Last week was the worst for geopolitical risk in 20 years

Last week was the worst for geopolitical risk in 20 years
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When the 9/11 terror attacks happened in 2001, the U.S. was still the world’s unquestioned superpower; Russia was still struggling to find its own political footing under relative newcomer Vladimir Putin; and China was a developing economy instead of an existential threat to the Western world order.

But while the headlines from last week all pale in comparison to 9/11, I’d argue that we just lived through the most seismic week of geopolitics since I founded Eurasia Group in 1998.


We begin with the personnel changes. That Donald TrumpDonald TrumpTrump DOJ demanded metadata on 73 phone numbers and 36 email addresses, Apple says Putin says he's optimistic about working with Biden ahead of planned meeting Biden meets Queen Elizabeth for first time as president MORE got rid of beleaguered Secretary of State Rex TillersonRex Wayne TillersonHouse passes legislation to elevate cybersecurity at the State Department Biden's is not a leaky ship of state — not yet With salami-slicing and swarming tactics, China's aggression continues MORE a couple weeks ago hardly qualified as news. National Economic Council Director Gary CohnGary David CohnOn The Money: Wall Street zeros in on Georgia runoffs | Seven states sue regulator over 'true lender' rule on interest rates | 2021 deficit on track to reach .3 trillion Former Trump economic aide Gary Cohn joins IBM The Hill's Morning Report - Presented by the UAE Embassy in Washington, DC - Trump OKs transition; Biden taps Treasury, State experience MORE had one foot out the door since Charlottesville. National Security Adviser H.R. McMaster wasn’t long for the Trump world anyways, according to a flood of news reports.


Still, the departure of all three rattled Washington in their own ways; their replacements will rattle Washington further. In lieu of Tillerson, the State Department gets Tea Party darling and CIA Director Mike PompeoMike Pompeo Sunday shows preview: Infrastructure expected to dominate as talks continue to drag The triumph and tragedy of 1989: Why Tiananmen still matters Pence slams Biden agenda in New Hampshire speech MORE.

Talking head Larry Kudlow takes Cohn’s vacated seat, elevated alongside noted trade hawk and China-antagonist Peter Navarro as a direct economic advisor to the president. John Bolton assumes the reins as the national security advisor.

All these personnel moves are shaping up to have a singular effect — bringing the U.S. closer to open-confrontation with China. 

The headlines last week centered on Trump’s tariff announcement aimed at China (expected to target at least $50 billion worth of imports), but just as important from the geopolitical standpoint were the Taiwan developments a few days earlier.

On March 16, Trump signed the Taiwan Travel Act to allow high-level Taiwanese officials to travel to the U.S. and meet with their U.S. counterparts, a much-needed diplomatic win for Taipei. For most Americans, Taiwan is a non-issue; for China, Taiwan is as close as a “red line” as Beijing gets.

Taking all three together — tariffs, Taiwan, and personnel — senior Chinese officials are beginning to regard Trump’s recent moves as a coordinated shift against Beijing — and they’re right. The world’s most important bilateral relationship hit its inflection point last week; it’s all downhill from here. 

In spite of Trump’s decision to congratulate Putin on his electoral victory over the explicit warnings of his national security advisers last week, the U.S.-Russia relationship is similarly pointing south. The Trump administration revealed last week that Russian hackers had successfully infiltrated the U.S. power grid (among other targets), on the same day it instituted sanctions against 19 Russians and five entities for U.S. election meddling.

However warm Trump and Putin’s personal relationship may be, Washington and Moscow are moving to a more confrontational stage, as evinced by this week’s decision to expel 60 Russians from the U.S. (as well as shuttering the Russian consulate in Seattle) in conjunction with 16 EU countries, a response to the poisoning of an ex-Russian spy living in the U.K. earlier this month. 

Truth be told, Tillerson, McMaster and Cohn were never particularly effective at keeping Trump from acting on his instincts — whether they be anti-China, pro-Russia or anything in between — but they provided voices of dissent in a White House not known for tolerating many of those. These three were also advocates of free trade, multilateral organizations and the U.S. focusing on strengthening alliances.  

Now Trump has surrounded himself with folks who are more philosophically aligned to the “America First” view of the world, and they know how to execute on it. Mike Pompeo has the support of many Republicans in Congress and has proven himself one of the Trump administration’s most effective political operators.

John Bolton gives Trump his most vocal supporter for a hawkish foreign policy agenda. Navarro has put it even more bluntly: "my function... is to try to provide the underlying analytics that confirm [Trump's] intuition. And his intuition is always right in these matters.”

In a post-Pax Americana, G-Zero world — one where no one country has the wherewithal or will to lead the world’s response to global problems — this risk-acceptant approach to foreign policy (from everything ranging from Korea to Iran to Mexico), opens up Washington both to more miscalculation and escalation. 

The Mueller investigation continues to bear down on Trump and has begun crossing the “red lines” Trump warned him not to cross by subpoenaing Trump Organization records.

The resignation of lead lawyer John Dowd last week — in part over Trump’s desire to sit down with Mueller’s investigators, which Dowd opposed — makes for a more volatile Trump, one who is even quicker to deflect blame onto others, but also one who paradoxically feels more at ease making big decisions with less say from others.

As the domestic political pressure against Trump mounts, the urge to take divisive but aggressive actions will grow stronger. Trump doesn’t play defense, he plays offense. Now that he has a more enabling staff in place, those snap, instinctive outbursts will increase in frequency.

Trump has never shown the ideological consistency needed to pull off the most drastic reimagining of U.S. foreign policy since World War II; but he has found a team sufficiently aligned with him to make his “America First” rhetoric enough of a reality to cause him the geopolitical crises he’s so far managed to avoid. 

As I said, it was a big week for political risk.

Ian Bremmer is the president of Eurasia Group and author of the forthcoming book, "Us vs. Them: The Failure of Globalism."