investment community. Image. 542 00:31:57,680 --> 00:31:59,720 Speaker 1: Just give us a sense of in the City of 543 00:32:00,040 --> 00:32:04,400 Speaker 1: London in Parliament, what's the confidence level that the UK 544 00:32:04,600 --> 00:32:09,520 Speaker 1: can actually negotiate a meaningful and positive trade agreement with 545 00:32:09,600 --> 00:32:11,840 Speaker 1: both the EU and also the U S. I mean, 546 00:32:11,880 --> 00:32:13,600 Speaker 1: we have it. It's kind of going on live now 547 00:32:13,640 --> 00:32:17,320 Speaker 1: between the US and China. These things aren't easy to do. Yeah, 548 00:32:17,360 --> 00:32:20,040 Speaker 1: I mean you saw you saw the end of December 549 00:32:20,520 --> 00:32:22,840 Speaker 1: when the when the government announced it was not going 550 00:32:22,920 --> 00:32:25,520 Speaker 1: to extend the transition period. So basically we're in a 551 00:32:25,600 --> 00:32:28,240 Speaker 1: standstill transition now until the end of the year. The 552 00:32:28,280 --> 00:32:30,800 Speaker 1: government said they're not going to extend that into one 553 00:32:30,800 --> 00:32:32,880 Speaker 1: and there was an immediate dip in sterling, something of 554 00:32:32,920 --> 00:32:36,240 Speaker 1: a crash. I think markets are still working off the 555 00:32:36,240 --> 00:32:38,880 Speaker 1: assumption that the government is going to soften its approach 556 00:32:39,280 --> 00:32:43,400 Speaker 1: and that ultimately economic objectives will prove imperative and that 557 00:32:43,480 --> 00:32:46,520 Speaker 1: will driver closer relationship between the two sides, and I 558 00:32:46,560 --> 00:32:49,680 Speaker 1: think that's misreading where this government is. I think they 559 00:32:49,720 --> 00:32:52,720 Speaker 1: do as I say, want to do differently. That suggests 560 00:32:52,800 --> 00:32:55,880 Speaker 1: negotiations are going to be complex, both with Europe but 561 00:32:55,960 --> 00:32:58,200 Speaker 1: also but also with the US, I mean the price 562 00:32:58,280 --> 00:33:00,880 Speaker 1: of the trade agreement with America. Who is going to 563 00:33:00,960 --> 00:33:04,120 Speaker 1: be difficult for this government because obviously the US are 564 00:33:04,120 --> 00:33:06,520 Speaker 1: going to ask the things the government doesn't want to 565 00:33:06,560 --> 00:33:08,680 Speaker 1: agree to. I'm not going to be challenging. I think 566 00:33:10,440 --> 00:33:13,040 Speaker 1: if you're just joining US, Midje Ramen with US. Here 567 00:33:13,120 --> 00:33:15,120 Speaker 1: is with Eurasia Group as we look at their top 568 00:33:15,240 --> 00:33:18,760 Speaker 1: risks for twenty twenty Midge. In the last forty eight hours, 569 00:33:19,760 --> 00:33:22,760 Speaker 1: we've all had to become more expert on the collapse 570 00:33:22,800 --> 00:33:25,960 Speaker 1: of a nuclear accord between the United States and Iran. 571 00:33:26,480 --> 00:33:29,680 Speaker 1: And it's something that Europe has tried to triage almost 572 00:33:29,720 --> 00:33:34,160 Speaker 1: through the recent months and even quarters. What does Europe 573 00:33:34,400 --> 00:33:39,600 Speaker 1: want out of a nuclear redo with Iran? Did they 574 00:33:39,720 --> 00:33:43,920 Speaker 1: go it alone with Iran? How will that work? I mean, 575 00:33:43,960 --> 00:33:46,080 Speaker 1: I think based on based on what's happened in the 576 00:33:46,160 --> 00:33:49,560 Speaker 1: last twelve hours, I think, honestly there's the likelihood that 577 00:33:49,560 --> 00:33:53,280 Speaker 1: they're on nuclear agreement now hoses, you know, falling close 578 00:33:53,320 --> 00:33:55,720 Speaker 1: to below zero. I think that was I think the 579 00:33:55,760 --> 00:33:59,400 Speaker 1: immediate objective and conferent for the European Union last night. 580 00:33:59,520 --> 00:34:01,040 Speaker 1: I wrong is going to now back out of the 581 00:34:01,120 --> 00:34:05,400 Speaker 1: nuclear agreement More broadly in the region, led by the French. 582 00:34:05,440 --> 00:34:09,120 Speaker 1: There's a desire to stabilize Iraq and allow Iraq to 583 00:34:09,160 --> 00:34:12,840 Speaker 1: be fully sovereign, and then of course a priority to 584 00:34:12,920 --> 00:34:16,520 Speaker 1: attack Dash and Isis. I think that's absolutely top of mind, 585 00:34:16,560 --> 00:34:19,600 Speaker 1: certainly in the Elise and also in the Chancellery. That's 586 00:34:19,600 --> 00:34:23,320 Speaker 1: how I'd argue Europeans are thinking about their strategic objectives 587 00:34:23,600 --> 00:34:25,840 Speaker 1: in the Middle East, but do they really have the 588 00:34:25,880 --> 00:34:29,080 Speaker 1: means that diplomacy, the politics to allow them to achieve 589 00:34:29,120 --> 00:34:32,200 Speaker 1: those goals. I think, and I'm quite skeptical. Frankly, we 590 00:34:32,280 --> 00:34:35,280 Speaker 1: don't have an army. Foreign and defense policy is heavily 591 00:34:35,400 --> 00:34:38,600 Speaker 1: uncoordinated in Europe. Capitals are basically doing their own thing, 592 00:34:38,920 --> 00:34:41,160 Speaker 1: and that's why I think this is largely going to 593 00:34:41,239 --> 00:34:45,120 Speaker 1: remain something in the American theater. I think US Iran 594 00:34:45,600 --> 00:34:47,840 Speaker 1: is a US are an issue. Europe will try and 595 00:34:47,880 --> 00:34:50,200 Speaker 1: be relevant, but I think, frankly speaking, it's not going 596 00:34:50,239 --> 00:34:55,040 Speaker 1: to be particularly effective. It's it's just first thing to me. 597 00:34:55,160 --> 00:34:58,839 Speaker 1: So it's to be clear on this medge is does 598 00:34:58,920 --> 00:35:05,640 Speaker 1: Europe have of voice in Tehran? Not not allowed one, 599 00:35:05,719 --> 00:35:07,840 Speaker 1: not a very prominent one. I mean, if you think 600 00:35:08,280 --> 00:35:11,080 Speaker 1: about the number of UK nationals that are being held 601 00:35:11,160 --> 00:35:14,880 Speaker 1: hostage in Iran, and the amount of political capital that 602 00:35:15,000 --> 00:35:18,880 Speaker 1: was invested by Jeremy Hunt, the previous Foreign Secretary Boris 603 00:35:18,960 --> 00:35:22,000 Speaker 1: Johnson when he was Foreign Secretary and now as Prime Minister, 604 00:35:22,320 --> 00:35:24,799 Speaker 1: and the Iranians are simply not moving and there's not 605 00:35:24,840 --> 00:35:27,359 Speaker 1: that much the UK or indeed the European Union can 606 00:35:27,440 --> 00:35:30,040 Speaker 1: do to get the Iranians to budge. So I think 607 00:35:30,080 --> 00:35:33,440 Speaker 1: I think that's why Tom the French are so eager 608 00:35:33,520 --> 00:35:37,359 Speaker 1: to redefine more broadly the European Union's place in the world. 609 00:35:37,440 --> 00:35:40,479 Speaker 1: That's why MacLean intent on your being a geopolitical player, 610 00:35:40,480 --> 00:35:43,759 Speaker 1: because he recognizes the gap in his aspirations and where 611 00:35:43,760 --> 00:35:47,400 Speaker 1: the EU is today. So right, do you think, what 612 00:35:47,440 --> 00:35:54,120 Speaker 1: do they have this? I'm sorry my fault. Did they 613 00:35:54,160 --> 00:35:58,680 Speaker 1: have a sense of isolationism like the president and like 614 00:35:58,800 --> 00:36:03,040 Speaker 1: a good part of the love America. I mean, I 615 00:36:03,120 --> 00:36:06,120 Speaker 1: think it's it's lesser celt I think to be to 616 00:36:06,200 --> 00:36:09,400 Speaker 1: be honest, Tom, and and again it's that the problem 617 00:36:09,440 --> 00:36:14,239 Speaker 1: with Europe is structurally, states are basically not coordinated in 618 00:36:14,280 --> 00:36:17,080 Speaker 1: the area of foreign and security policy. It remains the 619 00:36:17,080 --> 00:36:19,440 Speaker 1: prerogative of the member states, and the member states have 620 00:36:19,520 --> 00:36:22,920 Speaker 1: competing objectives. I think Macron is of the view that 621 00:36:23,120 --> 00:36:25,840 Speaker 1: real sovereignty for the EU is a function of the 622 00:36:25,920 --> 00:36:28,480 Speaker 1: more stand up army. They want to invest more on 623 00:36:28,480 --> 00:36:32,040 Speaker 1: the militarily sad on the military side. The Germans don't 624 00:36:32,040 --> 00:36:34,000 Speaker 1: want to do that. The Germans want to dabble at 625 00:36:34,040 --> 00:36:36,839 Speaker 1: the edges of defense policy, but not do much more, 626 00:36:36,880 --> 00:36:39,280 Speaker 1: certainly not get close to the two present the Trump 627 00:36:39,719 --> 00:36:43,319 Speaker 1: that the US administration and Trump is asking for. So 628 00:36:43,360 --> 00:36:46,839 Speaker 1: there are a big competing strategic objectives within Europe about 629 00:36:46,960 --> 00:36:50,480 Speaker 1: how it can achieve the sovereignty. The Macron team are 630 00:36:50,760 --> 00:36:54,160 Speaker 1: asking for what is necessarily in order to fulfill that objective, 631 00:36:54,200 --> 00:36:56,440 Speaker 1: and there is no agreement, and that that really, I 632 00:36:56,440 --> 00:36:59,360 Speaker 1: think always hamstring the ability for Europe to be influential 633 00:36:59,360 --> 00:37:05,239 Speaker 1: on the globals aage mid drama. Thank you so much 634 00:37:05,360 --> 00:37:08,520 Speaker 1: for joining us images the analysts that you raised your group, 635 00:37:08,560 --> 00:37:25,600 Speaker 1: covering all things your We have Brent crude sixty nine 636 00:37:26,400 --> 00:37:29,200 Speaker 1: dollars a barrel that's up another one percent today on 637 00:37:29,239 --> 00:37:31,160 Speaker 1: that Mid East tension. Do you get a sense of 638 00:37:31,239 --> 00:37:33,520 Speaker 1: how this may play out in terms of global energy? 639 00:37:33,600 --> 00:37:36,880 Speaker 1: Welcome Amy Myers Jaffee. She's the David M. Rubinstein, Senior 640 00:37:36,920 --> 00:37:39,880 Speaker 1: Fellow for Energy and the Environment at the Council on 641 00:37:39,920 --> 00:37:41,960 Speaker 1: Foreign Relationship, joins us on the phone. Amy, thanks so 642 00:37:42,000 --> 00:37:44,640 Speaker 1: much for joining us. So again, quite a shock to 643 00:37:44,880 --> 00:37:49,400 Speaker 1: financial markets, including commodity markets and oil. How does what 644 00:37:49,520 --> 00:37:51,279 Speaker 1: is your sense of kind of how oil is going 645 00:37:51,320 --> 00:37:54,759 Speaker 1: to play out here of the coming weeks and months. Well, 646 00:37:55,040 --> 00:37:58,200 Speaker 1: you know, you have two things going on. One, we 647 00:37:58,320 --> 00:38:01,240 Speaker 1: had this narrative that was held in the oil price down, 648 00:38:01,760 --> 00:38:04,400 Speaker 1: which was that there wouldn't be a trade deal between 649 00:38:04,440 --> 00:38:07,440 Speaker 1: the United States and China. Um. So to the extent 650 00:38:07,600 --> 00:38:11,240 Speaker 1: that we continue to hear positive things about a possible 651 00:38:11,280 --> 00:38:14,359 Speaker 1: deal coming in a week, and if it actually comes 652 00:38:14,360 --> 00:38:18,160 Speaker 1: to fruition, um, that that's going to keep the short 653 00:38:18,239 --> 00:38:22,239 Speaker 1: sellers at bay. And then the second step is what 654 00:38:22,400 --> 00:38:25,160 Speaker 1: happens in the Middle East. One of the things that 655 00:38:25,239 --> 00:38:29,640 Speaker 1: I think characterizes the market now is that every time 656 00:38:29,719 --> 00:38:34,200 Speaker 1: we have these increasing geopolitical risks, the market becomes less 657 00:38:34,239 --> 00:38:37,400 Speaker 1: resilient to the next event. So now I think the 658 00:38:37,480 --> 00:38:41,280 Speaker 1: market has to worry about loss of Iraqi oil production 659 00:38:41,360 --> 00:38:44,640 Speaker 1: to the market, and that could come away. Uh, that 660 00:38:44,680 --> 00:38:47,239 Speaker 1: could come about in one of two ways. Uh, We've 661 00:38:47,280 --> 00:38:50,680 Speaker 1: already seen that the very small nust for real oil 662 00:38:50,760 --> 00:38:54,800 Speaker 1: field go down for a day or two because the demonstrators, 663 00:38:55,239 --> 00:38:59,120 Speaker 1: So we could see more disruptions and production that's come 664 00:38:59,160 --> 00:39:03,279 Speaker 1: about because of violence on the ground inside Iraq. UM 665 00:39:03,480 --> 00:39:07,600 Speaker 1: or if it turns out that UM the Trump administration, 666 00:39:08,160 --> 00:39:11,400 Speaker 1: things don't go smoothly, we don't have a diplomatic solution 667 00:39:11,480 --> 00:39:16,440 Speaker 1: and and tensions escalate. You could see the Trump administration 668 00:39:16,520 --> 00:39:22,080 Speaker 1: being taking a stronger position on whether there's oil smuggling 669 00:39:22,120 --> 00:39:25,560 Speaker 1: between Iraq and Iran and which what if that oil 670 00:39:25,600 --> 00:39:28,279 Speaker 1: production is being sold in the international market and that 671 00:39:28,320 --> 00:39:31,120 Speaker 1: could take some barrels off the market UM, and then 672 00:39:31,160 --> 00:39:34,120 Speaker 1: of course the market is worried about what if there's 673 00:39:34,160 --> 00:39:38,200 Speaker 1: a tremendous escalation which hopefully we will avoid. UM and 674 00:39:38,280 --> 00:39:42,040 Speaker 1: it was engaged with UM oil facilities because as we 675 00:39:42,120 --> 00:39:45,040 Speaker 1: all know from the history of the Iraq Iran War, 676 00:39:45,680 --> 00:39:48,680 Speaker 1: in that case, which was an extended war UH, the 677 00:39:48,719 --> 00:39:52,800 Speaker 1: oil industries of both Iraq and Iran were completely destroyed 678 00:39:52,840 --> 00:39:56,719 Speaker 1: over the courses of UH the ongoing conflict. So, Amy, 679 00:39:56,760 --> 00:39:59,960 Speaker 1: do you believe that the primary risk to the global 680 00:40:00,040 --> 00:40:05,120 Speaker 1: energy markets is direct attacks or retaliatory attacks on Mideast 681 00:40:05,440 --> 00:40:08,600 Speaker 1: refining production and that type of thing is that probably 682 00:40:08,719 --> 00:40:13,960 Speaker 1: what is the most risk driver for global energy prices. Well, 683 00:40:14,120 --> 00:40:17,160 Speaker 1: I think there's also the possibility of sort of you know, 684 00:40:17,320 --> 00:40:20,360 Speaker 1: just unrest in the country and it affects their oil industry. 685 00:40:20,400 --> 00:40:23,480 Speaker 1: I think that's an additional risk. But the thing, you know, 686 00:40:23,560 --> 00:40:27,839 Speaker 1: I think the market probably will part a distinction between these. 687 00:40:27,880 --> 00:40:31,320 Speaker 1: You have the risk that the Iranian government will respond 688 00:40:31,400 --> 00:40:34,719 Speaker 1: as it as with you know, direct attack UM on 689 00:40:34,880 --> 00:40:38,600 Speaker 1: some kind of oil facility in a in a neighboring country. 690 00:40:38,600 --> 00:40:41,120 Speaker 1: But you also have the risk now with the sort 691 00:40:41,120 --> 00:40:46,640 Speaker 1: of calls for revenge the death of Commander um Sleimani, 692 00:40:47,120 --> 00:40:50,640 Speaker 1: that you might have a splinter group that decides that 693 00:40:50,719 --> 00:40:54,799 Speaker 1: they want to attack energy facilities UM in Iraq or 694 00:40:54,840 --> 00:40:59,080 Speaker 1: elsewhere UM as part of their own you know driver, 695 00:40:59,280 --> 00:41:00,719 Speaker 1: And so you have sort of a more of a 696 00:41:00,840 --> 00:41:05,040 Speaker 1: terrorism risk that's probably higher today than it was a 697 00:41:05,080 --> 00:41:08,080 Speaker 1: week ago. And then you have the overall risk, which 698 00:41:08,120 --> 00:41:12,359 Speaker 1: I thought the market was undervaluing post to appcake attack UM, 699 00:41:12,440 --> 00:41:16,840 Speaker 1: that something would happen that would cause Iran to sponsor 700 00:41:16,880 --> 00:41:22,400 Speaker 1: a second attack on energy facilities in the Gulf Amy 701 00:41:22,800 --> 00:41:25,839 Speaker 1: we winn in doubt get out the map in the 702 00:41:25,880 --> 00:41:31,160 Speaker 1: bottom line is the Iranian oil reserves are concentrated at 703 00:41:31,200 --> 00:41:35,160 Speaker 1: the northeast top of the Persian Gulf and up the river. 704 00:41:35,880 --> 00:41:39,000 Speaker 1: And am I right that literally just over the river 705 00:41:39,640 --> 00:41:43,080 Speaker 1: are the Iraq oil reserves. I mean, how easy is 706 00:41:43,120 --> 00:41:46,840 Speaker 1: it is it for Iran to co opt the Iraqi 707 00:41:46,920 --> 00:41:51,719 Speaker 1: oil reserves if they choose to, Uh, Well, I would 708 00:41:51,840 --> 00:41:56,200 Speaker 1: say very easy. And I would say, in my opinion, 709 00:41:56,800 --> 00:41:59,880 Speaker 1: um that behind the scenes, you're already seeing some of 710 00:42:00,040 --> 00:42:03,719 Speaker 1: that helped service the Iranian economy um. And you know, 711 00:42:03,800 --> 00:42:07,719 Speaker 1: maybe not at at scale, but but I think part 712 00:42:07,719 --> 00:42:09,960 Speaker 1: of the things that you see when you listen to 713 00:42:10,000 --> 00:42:14,600 Speaker 1: the demonstrators that were calling for Iran to exit Iraq 714 00:42:14,680 --> 00:42:17,240 Speaker 1: and calling for new political leaders that weren't so tied 715 00:42:17,440 --> 00:42:22,240 Speaker 1: I'm sorry Iraqi demonstrators calling for Iran uh to exit 716 00:42:22,280 --> 00:42:24,520 Speaker 1: the country and to have its political leaders be less 717 00:42:24,560 --> 00:42:28,400 Speaker 1: tied to Iran. I think that there's sort of cozy 718 00:42:28,719 --> 00:42:32,600 Speaker 1: um relationship and oil swaps and things like that. We're 719 00:42:32,680 --> 00:42:36,400 Speaker 1: part and parcel of that and and and if you 720 00:42:36,480 --> 00:42:39,719 Speaker 1: think about Iran and Iraq um, and then you go 721 00:42:39,800 --> 00:42:43,160 Speaker 1: back in history to when people had concerns that is 722 00:42:43,719 --> 00:42:48,240 Speaker 1: Iraq somehow we're to stay in Kuwait. They could threaten 723 00:42:48,880 --> 00:42:53,280 Speaker 1: um you military force to threaten oil post the whole Gulf. 724 00:42:53,560 --> 00:42:57,000 Speaker 1: We're in that same situation today, and you can imagine 725 00:42:57,120 --> 00:43:01,040 Speaker 1: a nuclear Iran announcing that no shippings going through the 726 00:43:01,080 --> 00:43:03,359 Speaker 1: straight of her moves, and that would be a much 727 00:43:03,400 --> 00:43:10,279 Speaker 1: more complicated declaration than the current round making that declaration. Well, 728 00:43:10,719 --> 00:43:12,680 Speaker 1: we gotta leave it there, Amy Myers, Jeff, you thank 729 00:43:12,719 --> 00:43:15,000 Speaker 1: you so much, Just really really love that. We greatly 730 00:43:15,040 --> 00:43:18,239 Speaker 1: greatly appreciate today with the Console on Foreign Relations, the 731 00:43:18,280 --> 00:43:24,160 Speaker 1: Rubinstein Senior Fellow, Thanks for listening to the Bloomberg Surveillance podcast. 732 00:43:24,560 --> 00:43:29,560 Speaker 1: Subscribe and listen to interviews on Apple Podcasts, SoundCloud, or 733 00:43:29,640 --> 00:43:33,960 Speaker 1: whichever podcast platform you prefer. I'm on Twitter at Tom 734 00:43:34,040 --> 00:43:37,920 Speaker 1: Keane before the podcast. You can always catch us worldwide. 735 00:43:38,400 --> 00:43:39,480 Speaker 1: I'm Bloomberg Radio.