Einar Tangen: Asia Responds to an Unpredictable America (Transcript)

The problem here is he hasn’t calculated the economic and political damage he’s creating, especially the erosion of trust and reliability.

# Economic Challenges Ahead

So many issues. Let’s start with economic ones. Inflation from tariffs – they just concluded this agreement with Vietnam and he says, “Oh, you know, 20% across the board and then 40% on anything that’s transshipped.” Well, if you do a careful study of Vietnam, a good percentage – I would say 70-80% of the things that they create there – either have inputs from China or are transshipping. They’re obviously very smart about this. They try to wash it, to hide it, and companies will have that incentive.

National debt and interest rate hikes – this is a big one, and you mentioned it right off the bat. What happens to the national debt when you add $5 trillion in new borrowing? That’s apart from the fact that every year – last year there’s a little under $6 trillion federal budget, of which $2 trillion was borrowed. That isn’t going to change. So over the next three and a half years, you’re going to see another $8 trillion borrowed in addition to the $5 trillion.

Then you add in interest rates. Central banks across the world are at the lowest point in terms of holding US treasuries that they have been since 2011. That means you’re really relying on the private markets. Private markets will certainly invest if they have confidence and the rate is high enough because there’s risk.

Already the US dollar has gone down by 10%. So if you’re a foreign buyer of Treasuries and you bought before Donald Trump was sworn in, you had $100 in treasuries. Today you have less than $90. So anybody who’s investing in Treasuries, especially since Trump says he wants to further devalue the dollar, they’re going to say, “Okay, well, if you’re going to devalue the dollar, I have to have an interest rate that’s high enough to make up for that devaluation, plus pay me some sort of interest rate.” That becomes very ticklish and can lead to this kind of downward spiral or upward spiral in terms of rates.

# Additional Economic Pressures

The economic impact of migrant worker deportations – it might sound fine to his base to say migrants are evil. The fact is, they do a lot of the jobs in the United States that Americans don’t want to do. They clean the toilets, they’re picking fruit, they’re working in restaurants. There’s a tremendous number of them. As they go away, those jobs either go undone or they become more expensive, adding to inflation.

A global slowdown is going to affect US exports. With Vietnam, the US can export tariff-free to Vietnam. Well, Vietnam only bought $13 billion worth of American products last year. It’s not like they’re going to start buying more now. That’s a total trade of almost $150 billion. So it’s a drop in the bucket. It’s not going to help the United States. As prices are higher, it’s just not something that people are going to do. You buy an American car in Vietnam – well, it’s still twice to three times more expensive than a Chinese car.

Political Ramifications and International Response

Domestic pushback over prices and foreign policy – this is in the political realm. American people thought that Donald Trump was going to control prices and that he wasn’t going to get involved in these kind of forever wars that are sapping the American focus on domestic issues. Remember, it’s “Make America Great Again,” not get involved in foreign policy issues.

But there’s the new political party, America Party, run by Elon Musk. That has exploded into a real issue. Elon Musk has a huge voice with X. He has the largest satellite system in the world. He has SpaceX, he has Tesla. We’re talking about billions of dollars, tens of billions of dollars and lots of employment. If they go to war, it’s not certain that Donald Trump, even with the US Government, can take on one individual who is always flirting with that “richest man in the world” issue.

There are conflicts with the Federal Reserve. This is undermining international feeling about the US – they don’t trust Donald Trump. They don’t understand if he has an end game or if the end game is just simply they become client states of the United States. They trust the Fed more than they trust the government. This is having a real effect on the markets.

# International Criticism and BRICS Response

Then there are the limits of “flood the zone” and crazy man tactics that Donald Trump has embraced. This idea of every day coming out with new pronouncements and creating crisis – it does well in television media, but it is not the way that you run a country. The crazy man tactics that he’s using overseas is getting pushback.

International criticisms – the BRICS are meeting in Brazil and they’ve all come together on one issue alone, really, and that is the US is acting arbitrarily. This is important. This is half the world’s population, 40% of the world’s GDP and a massive amount of the resources and manufacturing of the world.

On top of this, you have the global unrest and foreign policy incoherence. No one really knows what’s happening in terms of the US, Gaza or Ukraine. It seems to flip flop on a daily basis on whether or not he’s talking to Zelensky, Putin, or as he will be talking tomorrow with Netanyahu. What have all of these conversations yielded? Nothing. We’re still in the same boat that we were before.

# Implementation Challenges

There are also going to be legal and regulatory challenges which are going to slow things down. There’s the bureaucratic inertia – implementing something this vast and complex when you’ve just cut all the budgets of these entities is going to be very difficult.

Then we get to revenues. The IRS cuts – they cut it by half. That is not going to increase collections. The big beautiful tax cuts are even going to make that less. The Congressional Budget Office can make assumptions. The fact is the US is in dire straits. Talk to private equity analysts – they say that it could be as high as $24 trillion when you start adding up additional debt that is going to be borrowed, the regular borrowing to make the budget work and the lost tax revenues. And then you have the bill for the interest on all these T-bills that you’re issuing.

So many issues, and it’s just not clear that he has any answers to any of them.

The Lack of Strategic Coherence

PROF. GLENN DIESEN: What is strange with the platform of Trump now is he was arguing very much for making America more sustainable. But I think this is obviously where he broke, as you said, with Musk as well – the reluctance to cut debts. All of this focus on cutting the budget and now suddenly this bill – this seems to be a lack of consistency.

I think that’s what many people miss because they would like to see that there’s some kind of a strategy, grand strategy, if you will, just some end goal. Different policies – some may work, some may not – but at least some context where people can position and understand what it’s trying to do. But there’s a lot which appears to be unexplained and it’s very difficult to understand what the common thread is.

We always see this – instead of clearing it up and finding some context, we just move on to the next big thing, which sucks all the oxygen out of room, which takes all the headlines.

My concern is that this ballooning now of US debt will obviously put immense pressure on both US treasury and the US dollar. It’s just very hard to see what tools are in the toolbox when the next crisis will hit. This can’t go on for much longer before there’s something in the economy that begins to crack.

East Asia’s Response to Strategic Unpredictability

But with this pressure on treasury and the dollar, what is the US going to do? Banks begin to fail and usually tinkering with the interest rates is the main solution. Otherwise it’s also, as you mentioned, the crazy man or the madman theory of Nixon, which he appears to embrace to the fullest – this idea that the world has to be kept on its toes. I think they referred to it in his administration as “strategic unpredictability.” If no one knows what the US will do next, everyone will be a bit more cautious and not push any of its buttons.

But how is this playing out in East Asia? This geographical focus makes sense given that China is really seen now as the main adversary, being in the crosshairs of Washington. How is East Asia reacting to this? Not just China, but its neighbors as well, which the US appears to be trying to create some quarrel among them and some more dividing lines.

How is this whole thing impacting East Asia? On one hand, they do have to be a bit careful about what the US is doing next and not alienate the Americans. But on the other hand, this strategic unpredictability is just the worst in economics. In economics, the first rule is you want predictability. You want to know what’s happening tomorrow if you’re going to have safe investments and predictable growth.

The Challenge of Unpredictable Leadership

EINAR TANGEN: Yeah, absolutely. I mean, we can go back. I often refer to this, is that Donald Trump is not somebody who plans into the future. You hit the nail on the head. It’s just every day is a new day and you figure out how you can maximize that day.

And if something bad happened yesterday, like you got into a fight with your main benefactor Elon Musk, you just announce some new trade bill or that you’re going to go to war with Iran and all this kind of stuff. So there are almost unlimited white rabbits that he can release where the press will follow them around trying to figure out what they mean, which means that they’re not really paying attention to the big picture. And this is deliberate on his part.

He has a theory, right? His theory is that he wants the Fed to cut rates. And what that will do is devalue the US dollar. But you can either have a devalued US dollar or you can have a trade dollar, but you can’t have both. It’s like a birthday cake. Can’t eat it and have it.

And this is something that Donald Trump doesn’t seem to either understand or care about. He thinks that he can razzle dazzle everybody and that the dollar will slip down by 20, 30, 40%, but he can still bully countries into using the US dollar. But that happens, people are not going to be happy about losing half their equity and the rates would skyrocket and it just won’t work. So it doesn’t make any sense.

That’s where you pointed out that where’s the thread? I always tell people, don’t look for one, just look on a day by day basis. He’s going to react to whatever is happening. He pays a lot of attention to the markets, he pays a lot of attention to his base in terms of polling and he pays a lot of attention to the news. Other than that, not much else. Those are just three parts of his daily bible.

The Elon Musk Factor

And he thinks that he’s playing 24 dimensional chess. And a lot of his supporters have given him the benefit of the doubt even through this “big, beautiful bill.” They say, “Well, maybe it’ll all turn out. I don’t understand it, but maybe he’s a smart rich guy and he understands this stuff and maybe this is going to help me.”

But over the next few months especially, well, I should say the next year, you’re going to see a tremendous amount of pain by the people who voted for him, who trusted him. And some of them will say, “Oh, he’s a vessel of God and we should just follow him without thinking, he’s our cult leader.” Others will say “he’s betrayed us” and that’s the danger.

These are the people that can be easily turned, not to the Democrats necessarily, but to a new party that says, like Elon Musk, America Party, which could erode it. Now remember, everything in Congress is razor thin in terms of control of the House and the Senate. Elon Musk only needs to win two or three Senate seats and maybe 10 House of Representative seats. And guess what? He’ll control who is in charge of Congress.

He can decide to work with Republicans or he can decide to work with Democrats, or he can just say no and then nothing happens. So he has the money, he has the people who understand how to start a party, which is painful, but he can do it. He has the time and he certainly has the funds.

And it’s a state by state battle. You go in and you have to fill out the papers, you have to get signatures. But if you have a lot of money and you’re organized and you have a lot of information, then this becomes a lot easier. Third party challenges in the past weren’t really very well funded. This one is going to be self funded by Elon Musk and see if others are attracted to him.

China’s Strategic Response

In terms of China, China looks at this and they’re just scratching their head because Donald Trump is doing more to alienate the United States than China would even wish. I mean, that may sound strange because the US is targeting China. China is the adult in the room. They understand that US demand is important for China and it’s important for the entire world. And without that, there would be a global recession, perhaps even a depression. So they’re not anxious for the US to fail. No one is.

Then the question is, what do you do with a guy who doesn’t seem to have an end game? And China is obviously slow playing Washington. Trump keeps announcing that somebody’s going to call him or that “we have a deal.” Well, they don’t. They have little points that they’re doing.

China says, “Okay, we’ll release rare earths for civilian purposes, cars, automobiles and other things, but not for weapons.” US is offering, “Okay, we’ll let you have chips, but we’re not going to let you have the most advanced chips.” So these are very small moves.

The Chinese government came out and said, “Well, we expect a deal to be ready in September.” That’s a long ways off and there’s a lot of daylight in between them. And then meanwhile the rest of the world is watching us.

Global Implications and Vietnam’s Position

Now let’s go back to Vietnam. They agreed on a 2040 situation, but they’re going to be facing some pressure from China who’s made it known that any country that decides that it wants to in essence sacrifice its relationship with China, sign on to the US pressure, things will in fact be subject to some sort of action from China. Why? Because they don’t want Trump going around the world doing the same thing. “Oh, you can have 20% tariffs and 40% anything that has to do with China.” This obviously is targeting them. And they’ve made it very clear this is not going to work for them.

Remember, as much as Vietnam exports to the United States, if you start taking a look at the breakdown of the increase in imports from China, I think it will give you a very clear idea. Most of the Vietnamese products being shipped to the United States are either pass throughs or they contain components that are made in China.

So we have a situation where China is just scratching their head and they kind of slow play it enough to deal with him for three and a half years. No one is absolutely clear what happens in midterms. It appears that he will lose for all the reasons that I went into, but you don’t know. So the best thing is just to play it cool.

And you see a lot of countries doing that. Japan, America’s closest ally in the east, has signaled that they’re not going to call uncle. They’re not just going to turn over their economy again as they did with the Plaza Accords to the United States. They’ve been once bitten, they’re twice shy.

So at this point, with Japan and so many other countries, EU fighting back and the BRICS coming out unilaterally saying “you’re unfair and we’re against that and we’re sending you a clear signal,” Donald Trump is risking alienating the world. At some point, when you’re the big guy in the playground, if you can bully little people, that’s fine, maybe you can get your way, but you can’t bully everybody. And if the crowd comes together, it will be the United States that loses, that is isolated. This kind of bully behavior is not appreciated and will be remembered.

The Search for Clarity in Chaos

PROF. GLENN DIESEN: I think the reason some people are giving him the benefit of the doubt is because the grand objective of reorganizing the global economy in a way which is more favorable to the United States after the model over the past decade seems to have come to an end. I guess people are waiting for some clarity to emerge and to make some sense of all the chaos.

I see it also with the wars that he can still end the Ukraine war. We still haven’t seen the last chapter of the Middle East, so there is… But of course, a lot of this comes down to the domestic politics as well. That is, a lot of people were very disillusioned by the Biden administration and then kind of Trump came against all expectations and took back the presidency. So in the storyline here, you would like to see it actually result in something.

But if there is one clear policy in terms of foreign policy though, it’s really as well as domestic to reassert America’s dominant position. The main theme appears to be or consistent is to roll back the rise of China. And well, that’s why, of course, one can be optimistic about the rare earth deals if there’s able to reach some agreements on tech.

But for the Chinese to be able to lock in the United States into some trade agreements which the US won’t tear up within a few months, how can this be done? I’m assuming I might be wrong, but that the main strategy for China now is to insert some predictability in this partnership with the US government, which appears to thrive itself. Well, to thrive on the notion that it’s unpredictable.

So how do you, if again, Trump’s main goal is to be unpredictable, to shake things up in order to give himself more room for maneuver, how do you insert predictability into this strategy, which is deliberately unpredictable?

China’s Long-Term Strategy

EINAR TANGEN: Well, a number of ways. First off, you lead by example. And what China has done is they’ve done away with visa requirements for many countries. They reduced to zero tariffs to African countries. They’re trying to build a larger trade network outside the United States, in addition to trying to push more consumption within.

So, in essence, they and Russia have said, “Look, this isn’t going to work long term. I mean, this is a country that doesn’t like us and is going to continue to target us. We need to rip the band aid off. We need to face the pain and just use it.” Now Russia is a little bit more aggressive. China is a little bit more strategic right there.

They look at this and they say, “Okay, we have to deal with him for three and a half years, we will continue to build our trade network.” In terms of dealing with the US and Donald Trump, there’s only one way. We slow play him, keep him at the table talking about all sorts of issues, and then finally there’ll be what I predict will be a phase two.

Phase two would be an agreement that China would be buying a lot of energy and agriculture products and whatever else Donald Trump wants to sell, but at market prices. And assuming that goes through, that does create some predictability, because Donald Trump having agreed to that, if he walks away from the terms, it stops. And this would have a more disruptive effect on all these farmers who are sitting there wondering what they’re going to do with their crops, especially soybeans. So it’s very difficult.

The Crisis of Democratic Leadership

But something you said sparked something I wanted to point out. You talked about Biden and Trump and the kind of crisis in leadership, and this is not just particular to the United States. You have this in Great Britain and throughout South America, especially Argentina, but in Germany, you seem to have a set of leaders who are almost interchangeable. I mean, think about it. They kind of go wherever the wind is.

And the question is, how did it come to this? And I’ll suggest something to people and think about when you have systems where in order to be in the party to work your way up, you have to agree to whatever is being said at the time. You’re not going to get independent leaders, you’re going to get people who are going along to get along. It’s about their desire for power, not necessarily their ability to create change.

So in the US you have the Democratic Party who says “you have to be here are litmus tests, don’t fit in that, you can’t be part of this party.” And we’ve seen breaks between the middle and the left. The same thing has happened in the Republican Party. It used to be conservatives versus middle of the road Republicans.

And then Donald Trump comes along and he redefines a party moving at 180 degrees in certain areas in terms of going after working man and a lower class voters with very little less education. And now he is setting the test. You’re either with MAGA or you’re against it and you’re going to get primaried. And we saw this quite clearly as he was passing the “big beautiful bill,” he was telling people “if you don’t agree to this, I’m coming after you.” Playground bully stuff.

But does that produce leaders? I don’t think so. It produces followers. Look at his cabinet. They may look good in terms of being on TV. Vivek is, she looks like a newscaster. You have Hegseth. I mean certainly he has a lot of swagger. But do they have the experience and judgment independent to advise the president and help him craft policies that affect an entire nation and the world?

So this is one of the conundrums that democracies are facing is that this desire to have parties in control is stifling the ability of people with vision to emerge.

Regional Dynamics and Diplomatic Constraints

PROF. GLENN DIESEN: Now I speak a lot to different both former and current diplomats and politicians in Europe. And this is a common theme. I always get away from the conversation as well, which is that you always get this comment: “Well yes, it’s like this unfortunately,” but on any given issue. But you can’t really say that in public or this is not what you know, we have agreed on.

So it’s this common theme that you know what you can say and what you can’t say and it’s very concerning because even on very important issues – security, economy – I come across politicians who do tell me that: “Yeah, well this is not necessarily what one believes but this is again where the consensus is, this is where we all have our common talking points.”

So you end up having all this entire political class having to follow the group and people saying what they don’t actually, genuinely believe. And it’s not only in political parties. You see it also in larger institutions.

For example, you see in NATO, Jens Stoltenberg, who for all these years said, “Oh no, no, this is, you know, everything is black and white. Ukraine has to get everything.” And then as soon as he was finished in his position as NATO Secretary General, he gives interviews saying, “Well, probably Ukraine has to give something back. I mean, make some compromises.” You could never say these things when you’re holding a key position.

But again, this is – but I see this among, as said, diplomats and politicians as people as well. No one can actually say what they mean and what they see reality as. It’s the group loyalties which comes first. Again, if you want to play ball, you do have to sign up to not just the rules, but also the script and the narratives.

Because if there’s anything that define politics of our days, in my opinion, it’s so narrative driven. We have a storyline, everyone have to join in on this. And that narrows very much the space for what you’re allowed to say.

China’s Strategic Approach to Regional Relations

I want to pivot a little bit into how China organizes things with its neighbors though. Because if the US objective is to create divisions between China and its neighboring states, something you would do if you want to contain – I mean, I think this is ideal position. The East Asian states all quarrel among each other and the US steps in almost as the mediator, obviously taking the side against China and everything, while remaining officially this neutral mediator. I mean, this is a role that’s also playing in other parts of the world.

But how will China play this? Because you mentioned – well, if we go through some of the countries, Japan, this is not – this was supposed to be the most loyal anti-Chinese force. Is China taking advantage of this somehow to reorganize its relationship with Japan?

Because if, I mean, there’s a lot of bad history there and poor relations. But if this relation, you know, geography doesn’t change, they’re going to have to live next to each other. If they can start to change this relationship, that would – yeah, for the positive, that would be transformed the region. Do you see any movements in this area?

The American Playbook and Asian Response

EINAR TANGEN: Well, yes. I mean, people like to think of it in terms of the old ways and that is, you know, US takes advantage, they interfere, things like that. I mean, the playbook in Asia is no different than the playbook that was in the Middle East, Africa, South America, Southeast Asia many years ago. It is always divide and conquer.

It’s, you know, America is an empire. We solve our problems by taking things from others. You know, you mentioned earlier about, you know, changing the world order. Well, you know, there’s so many countries around the world who are kind of wondering why the richest, most powerful country in the world with the strongest military has to be supported when they can’t feed themselves. Why are they being beaten on? Why are they being ignored?

This is especially true in South America and Africa. Middle East, it’s worse because they see, you know, active US troublemaking – you know, what happened in Afghanistan, Iraq, Syria, Somalia, you know, Lebanon, the list goes on and on. And you know, so ASEAN is aware of this.

Japan’s Evolving Position

But I must say that I think China has a goal, you know, with countries like Japan. Japan is the one who’s initiating a lot of the newer communications. They were adamantly opposed, remember, to China coming into the CPTPP, which was the former Trans Pacific Partnership the US walked away from. But if that changed, that would be huge. That if China comes into that it helps the TPP. It also is a very strong signal that the, you know, the large, that regional groupings will continue and they will continue without the US.

So well, but that’s an area we’ll have to see. Coming up to the – this is the 80th year of the Japanese invasion. There’s a lot of feeling within China about what happened during the Japanese war trial, criminal war trials. They tried 25 class A criminals and then the day after verdict was given the rest of them, over almost a hundred were just summarily, they said “No, no, we won’t have any more trials. These criminals are free to go about their business.”

And in fact, many of the people who were class A war criminals, including the father of the previous ambassador, I mean Prime Minister, ended up working in the government holding positions of power. And this is something that is very hard for the Chinese to understand. Right. And it’s still bad blood. And you still have similar things with Korea.

The question is can they be practical and say, “Look, the US is not reliable as an economic partner. We still may want to rely on the military, but we need to have markets and we have to have a growth trajectory and we need to have better stable relations with our neighbors, including China.”

South China Sea Solutions

Now one of the big issues that China has is the South China Seas. You know, said, you know, if they were able to solve that. They sat down with ASEAN and went beyond the code of conduct. For example, let’s say they said, “Okay, any disputed area” – and there are multiple. They always talk about the Spratly Islands and, you know, all these things. But the fact is it’s not just China and the Philippines that are odds here. There are two other countries at odds, including Taiwan. So there are multiple claims.

And these claims were created by who? The United States. Its desire to have a larger territorial ocean territory created problems for the rest of the world and they knew that when they passed it, people didn’t understand it. The US was very much more powerful back then and they basically pushed it through. Either agree or you’re out or bully tactics.

But if China were to sit down with these countries and say, “Listen, let’s just put any disputed area into some sort of trust that’s mutually governed by us and that we agree to develop whatever there.” Because the reason they’re talking about this is development. These little islands are, you know, they’re not really habitable or anything like that. It’s about the resources that people think are in the sea.

China has the machinery and the capital to develop them that would be very useful to these countries. So if they were to agree on a shared prosperity and a common future, at least regionally, it would completely change this.

Building Alternative Structures

So I do think that China has to pay attention to not only what the US is doing to weaken itself, but what it can do to make regional partnerships stronger, increase the trade. Because if they’re thinking of future that does not include the US in the prominent role it was before, they have to come up with a new one.

So if they’re able to solve that, what happens? All of a sudden, ASEAN in China, everybody says, “Well, freedom of navigation, patrols for what? We don’t want you here. We don’t want Canterbury sending ships up here, or the Brits or Americans or even the Indians. You have no role, there’s no problem here. Why are you sending ships through?”

So it severely affects the perception of people about Taiwan and says, “Well, China seems to be getting along with people. We seem to be the ones who are trying to create a problem. We have no business doing this stuff.”

So I do think that yes, you can wait around and you can slope like the United States and watch it disintegrate, its soft power and credibility and predictability. But on top of that, I think it’s important to start building a new structure. You know, BRICS, BRICS bank and the BRICS Fund. These are all, you know, projects.

I mean, I think first time 60% of the world trade wasn’t done in dollars. That is something, and it’s something that people aren’t talking about but is something they should be considering very, very carefully. China has over 140 primary trade relations. Why would you use a dollar that’s depreciating, that’s just not reliable to do trade between countries.

There are other alternatives and it’s not that the dollar will disappear, it’ll still be used to a certain extent. But the US is killing itself. China doesn’t have to help, but it does have to present an alternative. And that’s really where I think they need to get their ducks in a row and start talking about it.

It’s not about taking advantage of the United States. It’s simply responding to, you know, the United States inability to articulate plans and to bring peace. That, that I think is probably the most important thing that China could do.

Changing Alliance Dynamics

PROF. GLENN DIESEN: Yeah, well, yeah, that’s what I was sending towards because in this alliance systems the US set up to contain China once, not – yeah. Now that these systems are no longer benefiting, it’s well, call them partners or proxies or vassals or whatever you will. It’s junior partners. There’s an opportunity, but of course there has to be replaced with something and not just one side pressuring them versus China pressuring them, but rather be able to present some – yes, some different formats, some – yes, you said alternative, a mutual prosperity.

Just my last question was – well, again, one can look at many countries in the region, Philippines as well. But the two countries which seems to stand out in terms of the changing relationships with India or challenge is India and Vietnam. Do you see more antagonism or do you see possibilities for improving, for China improving ties with these countries?

The Complex Dynamics of Global South Nations

EINAR TANGEN: Well, you know, I hope that they will. As I said with Vietnam, China is going to take a dim view of them agreeing to in essence treat Chinese goods as part of the US agenda. That will not pass easily. And there will be some sort of reaction to that.

In terms of India, India is interesting and I want you to think about something. During this last war with Pakistan, what did you have? Pakistan was being supplied by China and by Turkey. But if you look at everybody who’s supplying them, they’re all in the global south.

Then you look at India, India is being supplied by Israel, France, United States, Russia used to be 72%. Now they’re literally half that amount and continuing to be pushed out of the equation.

So you have India which is a situation that it suffered greatly under colonialism. They started at 24% of the world’s GDP before the British arrived. After the British left, they were at 4%. I think that’s pretty clear that they were raped and pillaged. Yet today they rely on the same colonial powers that basically ripped them off.

India’s Approach to BRICS and International Relations

And is that going to continue even at BRICS? Right. India has a different approach. They don’t want to talk about mutual things so much. They want to trade. Say, “Well, you support me against Pakistan and I will support you on some sort of trade thing.” And this doesn’t really play well because that’s not the kind of organization it is.

That happens, of course, in the United Nations. But in this group of things, it’s purely about trade. And India continues to try to bring in political issues. And they see it as smart. They see it as pushing forward their national interests.

Now will that change? I don’t mean at some point. I’ve seen personally, I was on a show with the leading host for India. It’s kind of a more of a tabloid type of thing. Lots of shouting and screaming and things like that. But the two shows were basically devoted to criticizing the United States for its regime change efforts in Iran.

And it’s not that Iran, I mean, India used to support Iran, right? Then they had an abrupt shift. So it’s not that they’re friends with Iran, but there was this real, very strident tone that the US is not entitled to do this.

US Influence and Modi’s Concerns

And I think part of it is because what happened in Bangladesh, the US fingerprints were all over that. And that this is a message to India that “don’t be an uppity minority. White men are here and we’re in charge. And you just take what we give you. Don’t get any ideas about that.”

And there’s also this feeling by the Modi government that the US allowed interference in his general election, which he believes cost him the majority and the mandate that he wanted to in essence, unify India more like China. A strong central government with not as strong provincial governments he thinks is necessary to change India. He’s probably right.

So there are many currents that are running back and forth. It can seem like the river is going in one direction, but we all know beneath the surface that are many currents going in different directions. Backwards, sideways, et cetera. So this is the reality that is here today.

India’s Strategic Balancing Act

The question is, how does India see itself if it continues to be pushed by the US? It will turn more towards China, but it will never abandon the US completely and it’ll never completely abandon China. They want, in their opinion, the smart thing is to do is have a foot in each camp and take whatever you can get.

And you can see this. You know, one of the reasons I believe that Xi Jinping wasn’t that enamored of going to the BRICS was because there’s a five country tour by Modi and then with a state dinner and Brazil hosted by Lula. Lula thought he could charm everybody into taking perhaps a less, a more pragmatic in his opinion view towards the United States.

Brazil has a lot of connection, investment, things like this. It cannot walk away from the U.S. even though it’s not particularly enamored with U.S. policy. So it becomes very, very complex.

The Fundamental Divide Within BRICS

So you have Russia and China on one side saying, “Look, we have to do what is necessary to protect ourselves and build a world order, not to suppress the United States, but because the US is not reliable.”

Then you have India and Brazil to a certain extent, saying, “Look, forget that, don’t take any positions. Let’s just figure out what we can get out of this individually as nations.” Which of course means that you really don’t want to be in the group. You just want to use the group for your own purposes.

So until attitudes change, until the US realizes that it is part of the world, not the ruler of the world, until it reflects on its actions and say, “Here’s things that didn’t work, going into countries thinking we’re going to create regime change didn’t work. It didn’t work in Afghanistan and so many other places. We need to think of new strategies, perhaps engaging.” That’s one component.

Second part is other nations like India deciding that their best interests are actually in cooperating with groups as opposed to using them for political and economic purposes. I hope that answered the question.

The Curse of Hegemony

PROF. GLENN DIESEN: No, it does. And well, I think they say that a curse of hegemon, of a hegemony is not just a failure to prioritize and have strategic focus, given that you try to do everything. But a curse of hegemony is also the ability to absorb a lot of cost. So you can do a lot of stupid things without necessarily suffering the consequences.

And well, from my perspective, this perfectly summarizes the past 30 years. A lot of failure to have proper strategic thinking where to do what. But also, yeah, this, accruing all this cost, willingness to do really stupid things.

And I think it’s coming to an end. And now that hegemon is over, you do see all of this cost will the consequences are building up. And yeah, I don’t think it’s been a proper adjustments. And that’s not just on the Americans. I see this in Europe as well. The willingness to just double down on every failed policy hoping that, well, it will get better whether it’s a war issue or a security issue.

But yeah, I think reality will catch up with us very soon, but always does. It’s interesting to look at East Asia because I do think this region is going to go through some big changes in terms of the US alliance structure not necessarily being able to be kept in place.

And the irony is, of course, while the Americans want to leave Europe, it’s not that big of a problem if they throw their weight around and have some consequences. But given that Asia is its main strategic focus, it’s very difficult to see the strategy or order behind some of these things which are being done. A lot of it appears to be self harm, but here we are.

Anyways, thanks again for your time and yeah, look forward to speaking.

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