Azeem Azhar's Exponential View
Sir Niall Ferguson decodes Trump, China, and the new world order
23 Apr 2025
Chapter 1: What is the new Trump doctrine and how is it characterized?
How would you characterize this new Trump doctrine? If you just follow the more bombastic things that the administration does, laying claim to Canada, Greenland, the Panama Canal, you think it's American empire. But inside the Oval Office,
Their real preoccupation is with the weakness of the American position. We've heard it again and again from members of the administration that there's going to be pain.
To go full tariff man, to close the southern border, those things will have meaningful costs for American households. And so by the end of the year, even more people than currently will be saying, what do we vote for?
How does that reduce the room for manoeuvre to execute on the strategy, right? Does it constrain them at all? It can course correct.
He likes to open really strongly. That's all in the art of the deal. See what the other side does. And if it doesn't really go anywhere, he's perfectly capable of declaring victory or claiming a win and retreating. How do you read China at this moment?
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Chapter 2: How does the U.S. approach tariffs and their impact on the economy?
Anybody who bets against Chinese STEM is likely to lose their bet over a 10-year time horizon. The problem is that you're also making a bet on the CCP's ability to manage Chinese economic policy and national security.
I think that the harsh reality is that despite the mood music coming out of Beijing, they still have a problem that is deflationary, that the property sector is very hard for them to fix, and they may say they're going to have a 5% growth target. I just don't think they're going to do it.
The degree to which the Chinese have been misbehaving around Taiwan has increased dramatically. I mean, it could be a real issue.
President Trump could at some point be faced with the dilemma. Do you accept a quiet Chinese takeover of Taiwan or do you risk World War III?
Chapter 3: What insights does Niall Ferguson provide about China's current state?
Now, the discussion today is the $120 trillion question, US, China, and the New World Order. And I'm really happy to be speaking to the renowned historian and author, Sir Neil Ferguson. He is the Milbank Family Senior Fellow at the Hoover Institution and one of the world's foremost geopolitical analysts. Neil, it's great to have you here. Very good to be with you.
Let's start with perhaps the most fundamental question.
Chapter 4: How is China performing in technology and innovation?
How would you characterize this new Trump doctrine? Is it a coherent strategy or is it more a guiding direction which is going to be delivered by a series of reactive measures?
Well, I quite deliberately teed myself up with an allusion back to the Nixon administration because I do think that there is something going on there. which is being missed by most analysts.
Chapter 5: What are the implications of U.S.-China relations for Taiwan?
If you just follow the more bombastic things that the administration does, laying claim to Canada, laying claim to Greenland, laying claim to the Panama Canal, you think to yourself, it's American empire. This is as shocking as it's been since William McKinley was president. And the administration wants you to think that.
And that's part of the reason for trolling everybody on issues like Canada and Greenland and the Panama Canal. But inside the Oval Office, and I think we begin to see this, their real preoccupation is with the weakness of the American position.
And there's a belief, I don't think it's right across the administration, but it's certainly in the president's inner circle that they have to reduce commitments in Europe. Stop sending money and weapons to Ukraine, reduce commitments in the Middle East, reduce your presence in Syria and Iraq in order to focus on China, because China's the other superpower and China's a formidable antagonist.
So that does remind me of Nixon. And part of what we see here is what Nixon did in 71, which is shock the allies.
Chapter 6: What predictions does Niall Ferguson make about the future world order?
You've got to shock the Europeans, and you also shock your Asian allies by saying things like, we're going to put tariffs on you, and we might do something with the dollar. And you guys have to pay for your own defense. That was all out of Nixon's playbook. And I do think Trump has a debt to Nixon that doesn't get nearly enough recognition.
They had a relationship back in the 80s, and it was Nixon who encouraged Trump to think of politics.
So this is not just something I'm making up. You have an advantage on me in having obviously written books on this subject, and you spent the whole day reading old telephone transcripts from Henry Kissinger after he had first gone to China in the 70s. So, you know, advantage, Neil, at this point.
There's another part, though, of the vernacular that comes out, and I agree we should look below the bluster.
Chapter 7: What does the future hold for the U.S. economy amidst these changes?
which is the sense of that America and American lives in the middle and the working classes have been deeply hollowed out by what most of us call the Washington consensus. Is that part of the driving force or is this really more of a question of the strategic competition with China?
Well, I don't think there's any doubt that the president has thought since the 1980s that you need to do a couple of things first. to reduce the impact of foreign competition on American livelihoods, and particularly middle class and working class livelihoods. One of them is to put up tariffs. He's been out of consensus on this issue for close to half a century. And the other is
that you force everybody else to take care of their own security and you stopped subsidizing it by providing umbrellas to other powers. So I think that's right.
And I think when we're trying to understand what comes up next week, when a whole bunch of new tariffs are going to be imposed on American trading partners, you have to understand that Trump believes that tariffs aren't just a source of revenue, that he doesn't think that. They will help to re-industrialize America. and to reduce the trade deficit, which he regards as a sign of weakness.
And Trump has this very unorthodox economic theory. An enormous trade deficit will somehow subsidize the rest of the world. And if you're paying a significantly bigger share of the NATO budget than, say, the Germans, then you're subsidizing them too. And actually, on the second point, he's right. So that's part of it. But Azim, I think the really important idea that's at work here
is the reverse Nixon theory that people close to the president occasionally talk about. And that's the idea that by being very nice to President Putin over Ukraine, you are going to peel him away from Xi Jinping and try and drive a wedge between the Russians and the Chinese. And the reason people say reverse Nixon is that they're thinking of that moment in 71, 72,
where Nixon and Kissinger got into touch with Zhou Enlai and Mao Zedong. Nixon went to China in 1972. That was the big moment when suddenly the Soviets woke up and realized that the US was closer to China than they were. And I think the idea here, it helps explain why they appear to be so
inexplicably nice to Putin, why they seem to be ready to throw Volodymyr Zelensky and Ukraine under the bus, is they're trying to get into a closer relationship with Russia and peel Putin away from Xi Jinping. That's the most Nixonian thing about this administration strategy. And I want to just, you know, spoiler alert, I don't think it's going to work.
Yeah, I don't think that would work as well, partly because Russia is quite a weak player in some sense. It's weak economically. It's, in a way, whatever's happening on the ground in Ukraine, it's rather on the back foot. I mean, it has to go back and rebuild itself and think again about how it should leverage power and exert that power. And it's quite a long journey.
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