The political reshaping of the world is taking shape day by day. The bilateral negotiations initiated by Donald Trump, the Shanghai meeting with Xi Jing Ping, and the alliance, over a dinner, between American tech and the White House are all signs of a renewed global political balance.
Two dimensions to this recomposition.
1️⃣ One concerns relations between States, undermines multilateralism and defines a new hierarchy
2️⃣ The other is technological, reflecting the strong links between American Tech and the White House, but also its influence and concentration.
A New Hierarchy
Globalization conditioned the decisions of each country on its adequacy to the global framework. To be effective, choices had to be consistent with a rather cooperative and coordinated environment.
Since the pandemic, these choices have become increasingly driven by internal objectives. Industrial policies reflect this change of direction.
The Inflation Reduction Act and then the tariff policy in the United States reflect this desire to capture production on American territory.
China’s involution policy also signals a local phenomenon. This policy aims to rebalance an increasingly powerful but less and less effective system.
Europe is more neutral. The Draghi moment associated with the publication of the former ECB president’s report did not cause such a significant rupture. Its author, a year later, is somewhat disappointed with the results.
What consequences ？
The framework redefines the hierarchy between states.
The United States is very active, as the goal there is to increase local production at all costs. This has translated into two things since Trump’s return to the White House.
1️⃣ Bilateral negotiations after the announcement of tariff measures. The US has stepped out of the multilateral framework, indicating that the rules, as seen from Washington, should not be the same for everyone. The ultimate goal is to produce in the US. The recent 100% taxes on pharmaceutical products are a step in this direction. The specific application to this sector is a way to prioritize between those who will produce the drugs and those who will not. In an aging world, this is strategic.
2️⃣ The negotiating countries must also pay their dues. Japan must invest $550 billion, leaving the investment choice and 90% of the revenue to the White House and the Americans. Europe must pay its $600 billion contribution, and more recently South Korea $350 billion.
Servitude is expensive and explicitly defines a new hierarchy between the USA and its obligors.
By accepting these conditions and those relating to military spending, Western countries are becoming vassals and are making their future choices more dependent on American choices.
To be continued…