Trump’s bid to remake the world order

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0:25Donald Trump got pretty bored of peace early this week. Ahead of his trip to the World Economic Forum in Davos, the president raised the collective blood pressure of Western Europe by insisting on taking over Greenland. How far are you willing to go to acquire Greenland? You'll find out. President Trump! Now, Trump walked some of that back a few days later, but all that sword rattling may have tipped the scales in a larger battle over the future of the Western world. There is a strong tendency for countries to go along to get along, to accommodate, to avoid trouble, to hope that compliance will buy safety.

1:07Well, it won't.

1:14This is Swamp Notes, the weekly podcast from the Financial Times, where we talk about what's happening in U.S. politics, finance, and the economy. I'm Mark Filippino. This week, we're asking, what will become of the world order? Here with me to discuss is Ben Steele. He's the Director of International Economics at the Council on Foreign Relations. Ben, welcome. Thank you. Good to be with you. And we've also got Abigail House-Loner, the FT's U.S. foreign affairs correspondent. Welcome back, Abby. Thanks for having me. Abby, European leaders condemned Trump's threat to take Greenland. He threatened tariffs.

1:44He even alluded to military force. That push was timed ahead of the World Economic Forum. And so we heard from all these world leaders who are reacting to the shocking moment. What was their reaction? Alarm and indignation. Yeah. I mean, you heard, we just heard what Canadian Prime Minister Mark Carney had to say. You know, he never mentioned Trump by name in that speech, but he essentially said the middle countries, you know, need to work together and that trying to appease Trump is no longer going to work out for them. That was huge. Yeah. And, you know, we all knew who he was talking about in his speech and it was received with thunderous applause.

2:25Right. Mark Carney was not out on his own with how he was feeling about Trump in the United States at Davos. That's right. I mean, there was a huge amount of tension about this. Even Trump acknowledged the day he left that people weren't exactly excited to welcome him to Davos because of Greenland, because of these threats. And it wasn't just people, it was markets, too. If you watched global markets, they went down as he started to escalate his threats on Greenland and then only started to bounce back after Trump walked back those threats. Ben, you watched this all play out. This is right in your wheelhouse.

3:01What was your reaction? Well, stepping back from the geopolitics of this, we know that Donald Trump always needs to make himself the center of attention. So if it wasn't Greenland, it was going to be something else. He was going to ensure that all eyes and all ears were focused on him. We also know that Donald Trump likes to have a winning message once he arrives at a forum like this. And by claiming victory after his discussion with NATO Secretary General Mark Ruta, he was able to present himself once again as the great dealmaker who's stabilized things. But of course, he really doesn't care about what people think of the direction in which the world order is going.

3:55He's perfectly happy for them to have a debate about whether there is such a thing anymore. I'm sure we're going to get into the issue of his new Board of Peace, for example. But he is slowly but surely trying to replace the world order with something else, something that will be driven by the person of Donald J. Trump. I'd like to play a little bit of a clip of his speech at Davos on Wednesday. We probably won't get anything unless I decide to use excessive strength and force where we would be, frankly, unstoppable. But I won't do that. Total 180 from what he had been saying up until that point.

4:40Do you guys think that Trump effectively blinked on Wednesday after the speech? And maybe why did he do that? Well, you know, I've heard the phrase taco before. Oh, yeah. Trump always chickens out. That's oddly familiar. Yeah. But, you know, no, the markets took their largest losses since October. And it seemed like that resonated. You know, whether he ever actually intended to invade Greenland, I think, is another question. But he clearly realized it wasn't having the effect that he had hoped for. Yeah. And, you know, we should point out, Ben, you listed all the things that Donald Trump is known for.

5:18He's also known as a negotiator who starts the bidding high. And then ends somewhere in the middle. And I think maybe somewhere in the middle is this deal that he says that he struck with Greenland over access to the minerals there. Ben, this pivot, do you think that he was able to repair that damage that Abbey was talking about? Oh, absolutely not. No. No. I can't say he's miscalculated in that regard because I don't really think he cares about the damage. But, I mean, Mark Carney's speech, to my mind, said it all. Mark Carney wasn't holding anything back. He basically said that, look, the rules-based liberal order that we've all lived under since the early post-war period has, in many senses, been a fiction.

6:08The system's power comes not from its truth, but from everyone's willingness to perform as if it were true. And its fragility comes from the same source. We knew it didn't drive itself on the basis of rules and norms and procedures. we understood that there was always a driver, a godlike uncaused cause that stands outside the system, setting the agenda, making sure that the processes moved in a direction favorable to the United States of America. But Carney said, you know, we were willing to buy into that fiction. We were willing to pretend that we weren't aware that we were living in a fictional world.

6:56because the United States kept its part of the bargain. It kept the sea lanes free. To a significant degree, it provided financial stability, sometimes stabilizing chaotic situation that the United States itself would create. But for the most part, the United States was always willing and able to step in when necessary. What Carney is saying now is we can't continue to play on in this fictional world because the United States is not keeping its part in the bargain. It's being a world bully. It is pursuing nakedly self-interested objectives. It no longer cares about world order. So we, the middle powers who are capable of achieving something, if we combine in our strength, really need to start fabricating something different in our own interest in self-preservation.

7:57Let's hear a little bit more from Carney. I want to play a bit more of his speech, which is arguably maybe the highlight of Davos. We believe that from the fracture, we can build something bigger, better, stronger, more just. This is the task of the middle powers, the countries that have the most to lose from a world of fortresses and a most to gain from genuine cooperation. I don't know about you guys, but this sounds like a breakup. It's not me, it's you. Tell me a little bit about how big this moment was, Abby. Well, I've been watching sort of with fascination this whole year to see at what point, as Trump tries to remake the world order, America's top allies put their foot down and say, no, we're not playing this game anymore.

8:45Carney has clearly done that. Now the question is, if the others follow suit and they really do follow through with coming to the same conclusion that Carney has come to, this game is not worth playing. They're not going to do this and they're going to strike out and do something completely different. And I think we're going to segue into the Board of Peace in a moment. I think, you know, seeing who agrees to participate in that is going to be one, I think, big test of whether countries are still going along or are going to try something else. Even if there is a Democrat in office following Trump, do you think that American allies will trust the U.S.

9:28enough to start, you know, repairing relationships? Or are they worried too much about whiplash if a Trump-like figure follows that Democrat in office? Well, I think the nature of U.S. politics and executive power in the U.S. have demonstrated that you can no longer certainly rely on a continuum of U.S. policy. From the way that Trump has completely dominated and gotten effectively the green light from Congress to, you know, redefine U.S. presidential authority and U.S. policy both at home and abroad means that if you are another country, whether a partner or an adversary, no, you cannot count on a predictable attitude or outreach from the United States.

10:19And you're going to have to calculate accordingly if you're wise to that. I agree with Abby. Recent history clearly points in the direction of a permanent rupture. What I mean by that is this. After the first Trump administration, a new democratic administration came in that was absolutely dedicated, above all else in foreign policy, to repairing the damage to relationship with allies. It put enormous stock in that. And you remember after the Ukraine invasion, we were all saying that NATO is back. It has regained animating feature that it was defending liberal democracy in Europe once again. So I think Europe during the Biden administration was willing to give the United States a second chance.

11:13Now that the United States has brought Donald Trump back, I think it's eminently clear to our allies that the United States can't be trusted. Sure, there'll be a pushback against the direction in which Trump is pushing policy right now, but I don't think it is possible to bring back the trust that held together the liberal order, precisely that trust that Mark Carney describing in his speech at Davos that is now gone. Without the trust in the benign hegemon, that order simply can't continue. Thank you.

12:29Okay, we've all been patient enough. Let's talk about the Board of Peace. On Thursday, the president's other big public event at Davos was a signing event of the Board of Peace, initially created to oversee a ceasefire in Gaza. Just two European countries agreed to sign on. Abby, can you explain why this board became so controversial? Well, this comes in the context, remember, of Trump hates the United Nations. There has been this building, you know, animosity for years in the Republican Party, and especially from the Trump administration towards the U.N. and these sort of traditional international post-World War II bodies that have, with mixed success and certainly not a lot of success in recent years, sought to mediate world conflicts and address massive international problems.

13:20Now, the Trump administration has pitched this Board of Peace without really formally saying so as an alternative to the UN. You know, as this idea they've said, this is going to oversee this peace process and the reconstruction of Gaza. And then we might also try to handle other conflicts, maybe Ukraine. And Trump is largely in control of what this board does. And he's already appointed, you know, a Gaza executive board beneath that to oversee his vision for Gaza. And so signing on to this, you know, as a foreign leader is effectively saying we agree to let Trump be in charge of Gaza's future and how we want to resolve other conflicts as well.

14:08Ben, how do you square these two versions of Trump? The one that is running the Board of Peace, who's lusting after the Nobel Peace Prize, and the one who goes and extracts Nicolas Maduro from Venezuela, and then up until Wednesday was okay taking Greenland by military force? I think in his mind, there's no contradiction here at all. Really? No, we can't overstate how radical this proposal is. This is not like the United States in 1945 establishing the UN and a security council with five permanent members, one of which would be the United States, which would have veto power. But clearly, the United States was embedded in a larger organization that would have its own interests and its own concerns.

14:58This Board of Peace is entirely personalized in the character of Donald J. Trump. What's so remarkable about this Board of Peace is that his powers that he's created for himself are enormous. He can set the agenda. He can veto anything. His chairmanship continues on. This is quite important beyond his presidency. So I think he's beginning to acknowledge that perhaps he can't run for a third term, but he will continue to be a major force in world affairs in his mind by running this board of peace with a new president in place in the United States. And in a sense, he will be a competing personality with billions of dollars under his control that he is going to claim he has the international legal authority to spend both to quote-unquote enforce peace and I wouldn't be surprised at all to create war if he's not happy with the situation.

16:12This is truly head-shaking, groundbreaking, earth-shattering stuff here. Last question for you guys. Abby, let's start with you. What do you think the future of the international order looks like now? Has it changed in some irreversible ways after this week? Gosh, I wish I had a crystal ball on that one. Sorry, big question to end things on. I mean, I think it has. But, you know, there's three years left in this administration. We don't know what the next administration looks like, you know, but I think that what Carney's speech indicated was that America's allies are starting to realize how significant of a pivot Washington is seeking to make.

17:08You know, the long held alliances and certain rules, whether written or unwritten, none of these things are still taken seriously or respected by this administration in the way that previous U.S. administrations did. And so Trump wants a board of peace. Trump wants a severely diminished UN. Trump wants to be able to call the shots at home and abroad. The question is, what are other countries in the world going to do in terms of alliances and pushback to achieve or to maintain the kind of order that they want to see? You know, I think irrespective of what the rest of the world wants, I think we know exactly where we're going.

17:56We're going back to a 19th century order, which was based on spatial dominance rather than on universal rules. So spheres of influence, basically. Absolutely. So we're going to see this American sphere dominated by the United States. We're going to see an Asia-Pacific dominated by China and a very dangerous situation in Europe where Russia, for the foreseeable future, will be contesting the eastern borders of Europe, an extremely dangerous situation. But the picture I'm painting for you is very recognizable. from modern history. It is a 19th century spatial ordering of the world, a very dangerous one in my view, but I think we're inexorably moving in that direction, irrespective of what any of the major parties actually want.

18:54I have so many more questions, but I think we have to wrap up here. I want to thank our guests. Ben Steele is the director of international economics at the Council on Foreign Relations. He's got an article coming out the dispatch that talks about a lot of the stuff we've been discussing today. We'll link to that in the show notes. Thanks, Ben. Thanks for having me. And Abigail Houseloaner, the FT's U.S. foreign affairs correspondent. Thank you so much, Abby. Thanks for having me. Before we go, do me a favor. Leave us a rating or review on whatever app you listen to the show. Tell me what we're getting right, what we can work on, and the kinds of conversations you want to hear next.

19:26It'll help other people find our show.

19:36This was Swamp Notes, the U.S. politics show from the FT. If you want to sign up for the Swamp Notes newsletter, we've got a link to that in the show notes. Our show was produced by Henry Larson. It was mixed by Sam Giovinco. We had helped this week from Lauren Fidor. Special thanks, as always, to Pierre Nicholson. I'm your host, Mark Filippino. Our executive producer is Tofer Forges. Our global head of audio is Cheryl Brumley. Original music by Hannes Brown. Check back next week for more U.S. political analysis from the Financial Times. Thank you.

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